Derek Jeter is Facing up to Half a Billion Dollars of Losses on the Miami Marlins
When Derek Jeter purchased the Miami Marlins in late 2017 for $1.2 billion, the team’s average attendance was 20,395 fans per game, putting them at 27th in the league. After trading away all their best players (Stanton, Gordon, and McGowan), their 2018 attendance has averaged an embarrassing 9,558 per game, putting them in last by almost 50%. This 53% decline in attendance as well as a 33% decline in fan spending has severely affected the value of the Marlins as a whole, putting Jeter into a major hole.
With revenue of $219 million and a revenue multiple of 5.11, the value of the Marlins hovered at around $1.2 billion in 2017 – a reasonable value when looking at its purchase price. However, after losing around 11,000 fans who spend an average of $33 per game, their revenue is projected to be down almost $29 million after 81 games this year. This would lead to revenue of $190 million, and now that they are not in a growth mode, they couldn’t justify a MLB average valuation of 5x. Assuming the MLB average over the last 5 years of 4.58 and the value falls to $870 million. However, this doesn’t take the 30% drop in fan spending into account. Furthermore, this doesn’t include the 2018 cash burn.
The Marlins have been playing in front of empty stadiums with one game at just 5,500 in attendance
What does this mean for Derek Jeter and his group? These numbers reveal that Jeter has potentially lost nearly half a billion dollars since acquiring the franchise not even a year ago. The poor front office branding and trading decisions have made the Marlins into the joke of the MLB and have resulted in great losses to the brand.
Written by Dominick Ronan, Edited by Jack Vasquez & Alexander Fleiss