Category: Management

Mets Owners File to Dismiss Madoff Lawsuit

Bernard Madoff's mugshot
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Although Fred and Jeff Wilpon and Saul Katz are wealthy, they don’t know very much about investing their money or how it’s handled. At least that’s their story in a legal filing attempting to dismiss the Madoff trustee lawsuit against them for more than $1 billion.

The defendants have consistently stated that the trustee’s lawsuit is a work of fiction. But reading through the legal filing from the Mets owners tonight, I’d have to say that their side of the story doesn’t come across well.

I find it hard to believe that the Wilpons and Katz aren’t sophisticated investors and that’s the argument that they’re making. Anyone that controls billions of dollars makes it their business to be a sophisticated investor. Casting themselves as bumbling fools that happened to make more money than most people see in their lives is ridiculous.

The Mets owners need to get serious about settling this case. This stunt of a dismissal motion is nothing more than a PR tactic being used to try to fight the lawsuit through the media. If they don’t get serious about settling the case and solidifying their ownership position with the Mets, it’s going to continue to hurt the team in multiple ways. Notably, the players will have to continue to answer questions day after day about the team’s finances instead of the game on the field.

This “uncertainty” is going to continue as long as the owners continue to make statements like the following from Saul Katz:

“I don’t do well in the markets, the stock market,” Katz said. “I’m not good at it, it’s not my business. I don’t have an active account anywhere.”

Fred Wilpon was asked in a deposition if he knew how Madoff was able to make money investing:

“I’m not an investment person…so I wouldn’t have any kind of expertise.”

If this is the strategy that the Wilpons and Katz plan to employ, they’re in bigger trouble with this lawsuit than I thought they were. Playing dumb is never a good defense and for people that built an empire in New York it’s a really bad idea.

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Video: Mets Spring Training, Secret Loans, Bench

Kerel Cooper of the On The Black and I got together again to talk about the state of the Mets. This week we cover spring training games starting, MLB issuing a secret loan to the Mets, the bullpen, and the candidates for the bench in 2011.

A couple of issues we talked about that are worth discussion are that I love Jenrry Mejia in the bullpen and hate Nick Evans coming off the bench. Check out the video below to see why.

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Buying Mets 2011 Tickets?

Citi Field at Night
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If you’re on the Mets email list, you know that they’ve been sending a constant stream of emails attempting to entice you into purchasing tickets for the 2011 season. I haven’t purchased any yet and I don’t plan to until I get a sense for what this team looks like on the field. I don’t know about you, but I haven’t liked what I’ve seen since 2007 and I’m just not motivated by the slight roster changes this year to purchase tickets.

Ken Belson and Richard Sandomir wrote a good piece in today’s NY Times about the state of the team’s finances, as if we haven’t read enough about that recently, and the Mets tickets sales for this year. They write that ticket sales for this season are going so poorly that the team is literally in a state of panic about it. Apparently, they replaced the long-time head of ticket sales and last week let go of several full-time employees, and aren’t re-hiring several part-time employees in the ticket office.

I hate to hear that people are losing their jobs. I’ve been laid off before too and it’s a terrible experience. So I don’t wish that on anybody. Often, it’s not the person getting laid off that’s at fault either. Poor management decisions can lead to that and the poor managers often keep their jobs for some unknown reason.

The Catch-22 of the situation is that the Mets didn’t make any changes to the roster that would motivate fans, like me, to go out and buy a ticket plan. Fans aren’t buying tickets so the team doesn’t have the revenue to make major player moves.  My strategy this year, as it has been the last several seasons, is to look for a good team and pitching match up and buy tickets on the secondary market for those individual games. I feel that it’s helping the fans that did purchase season tickets to sell some of them. Although I probably end up buying tickets from some horrible broker that bought thousands of tickets. Who knows when you buy on StubHub?

I’m curious to know what you ticket buying strategy is for 2011. Leave a comment below.

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Mets Receive $25 Million Bailout From MLB

The modern MLB logo was first used in 1969.
Image via Wikipedia

The New York Times revealed the existence of a $25 million loan from MLB to the Mets last November. Under pressure from a $1 billion lawsuit by the trustee for the Bernie Madoff Ponzi scheme, the Wilpons reached out to their old friend, MLB Commissioner Bud Selig, for a line of funding to keep the Mets operating for a short time.

The loan was so secret that Selig didn’t even tell the other owners that he was providing a bailout to the team one of the highest payrolls in the league and one of the priciest front offices as well. Selig finally told baseball’s executive committee in January about the existence of the loan. A Times reporter asked Fred Wilpon yesterday if he received financial assistance from MLB. Wilpon said he didn’t want to talk about team finances and dashed away quickly. When Wilpon was told that the Times found out about the secret loan, the team issued a brief statement to the media:

We said in October that we expected to have a short-term liquidity issue. To address this, we did receive a loan from Major League Baseball in November. Beyond that, we will not discuss the matter any further.

Last year MLB provided about $40 million in assistance to the Texas Rangers. That was because the owner and team were in bankruptcy. The loan that the Mets received isn’t far off in dollar value and is very telling about the state of the Mets finances compared to where the Rangers were last year.

The issue that concerns me is that the Wilpons haven’t been forthright, whatsoever, with the fans and the media about the real situation. Last year the Wilpons said the lawsuit didn’t have any financial impact on the operations of the Mets. It has. Last month the Wilpons admitted that they’re trying to find a minority investor in the team but there was no issue with operations. Last week the Wilpons arrived in Port St. Lucie and reiterated that the Mets had no financing problems.

The owners haven’t been forthcoming with the fans about the real situation with the team’s finances. Going forward, we have to take everything they reveal about the finances with a grain of salt. They’re being careful not to lie about it, but they’re certainly not talking about the true nature of the problem that this caused for the team.

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Video: ESPN OTL on Mets-Madoff Lawsuit

NEW YORK - JANUARY 14: Accused financier Bern...
Image by Getty Images via @daylife

This is the video that aired Sunday morning from ESPN’s Outside the Lines show on the Mets relationship to Madoff. Much of the segment is conducted with Larry King, who was introduced to Bernie Madoff by Fred Wilpon. The piece is well done, as most of the ESPN segments are, but there really isn’t any groundbreaking material here that you probably don’t already know.

http://espn.go.com/videohub/player/embed.swf

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Mets-Madoff Lawsuit Could Expose MLB Finances

NEW YORK - NOVEMBER 23: Fred Wilpon, General M...
Image by Getty Images via @daylife

There are so many potentially negative scenarios that could arise from the Madoff trustee’s suit against the owners of the Mets that it’s difficult to pinpoint any one of them as the worst case scenario. Obviously, the Wilpons and Saul Katz could lose a judgment or a costly settlement that could cause them to sell the team or plunge the team into financial ruin.

In addition to the potential disasters that the Mets’ owner face is the collateral damage that could occur from the lawsuit. Ken Rosenthal and Jon Paul Morosi wrote a great piece for Fox Sports that examines the possibility that the lawsuit could force the exposure of some MLB financial data related to the Mets. That’s a nightmare scenario for MLB and the other owners. One former baseball executive described the damage that could be done to MLB if their finances are exposed in the Madoff lawsuit:

The executive added that the league’s business partners — such as networks, corporate sponsors, and other advertisers — could conceivably become aware of financial information that wasn’t previously available to them. Armed with this data, those entities may be able to negotiate contracts on terms less favorable to MLB and its clubs.

It’s possible that the Madoff lawsuit could cause irreparable damage to not only the Mets, but the entire league if it can’t be settled before it goes to court. Both the trustee and MLB will be putting tremendous pressure on the Wilpons and Katz to get this issue settled before the collateral damage impacts MLB as a whole.

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Video: ESPN on Mets-Madoff Lawsuit

http://espn.go.com/videohub/player/embed.swf

Jayson Stark and Karl Ravech bring up some good points about the whole Madoff mess that the Wilpons are in. Why would anybody want to buy into a minority share of the team with the controlling partner in such a dire predicament? That’s the thing that doesn’t make sense to me. I suppose that a minority owner could have a stipulation in their agreement to purchase the team from the Wilpons at some point. Other than that, I can’t think of a reason that someone would want to buy a stake in this team right now.

Another good point they brought up in the video was about the settlement talks. Why would the Wilpons be so adamant about losing money to Madoff and then entertain the idea of settling the case? A losing investor shouldn’t be talking about settling the case!

I have to say that I agree with a lot of the opinions that I’ve read about the future of the Wilpons owning this team. I believe, at some point, that the Madoff lawsuit is going to force the Wilpons to sell all or most of the Mets and SNY. How about you?