In the continuing saga about the Mets trying to get out from under the Madoff lawsuits and the attendance problems, MLB has allowed the Mets to secure more debt than the $400 million that’s already on the books. The Mets are now taking out a series of small loans against the team from investors in the $15-$20 million range. The SportsMoney blog has a post today detailing the Mets desperate plight to raise cash and comparable situations in MLB (Rangers and Dodgers).
The investors are offered a chance to get their loan back plus 3% annually in six years or just keep a small stake in ownership of the Mets with no chance for a majority share. Apparently, JP Morgan and other debt holders must have signed off on this strategy. They certainly didn’t like the Mets plan for a $200 million loan/ownership stake from David Einhorn this summer.
This new set of loans will take the Mets to approximately $540 million plus interest leveraged against the team. Keep in mind that the Dodgers, currently in bankruptcy, have the highest ever debt against a team at $555 million.
It sure looks like the Mets are following the path of the Rangers and Dodgers which both ended with team sales via bankruptcy court. But Bud Selig and his good friend Fred Wilpon keep telling us that the Mets are doing fine even though the Mets haven’t repaid their secret $25 million loan from MLB that was due last summer. Maybe some Mets fans would be happy if there was an ownership change for the team?