Well, the Met ownership has decided that the team’s financial struggles, which didn’t exist, then weren’t anyone’s business, then became part of a massive PR campaign through interviews in The New Yorker and Sports Illustrated, then were nobody’s business again, are once again worth publicly discussing. Fred Wilpon gave interviews to Newsday and the Wall Street Journal, a day after a story appeared in the New York Daily News about the ongoing minority share sale efforts.
But for all the sound and fury, what did we learn this week?
The supposed bombshell in the New York Daily News piece is as follows:
“The Mets are close to finalizing the sale of at least five $20 million shares in the team, a move that would help pay off $350 million in club debt, baseball officials familiar with the transactions told the Daily News.
Major League Baseball has vetted and approved the investors, and the team is expected to close those sales and raise more than $100 million within the month, the officials said.”
Let’s set aside that the Daily News is under-reporting the team debt, which is actually $430 million. For those keeping score as home, roughly eight months after the Mets had a minority investor, David Einhorn, approved by Major League Baseball to invest $200 million, the Mets have five investors ready to provide them with half that money. That $100 million, if it comes to pass, will go toward paying the $40 million bridge loan from last November, $25 million to Major League Baseball for a loan way past due, leaving $35 million to help them cover interest against the $430 million due against the team (totaled $30 million last year), $20 million in interest against their SNY loan due in 2015 (totaled $20 million last year), and a pair of roughly $25 million payments due on Citi Field in June and December.
And then there’s that pesky trial, starting in March, which has Irving Picard, trustee for the Bernie Madoff victims, seeking $386 million from Wilpon and his partners.
Of course, what we learned from Einhorn, and the many other times the Mets have claimed to have investors in place, is that “close” doesn’t always lead to actual cash in hand. But even in the scenario where the Wilpon group gets those five investors, it doesn’t get them very far.
As far as the two interviews of Wilpon go, the financial and legal questions were apparently off limits. The team’s rationale for hiring CRG Partners, a turnaround firm, wasn’t addressed. The result is an interview that establishes two points:
1. More than a month after Jose Reyes left, Wilpon finally provided a statement on losing the star shortstop that wasn’t utterly tone-deaf. That doesn’t do much for him at this late date.
2. Fred Wilpon still wants to own the Mets.
Well, on point 2: we knew that. The reason to believe the Mets will soon be under new ownership, whether later this year or once those massive loans start coming due in 2014, isn’t that Fred Wilpon is tired of owning the Mets. It is because he doesn’t have nearly enough money to pay his mounting obligations. And all we learned this week is that he might be close to acquiring some money that doesn’t help him cover those known obligations for even the coming year.
For a more complete accounting of the financial and legal challenges ahead, you really ought to read my book on the subject.
9 Comments
In the WSJ yesterday Wilpon said a few interesting things about getting fans back in the seats and winning, something he really doesn’t know much about. Its great that MLB and Selig have approved his friend’s minority investors, now Selig just needs to pull the plug on this guy. The Mets have been bleeding cash for a long time now and the debt has racked up. Long term mediocrity is a real possibility and that would be awful for the Mets and for baseball.
And lastly, a big market NY team shouldn’t lose its star homegrown talent to the Marlins because we simply couldn’t afford to even negotiate with him. If he’s not worth the cost then fine, but to be out of the game before it even begins…
so even if they get the $200 by lets say march .. between the bridge loan and mlb loan and paying interest on the loans against both the team and sny plus the bi annual payments on citifield .. they’ll only be left with $35M and for a team losing $70M with attendance and ticket prices on the decline, still looks like an ugly mess .. not to mention lets say after this trial they’re asked to pay anywhere between $150M – $200M .. i can’t see how this CRG is going to suggest anything but bankruptcy and selling the team
Howard, the question I haven’t seen answered is: of the five $20 million dollar shares being sold, are two being bought by the Wilpons and Katz?
Mike: I believe the five shares do not include the ones bought by Wilponzi and Katzscammed.
Anthony: Good point. Attendance will be down again—I’m guessing to around 20,000 per game. Many fans will boycott—even with the 50th Anniversary promotions. Some fans will still pay Mercedes prices for a Tata Nano though.
The “sound and fury, signifying nothing” quote is really over-used and taken far from it’s original meaning. It’s meant to describe life—- an existential and absurdist view to be sure—- not the actions of a person.
Hey Mike, Steve,
The answer is: we don’t know yet. No one has reported who the new minority owners would be, if this comes to pass. But obviously, that would devalue the amount of cash coming in further.
Edgy, love the literary critique. You may be right, but I felt it was apt. Here is the full text from MacBeth. I’ve called the Wilpon story Shakespearean, and I do think that comparison holds.
“Tomorrow and tomorrow and tomorrow,
Creeps in this petty pace from day to day
To the last syllable of recorded time,
And all our yesterdays have lighted fools
The way to dusty death. Out, out, brief candle!
Life’s but a walking shadow, a poor player
That struts and frets his hour upon the stage
And then is heard no more: it is a tale
Told by an idiot, full of sound and fury,
Signifying nothing.”
If hurlers were horses, “A horse, a horse! My kingdom for a horse!”
Flash: Pelfrey goes 7-13, scratches head, licks fingers, and gets one and a half million dollar raise.
interesting information. there is something to think about