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The Wall Street Journal weighed on on the SEC probe of the Marlins Stadium deal. I was most interested on their perspective on what the SEC probe could be expected to focus on. An excerpt:

A person involved with the ballpark’s financing said the investigation may revolve around the Marlins’ claims that the team needed public help because it could not afford to pay for a new ballpark.
…
The Marlins had argued that the team needed public help to shore up its finances. Financial documents published last year by the website Deadspin showed the team had been turning a profit.
…
Mr. Nortman, who teaches a class on SEC violations for Nova Southeastern’s law school in Fort Lauderdale, says the SEC will likely want to know whether the purchasers of stadium bonds were given full disclosure of the financial status of the borrowers involved, and also whether there may have been any “pay for play” involved on behalf of the parties.

Allow me to expand on “the team had been turning a profit.” According to Forbes — whose reporting the Deadspin financials validated — this is how the Marlins ranked among MLB teams in terms of operating profits in the years before, during, and after finalizing the Stadium agreement with local governments:

• 2006 – $43 million – #1
• 2007 – $36 million – #2
• 2008 – $44 million – #1
• 2009 – $46 million – #1

Appreciate the hurdle the Marlins face in defending themselves.  How to suggest that they did anything but misrepresent their financial condition?

See my recap of the Forbes Business of Baseball reporting on the Marlins from 2002 through 2010 [click here]. Each year is linked to the Forbes reporting for that year.

The WSJ article referenced is copied in full at the end of the post.

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MLB DECEMBER 5, 2011

SEC Examines Marlins Stadium Deal

By TIMOTHY W. MARTIN, REED ALBERGOTTI and MATTHEW FUTTERMAN

The U.S. Securities & Exchange Commission has opened an investigation into the public financing deal behind the Miami Marlins’ new ballpark.

SEC officials delivered letters to the city of Miami and Miami-Dade County Thursday, requesting financial records, meeting minutes and communications with the team and officials from Major League Baseball, according to a person familiar with the matter. Miami and county officials have until Jan. 6 to deliver the documents.

Public funding of the $634 million Miami ballpark has been controversial.

The federal regulators will examine nearly $500 million in bonds sold to fund the ballpark and the financial deal struck for stadium parking garages, according to the county and to a statement from the team.

A person involved with the ballpark’s financing said the investigation may revolve around the Marlins’ claims that the team needed public help because it could not afford to pay for a new ballpark.

SEC senior counsel Drew Panahi declined to comment on the case.

In a statement, the Marlins said they were aware of the investigation. “Of course we will fully cooperate with the SEC’s investigation as needed and assist in whatever way possible.”

A Miami-Dade County spokeswoman said the county “will comply with the SEC’s request and provide the documents they’re asking for.”

It is not clear whether MLB has received subpoenas. A spokesman for the league declined to comment.

The financing plan for the 37,000-seat ballpark, which was built on the site of the former Orange Bowl and is expected to open next spring, has been a source of controversy.

Under the plan, city and county are responsible for nearly 80% of the stadium’s overall cost of $634 million, according to the Miami Herald, which first reported the subpoenas.

The Marlins had argued that the team needed public help to shore up its finances. Financial documents published last year by the website Deadspin showed the team had been turning a profit.

After the documents were published, Marlins president David Samson told the Palm Beach Post the team showed a hefty profit in certain years when it was conserving money for its ballpark project.

The public funding deal, which was struck without a public referendum, came as South Florida faced mounting struggles with high unemployment and a cooling economy.

In March, Miami-Dade County residents recalled mayor Carlos Alvarez—a move that was driven, in part, by his support for the ballpark plan.

Norman Braman, a Miami car mogul who filed an unsuccessful lawsuit in 2008 to block the ballpark deal, wanted to force a public referendum. Mr. Braman also wanted Marlins owner Jeffrey Loria to prove the team needed public dollars by sharing the team’s finances.

In a July 2009 Miami Herald editorial, Mr. Braman said he backed a public referendum because the tough economy meant the government needed to be fiscally responsible. He called a lot of the projected economic benefits “blatant exaggerations” and new jobs a “myth.”

In an interview Saturday, Mr. Braman said he was pleased to learn of the SEC investigation because Miami-Dade residents “are entitled to transparency.”

Mr. Alvarez could not be reached for comment.

While none of the bonds issued for the stadium project are in default, William Nortman, a former SEC lawyer who is now in private practice in Fort Lauderdale, Fla., said the SEC can still press charges if it believes that any financial information was misrepresented during the process.

Mr. Nortman, who teaches a class on SEC violations for Nova Southeastern’s law school in Fort Lauderdale, says the SEC will likely want to know whether the purchasers of stadium bonds were given full disclosure of the financial status of the borrowers involved, and also whether there may have been any “pay for play” involved on behalf of the parties.

“This is not the first time and may not be the last time” that the SEC has looked into bond deals in Miami, he said.

If the SEC finds wrongdoing in the investigation, it can choose to bring a civil suit against parties involved, issue fines or refer the case to the United States Department of Justice for possible criminal charges.

The Marlins drew the third-lowest attendance per game of the 30 Major League Baseball teams in 2011, drawing just 19,007 fans per home game.

Write to Timothy W. Martin at timothy.martin@wsj.com, Reed Albergotti at reed.albergotti@wsj.com and Matthew Futterman at matthew.futterman@wsj.com