Wayne Huizenga — Great Yield, No Grace

My take on Wayne Huizenga’s effect on sports in Miami is: great personal yield, no public grace.

That is an obvious imitation of the famous line penned by a fellow Cuban, former MLB player and then scout, Mike Gonzalez. Gonzalez–partially due to a lack of English skills–once wired in a four-word scouting report now revered for its brevity: “Good field, no hit.”

South Florida Sun-Sentinel sports columnist David Hyde does a great job of presenting the money side of sports ownership when he provides a bottom-line financial analysis of Wayne Huizenga’s ownership of the Miami Dolphins–a $735 million profit.

Hyde avoids the typical columnist outrage over the fact that someone profited as much as Huizenga did, while benefiting in part from public monies [State tax refund and transit infrastructure around the stadium]. He also avoids the other side of the morality-based analysis, by trying to tell us what a great person the owner–who was already incredibly wealthy before his very profitable investment in the team–was. We really have no idea what kind of a person people in sports are by their public reputation; So why pretend?

We can’t even tell what kind of person they are by their charitable contributions. To the mega-wealthy, charitable contributions are a necessary line item on a financial statement in terms of their public persona. But by virtue of their hard work and good fortune, it is difficult to give enough to hurt themselves financially. So Huizenga’s millions are really no match for the little old lady who unfurls a dollar bill at Mass on life’s real scoreboard. Don’t think people like Huizenga don’t realize that late at night. OK, maybe very very late at night.

Here is the type of thing we can rationally deduce. As a stadium owner, he benefited to the tune of approximately $4 million annually by having the Marlins as a tenant. Once he sold the Marlins, his incentives no longer included having the Marlins find a new home. That would explain why a typical businessman would seek to block the Florida Marlins plans to secure a mostly publicly–but not from local taxes–funded new stadium. But we’ve established he’s not typical. He earned a dominant position in our local sports market and he chose to use that power to block the new stadium. His right of course. As is our prerogative to judge the man in the court of stadiums public opinion.

That’s the part which regular fans like me can’t quite put our finger on the motivations. It evokes the ‘how much is enough’ poor-man’s query–the Mammon-ites know the answer is always, ‘a little more.’ The Miami Dolphins did not explode in value over the past few years. Owning an NFL franchise has been a great investment for many years now. As such, Huizenga could have been reasonably secure in knowing that a large payday for selling the team was his for the asking, especially since the time of Marino’s retirement [1999]. Let’s even grant him that Ross was a great catch as a buyer. Instead of an approximate net profit of $700 million, let’s say $400 million was a more reasonable estimate.

As someone who profited as much as Huizenga has from Miami’s sports fans, his efforts to block the MLB team from securing a new stadium are as reflective of his character than any legacy spending sprees will reveal. As with much about Huizenga, his record is pockmarked because of that.

The Hyde column referenced is copied in full at end of post.

For Huizenga, Dolphins were money in the bank

South Florida Sun-Sentinel.com

Dave Hyde – Sports Columnist – January 27, 2009

I can back into this column by noting H. Wayne Huizenga was a fine Dolphins owner who spent money, tried to win, was liked by employees, hired people who were considered best for the job and, in this final season, finally reaped a public reward for his 15 years as owner. All of which I believe.

Or I can just note Huizenga banked an estimated $731 million by owning the team and stadium and that surely trumps his warm and fuzzy feeling from this final season. Or any pain of the Wannstedt Years.

Did he have fun as an owner or what?

Some fans who don’t know the facts of life, or sports, will be surprised by this number. Others, of course, will be angry, for some reason. But Huizenga simply was following the normal walk of a successful sports owner and never forgot the most important goal: Sell high.

Actually, it wasn’t even a normal walk for Huizenga. He didn’t get a stadium built for him, which is typically the foundation of most sports-induced fortunes. Instead, he spent big on the stadium, as you’ll see.

Still, it goes without saying as fans and media shout about Ernest Wilfork’s $6 million signing bonus how this is mere spittle in the spittoon of the bigger game playing out. At the right price, in the right sport, time always makes the owner a winner. It sure did for Huizenga in the NFL.

Let’s examine how. First, there were his costs. Huizenga paid $168 million for the team and stadium in 1994 and assumed $100 million of debt on Joe Robbie Stadium. He bought 107 acres around the stadium for $11 million. He also said the recent upgrades around the stadium totaled $300 million. Total cost: $579 million.

Now, let’s add up the profits. First, there’s the biggie, the $1.1 billion sales price that Stephen M. Ross reportedly is paying for the team, stadium and land.

Next come the team and stadium profits. The two were intertwined in some cases. Club and suite seats, for instance, were set up to pay off the stadium’s debt. Two sources said the Dolphins made an estimated $10 million to $15 million annual profit, depending on varying factors such as players’ signing bonuses, facility upgrades or, say, the cost of Bill Parcells.

Andrew Zimbalist, a prominent sports economist, said those annual profit figures are in line with what the Dolphins should make. Let’s be conservative. Let’s say they made $10 million a year. So in the 15 seasons Huizenga owned the Dolphins outright, the team’s profit would have been $150 million.

The trickiest part is the Marlins’ payment to the stadium. It’s a mathematical game where the Marlins pay the stadium 5 percent of ticket sales on attendance up to 1.5 million, 30 percent of concessions and merchandise, 62.5 percent of parking and so on.

A source said, after costs and annual upkeep, the stadium made about $2 million a year on the Marlins. That would be in line with a Zimbalist study in 1997 (back when Huizenga owned the team) based on an internal Marlins document. The stadium also has received $2 million annually from the state as a stadium tax refund. Put all this at $4 million a year — or $60 million over 15 years.

So is it as simple as adding the $1.1 billion sales price with the $150 million Dolphins profit and the $60 million from the stadium — $1.31 billion — and subtracting the costs of $579 million?

“It’s that simple,” Zimbalist said.

Estimated payout: $731 million. Not bad considering his Dolphins investment began with four season tickets on the Orange Bowl’s bench seats in 1966.

Why is this anyone’s business?

There is a practical answer to this, of course. It’s that you can stick your fingers in your ears and hum, “Money makes the world go ’round” the next time a sports owner bellyaches about how much it costs to run a team. Eventually, they’ll get theirs. At least if they’re in a well-run sport like the NFL.

There is an answer of fairness, too. For all the times media and fans drub players about their high-priced contracts, the wider view of sports economics needs to be shown. Well, here it is.

There is the answer of moving forward as well. The Marlins want the public to finance a new stadium. It’s a fair request, given what’s gone on with some South Florida teams as well as other cities. But can you look at Huizenga’s story — $400 million into the stadium between debt service and enhancements — and see why a free stadium is such a draw?

Huizenga, if you meet him, is more than just money. His employees will say that. But to not address the money is to miss the person, too. I once met him in his office, early in his sports career, and he addressed his interest in sports.

With Waste Management, he said, he rented trash cans. With Blockbuster Entertainment, he said, he rented movies. With his sports teams?

“I’m renting seats,” he said.

Better yet, he rented the team. He just handed it to Ross, the new renter. Ross may win more games than Huizenga. But let’s see him try to beat Huizenga on the real scoreboard.

Dave Hyde can be reached at dhyde@SunSentinel.com

Copyright © 2009, South Florida Sun-Sentinel

About Jorge Costales

- Cuban Exile [veni] - Raised in Miami [vidi] - American Citizen [vici]
This entry was posted in Marlins Ballpark & Finances and tagged , . Bookmark the permalink.

2 Responses to Wayne Huizenga — Great Yield, No Grace

  1. Wichi says:

    “Pockmarked”!!!! I love it….He feels about Miami as we feel about him- he’ll chew, but won’t swallow….

  2. Wichi says:

    Also, let me add, awesome title…..

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