The New York Post reports that baseball sources confirmed that Mets co-owner Saul Katz not only wanted to sell his stake in the Mets, he tried to convince Fred Wilpon to sell as well. Apparently, Wilpon is intent on leaving the Mets in Jeff’s hands and has no interest in selling.
Photo credit: Flickr Scott Smith
The New York Times is reporting that the Mets are looking to move debt away from the team to SNY to get more favorable debt terms. Plus, they may rearrange the debt and take a dividend for themselves along the way.
I wish that Fred Wilpon and Saul Katz were more interested in improving the Mets roster with their available credit. You might have noticed the 2012 74-win, fourth place Mets had the biggest payroll decrease in MLB history this year with a $50 million reduction from 2011.
It continues to be a sad state of affairs in Queens.
This year Forbes has the Mets down 4% to $719 million in value, just behind the Phillies at $723 million. The Mets and the Rays are the only teams to lose value since last year, mostly due to the Mets massive operating loss of $40.8 million. Only three teams had operating losses (Phillies and Angels were the others) and neither were anywhere close to the Mets loss.
The Mets are now MLB’s sixth most valuable franchise far behind the Yankees in the top spot valued at over a billion dollars MORE than the Mets. It’s incredible how much more valuable the Yankees, Red Sox, and Dodgers are than the Mets. All are listed at or over $1 billion.
It’s likely going to take years for the Mets to gain value back and it’ll have to be done on the field. Most experts (and sane people everywhere) are predicting the Mets will finish at or near the bottom of the NL East this season. Based on the current roster, I agree with that opinion.
The Wilpon/Katz ownership group may have settled the Madoff lawsuit and put that financial problem behind them. But the value of their team is sinking and likely won’t increase this year unless there are some miraculous occurances on the field. Maybe the Jets can loan Tim Tebow to the Mets until the NFL season starts.
The Mets owners Fred Wilpon and Saul Katz were dealt a huge blow today in a New York court. The judge in the Madoff case against Wilpon and Katz agreed with the Madoff trustee and issued a partial summary judgement against the Mets owners. The judgement is for up to $83 million with the exact amount to be determined in the near future.
A trial will begin on March 19th if there isn’t a settlement before then. The trial will be over an additional $303 million that the trustee is going after based on his contention that the Mets owners willfully ignored information indicating that Madoff was running a shady operation.
There’s been a lot of speculation about whether Wilpon and Katz will be able to withstand this judgement and trial to hold onto ownership of the Mets. They’ve been cutting spending on the team drastically in an attempt to align spending with revenue in the last two years. Some might speculate that they’re reducing spending to stockpile cash in case of a negative outcome of the trial. Well, that first negative outcome happened today.
It’ll be interesting to see if there’s a settlement in the next couple of weeks or if this case goes to trial. Either way, I think Wilpon and Katz are on the run and trying to keep ownership of the Mets in any way possible. But it might not be enough. And that would probably be a good thing for fans at this point.
Mets owner Fred Wilpon gave his annual state of the team press conference on the first day of full squad workouts today. It was more of the same spin that we’ve heard in recent years from Fred about the team’s woeful financial situation. Although he did attempt to deflect the reason for the team’s $52 million payroll reduction to Sandy Alderson’s philosophy. That was so laughable that he later admitted that Alderson had a set payroll that he had to work within.
The highlights of the press conference were:
- The Wilpons don’t intend to give up control of the team, if possible
- The team has sold 7 shares of ownership although all but one were bought by entities with connections to the team already
- He admitted that the Madoff lawsuit was having an effect on team finances contrary to his prior statements on the topic
- He’s excited about the group of young players on the team
There isn’t much new there that we didn’t already know. Wilpon has been in near seclusion as the team has sunk deeper into the financial abyss. He typically leaves Alderson or his son, Jeff, to deal with the tough questions from the media. So today was a rare opportunity to hear the state of affairs directly from the horses mouth.
A report by Forbes details the Mets bridge loan from Bank of America and how it was used to pay the debt payment on bonds that financed Citi Field. I wrote about the bridge loan on Monday and the story for the Mets gets worse as more details emerge. The Mets partially funded Citi Field with $547 million of tax-exempt bonds. A payment was due last month for $43.8 million and the Mets didn’t have the money to pay.
The holding company for the bonds, Ambac Assurance Company, had promised to pay the debt payments if the Mets defaulted. But Ambac went belly up in 2010 and filed for bankruptcy. So the Mets defaulting on the debt payment would have left the bond holders with nothing to show for their investment in the team.
The Mets still have payments coming due of $32 million in each of 2013 and 2014. So there’s still a chance they could default. But the Mets are planning to use the $40 million bridge loan to tide them over until they can sell pieces of the team to “small” investors in hopes of raising $200 million.
It’s a sad state of affairs for the Mets. Hopefully, it won’t end in bankruptcy court like the Dodgers and Rangers did recently. In the meantime, we’re the ones left holding the bag with a team that doesn’t appear to have a chance of a winning record in 2012.
The New York Times is reporting that the Mets borrowed another $40 million on top of the existing debt against the team. The Mets already borrowed $25 million from Major League Baseball last year and haven’t been able to repay MLB despite the reported due date being last June. Bank of America issued this latest loan and it was approved by MLB and the lenders that already hold a majority of the debt against the Mets.
The Mets spokesman did acknowledge the loan and described it as a bridge loan. Presumably, the bridge references the Mets attempt to sell small pieces of the team to investors after the deal with David Einhorn fell apart this summer. The Mets appear to be struggling to maintain liquidity. There were reports in the past month that Fred Wilpon and Saul Katz had to put $38 million of their own into the team recently to keep it afloat.
This latest loan and appearance of financial desperation will lead to further calls from Mets fans for the Wilpons to sell the team. Recent poor performances and reducing the payroll instead of investing in the on-field product is leading fans to, rightfully, lose faith in the financial ability of the Wilpons to field a winning team at any point in the near future.