Selig's relationship with Mets owner key
If you’re a New York Mets fan, you might be wondering if Commissioner Bud Selig will invoke his “best interests of the game” powers and act to help the embattled franchise.
The short-term answer, for a variety of reasons, is no. The long-term answer, as long as the Mets continue to meet their financial obligations, probably will be no, too.
Selig prefers to act deliberately rather than expeditiously, a style that mostly has served him well in his nearly two decades as commissioner. He is close with Mets owner Fred Wilpon, who is battling for his reputation and professional life. And while the Mets’ financial and legal troubles are troubling and complex, they could be resolved in time.
“I don’t think there are any magic bullets here. The best thing Bud can do is be patient,” said Andrew Zimbalist, a professor of economics at Smith College and the author of 19 books, including “In the Best Interests of Baseball? The Revolutionary Reign of Bud Selig.”
At the moment, the developments are all so fresh.
Wilpon, the Mets’ CEO, and Saul Katz, the team president, are the defendants in a $1 billion lawsuit alleging they ignored warnings that Bernard Madoff, the architect of the biggest Ponzi scheme in U.S. history, was a fraud.
Wilpon and Katz announced last month that they intend to sell 20 to 25 percent of the team due to pressure from the lawsuit filed by Irving Picard, the trustee for the Madoff victims.
Some in the industry are skeptical that the Mets’ owners will succeed in finding investors for a minority interest, and predict that the outcome of the lawsuit, along with the size of the team’s debt, might force Wilpon and Katz to sell the club.
The sale process, however it evolves, could take years to unfold. So could settlement talks, which could bring a different form of closure, possibly enabling Wilpon and Katz to retain control of the franchise.
In the meantime, a takeover of the Mets by baseball is extremely unlikely, according to numerous sources familiar with Selig’s thinking.
Such actions occur only as a “last resort,” one source said. Baseball intervened with the Texas Rangers, loaning the club a reported $40 million, only when former owner Tom Hicks could not meet his payroll.
The Mets are not in nearly as dire a position.
“They still have a payroll of about $140 million,” said one official of an American League club. “It’s not as if all of a sudden they’re the Pittsburgh Pirates.”
Selig declined comment when asked to discuss the Mets. Baseball officials were troubled by the level of detail in Picard’s legal complaint against Wilpon and Katz, sources say. But a complaint is not a judgment. Picard’s job was to put Wilpon and Katz in the worst possible light.
“In spite of all the information that has been released, I don’t think we have an accurate portrayal of Fred’s and Saul’s assets and debts right now,” Zimbalist said. “To be sure, he’s vulnerable. I don’t think we know yet how vulnerable.”
DODGER BLUES, TOO
The Mets, of course, are not Selig’s only problem.
In Los Angeles, Dodgers owner Frank McCourt is fighting to retain control of his team while in the middle of a contentious divorce from his wife, Jamie.
Selig views the McCourts far less kindly than he does Wilpon, sources say. The McCourts are not longtime friends of the commissioner. Court documents from their divorce trial show that they used millions in team revenue for personal use. The highly publicized dispute also is creating great instability for the Dodgers; it is not yet clear which McCourt will end up owning the club.
The Mets, on the other hand, still are run by Wilpon, who is highly respected inside and outside of baseball. They recently hired one of Selig’s former lieutenants, Sandy Alderson, as general manager. Their payroll, for better or worse, remains among the highest in the game, while the Dodgers last season were outspent by the Minnesota Twins.
Selig could take a number of measures to squeeze McCourt, rejecting new local television contracts, partnership agreements and short-term financing from baseball. (According to The Los Angeles Times, McCourt recently received a cash advance from FOX, which holds the Dodgers' local television rights, in order to meet the team's expenses.)
Conversely, it is almost unthinkable that Selig would exert his influence to take an aggressive posture against Wilpon.
“He’s as close to Fred as he is to anybody in the game,” one former baseball executive says.
“(Selig) will do everything humanly possible to help the Wilpons,” another adds, referring to Fred and his son Jeff, the Mets’ chief operating officer. “He will bend himself into a pretzel to help them.”
Fred Wilpon, who became a 50 percent partner of the Mets in 1986 and the team’s full owner in 2002, ranks third in seniority among major-league owners, behind only Jerry Reinsdorf of the White Sox and the Phillies group headed by Bill Giles and David Montgomery. Wilpon has been a senior advisor to Selig, a member of baseball’s executive council, and also a friend.
Selig met last week with the Wilpons and Katz to discuss the team’s finances. Those who know Selig say that he will work quietly and feverishly with Wilpon, advise him to take steps to minimize damage to the franchise, and make life for him within baseball as easy as possible.
“There’s an element of trust between Bud and Fred, which has been very strong for a long time,” says Jeff Smulyan, the former owner of the Seattle Mariners. “That’s the nature of Bud’s commissionership. He has built very strong relationships with people in the game.”
However, another longtime baseball official says the friendship between Selig and Wilpon “isn’t going to stand in the way of Bud protecting the financial strength of the industry,” in the event of a financially crippling judgment or settlement.
Wilpon gives every indication that he will fight the lawsuit and do everything possible to avoid selling not just his majority stake in the club, but also his share of SNY, the team’s regional sports network.
Yet, a former baseball executive describes Wilpon as “gentleman enough never to put the franchise in jeopardy” — willing to step aside, if necessary, without prodding from Selig.
MUCH IS AT STAKE
Still, the Mets are a marquee franchise, a New York team. Their downfall would create a ripple effect throughout the entire industry.
An AL executive framed the argument for Selig acting more forcefully with the Mets: Ownership’s involvement with Madoff is a “black eye” for the game. Team attendance and revenue dropped last season, the Mets’ second at Citi Field. Attendance will dwindle further if the club gets off to a poor start, creating even greater financial strain.
Selig could pursue aggressive solutions for both the Mets and Dodgers, the exec says, citing both clubs for exceeding baseball’s debt-ratio limits. But such a strategy would be a significant, almost shocking departure for Selig, who is described by some as a “fretter,” someone who contemplates weighty issues at length before deciding upon a proper course.
“He’s an owner’s commissioner,” the exec says. “That’s why everyone loves him.”
However, the Mets’ troubles might only worsen.
The team, reportedly deep in debt, owes money to its banks as well as the bondholders who helped finance Citi Field. The Madoff lawsuit is a third potential claim on the team’s collateral, and possibly the largest. One high-ranking official from another club questions whether the Mets will generate enough revenue to cover all of their commitments.
As if that’s not disturbing enough for Wilpon, the pre-trial phase of discovery could lay bare the inner workings of the team’s finances — including the question of whether the Mets used money from the Madoff accounts to meet expenses.
The information, which can be made public, could be damning for the Mets, and amounts to a powerful incentive for the team to settle with Picard. However, lawyers on both sides of the case said recently that settlement talks have ceased.
The timing of the complaint, meanwhile, could not be worse for baseball, with the collective bargaining agreement set to expire in less than a year. The players union and other league partners will get a rare, behind-the-curtain scouting report that could offer an advantage in future negotiations.
Picard’s subpoena power could result in an even more revealing look at a franchise’s finances than the Deadspin.com disclosure of several teams’ balance sheets last summer.
Thus, Selig almost certainly would encourage Wilpon to settle, but the magnitude of the Mets’ predicament otherwise appears beyond his immediate reach.
Sports commissioners do not possess magical powers; those in other professional leagues also refrain from intervening in most legal matters. The partners in two Atlanta sports franchises, the NBA’s Hawks and NHL’s Thrashers, recently engaged in a six-year legal struggle. Neither NBA commissioner David Stern nor NHL commissioner Gary Bettman became actively involved.
Selig also has his other major-league owners to consider. Some might have their own financial problems in the wake of the recent economic crisis, though not at the level of Wilpon’s.
If Selig somehow turned on Wilpon, other owners might question his loyalty to them. At the same time, Selig must be wary of the perception that he is giving Wilpon preferential treatment.
“What the commissioner’s office does is try to be a resource to help people work through things,” says Smulyan, the former owner of the Mariners.
But Selig’s legacy also is at stake.
The commissioner has said he plans to retire in 2012. The problems of the Mets and Dodgers could taint his final years. Other issues also linger. The San Francisco Giants are resisting the Oakland Athletics’ move to San Jose. The Tampa Bay Rays face pressing ballpark concerns. Most important, negotiations with the players union are looming.
Selig’s influence is strong. He is empowered to act in the “best interests of the game.” But with the Mets, larger forces are at work.