In case you missed it, Rich Sandomir had a great scoop on how the Mets plan to cobble enough money together to get through the offseason. 2010’s plan, an MLB loan, is apparently no longer available. 2011’s plan, a bridge loan ahead of a minority ownership sale, isn’t available for the simple reason that there aren’t more shares to sell.
So 2012’s plan, according to Sandomir, is to borrow more against SNY. This is theoretically possible, since the Wilpon group has borrowed only $450 million against a 65 percent stake in SNY, and the company is believed to be worth over a billion dollars.
What this will mean, though, is any additional borrowing, and/or time extension on repayment, almost certainly carries with it a higher interest rate. And that will cut into the margin of error the team has for losing money.
But all of this requires a number of entities to sign off on the new debt: the debtholders on the SNY loan, the debtholders on the loan against the team ($320 million, roughly, due in June 2014), Major League Baseball (probably the easiest sell, given Bud Selig’s see-no-debt precedent with this ownership group), and Comcast/Time Warner, the Wilpon partners in SNY. And to sign off, they’ll all want a piece of the money coming in, making the ultimate payoff of the last profit spigot for Sterling that much smaller.
Financially speaking, it’s epic drama. For the Mets to get back on firm financial footing, it’s probably just going to delay things a bit. The higher the ultimate amount of new money the owners squeeze out of this scenario, and that is if they do, the more likely it is to decimate annual profits from SNY to Mets ownership. But if they pull it off, ownership will manage, with few other options, to have grabbed tomorrow’s SNY profits today.
In a sport where salaries appear set to rise exponentially because the other teams around MLB can take profits from local TV deals and put them into new player acquisitions, not financial survival, that’s a bad omen for the Mets, ompetitively. But then, that’s tomorrow’s problem, isn’t it?