This one comes as no shock to anyone.
Yesterday’s announcement that Wilpon Family is looking to sell 20 to 25 percent of the team is only surprising in the timing of the announcement, not the fact that they are looking for a few extra dollars.
Since the Madoff Scandal hit at the end of 2008, whispers of the Wilpons financial woes came across the baseball world and there was talk that Fred Wilpon was looking for friends to invest in the Mets.
None of that happened of course, so now they are opening it up to anyone who has about $170 million to own a piece of the Mets action.
And why this announcement today, after swearing on stacks of bibles for the past two years, the Mets were financially sound.
Well according to multiple sources, the law suit filed by Madoff Trustee Irving Picard, not only is trying to seize any profits the Mets received, but also is going for punitive damages since the Wilpons referred clients to the Ponzi swindler. That number has been reported to be $1 billion, so you can see why Mets ownership is scrambling.
The Wilpons are looking for a settlement with the court, so they probably won’t have to pay the billion, but will still have come up with a large chunk of change.
That’s where these investors come in. The Wilpons hired Steve Greenberg – Hank’s son – to find potential investors, but before Fred and Jeff can breathe a sigh of relief, understand, that doesn’t mean they will get any. Last year, Tom Hicks was looking for silent investors with the Texas Rangers, and when none surfaced he was forced to sell the whole team.
Minority investors work when the team is run soundly. It worked for the Pittsburgh Steelers, because the NFL prints money, and it would work with a team like the Yankees, because there is a built in guarantee that the money invested would get a return.
But the last few seasons saw turmoil for the Wilpons, and why would anyone want to invest in that? This is a team that is leveraged to the hilt and on the hook for the Citi Field bond payments. Last year, they were downgraded to junk status, but unlike a corporate bond, which can easily default, these are municipal obligations, so the City of New York is involved.
Then there’s the large payroll with diminishing attendance, which never seems to work for any club.
Actually the only thing going for the Wilpons these days is SNY, but Jeff Wilpon said, the asset isn’t for sale.
Back in the late 1990s, there was talk about Jame Dolan coming in and buying the Mets. That probably won’t happen now, as the Mets are no long a MSG Network program and there also may be an ownership conflict with Dolan’s uncle owning the Cleveland Indians.
All of this points to a very tough road ahead for the Mets. With a team value – according to Forbes – of $858 million, the Wilpons just might be forced to sell if they are on the hook for that billion dollars. And even if they only will owe a portion of that, they may have to sell controlling interest if no minority buyers come through.
This means is that a once solid ownership team is now full of question marks and everything is resolved one way or another, everything move the Mets do will be clouded by the Madoff actions.
And that’s been no secret either.
Posted under 1 Billion, Baseball World, Beginning Of The End, Bibles, Chunk, Financial Woes, Fred Wilpon, Law Suit, Minority Investors, New York Mets, Pittsburgh Steelers, Ponzi, Punitive Damages, Sigh Of Relief, Stacks, Steve Greenberg, Texas Rangers, Tom Hicks, Top Story, Trustee, Turmoil, Whispers
This post was written by Joe McDonald on January 29, 2011