All throughout their financial siege, the Wilpon family vowed to never sell the Mets, even as it seemed bankruptcy hovered over them like an anvil. The team’s debts were staggering, attendance was falling and if that wasn’t enough, the clawback lawsuit initiated by Irving Picard, the trustee recovering funds from the Madoff Ponzi scheme, was the final step into the inferno.
Only, it wasn’t. Incredibly, the Wilpons have survived these very long odds, settling with Picard on the very morning the trial was supposed to begin in Manhattan. Instead of the $386 million they could’ve been forced to pay if found guilty of willful negligence to the scheme, the brokered deal could let the Wilpons off the hook for as little as $71 million — and that’s not even due until 2015.
What’s all it mean to the future of the team itself? For Mets fans hoping/praying for regime change, forget it — the Wilpons aren’t going anywhere. The terms of the settlement are lenient enough to give ownership full control for years to come.
But that’s not to say the Mets are ready to begin their rebirth. Quite the contrary: The only way the Wilpons can survive in the post-Madoff era is to restructure their existing debt, lower payroll even further while riding out Johan Santana’s and Jason Bay’s albatross contracts and otherwise run the franchise on the cheap.
However, several corrective steps were taken later in the day on Monday. According to the New York Daily News, the Wilpons repaid both MLB and Bank of America a total of $65 million in outstanding loans after raising $240 million from investors.
Whether the rest of the money will be poured into the roster and on-field product remains to be seen. Until proven otherwise, the fans came away the proceedings as the temporary losers, still reeling from the $50 million the Wilpons slashed from the payroll over the winter.
FoxSports’s Ken Rosenthal had previously called for Bud Selig’s intervention if the Mets’ austerity-phase ever became permanent. That was the grassroots sentiment, one that sparked talk of a fan-boycott this season. But Selig never flinched. In fact, he went out of his way to protect his friend, Fred Wilpon, and now we know why: The commissioner knew the money would be repaid the moment the trial was settled.
So there was Wilpon, standing outside the courthouse on Monday, saying, “my first priority is getting down to Florida tomorrow and try to bring the Sterling (Equities) Mets back to prominence."
What the owner couldn’t outline is his road map to respectability. The effects of that $50 million were, after all, devastating: Not only were the Mets unable to make an offer to Jose Reyes, they couldn’t even assemble a respectable bench for 2012.
Remember, this was a team that lost $70 million last year, as attendance fell to 2.3 million — or just about half of what the team drew in 2008, the final year at Shea Stadium.
Newsday recently reported that ballpark revenue has declined by 30 percent since the opening of Citi Field in 2009, while the sale of premium seats had fallen by some 50 percent.
What the Wilpons desperately need is an infusion of revenue — not just investors (who will have to be repaid in three years) but more fans buying tickets and outside investors willing to write large checks. And it still remains to be seen who, exactly, bought in. Last month Wilpon indicated that four of the shares, sold in $20 million increments, were mined from SNY, the network owned by the Mets. And two others were paid for by Jeff Wilpon, Fred’s son, and Saul Katz, Fred’s brother-in-law.
Steve Cohen represented the sole outside investor, and he may be forced to withdraw, given his status as the leading investor in line to purchase the Dodgers.
So it’s fair for Mets fans to ask the Wilpons what’s in store, other than years and years of debt pay-down. The family owes $430 million in principal of a loan against the team, due in 2014. They owe $450 million in principal of a loan against SNY, back in 2015. They owe an estimated $600 million, due in $25 million increments every six months, on the ballpark.
These are the fiscal realities that figure to keep the Mets locked in a nasty catch-22. They haven’t had enough extra cash to upgrade the roster, but without enough on-field talent to compete with, say, the Phillies and Marlins, let alone the Braves and Nationals, how are the Wilpons going to generate ticket-sales that would fund a renaissance?
Yes, history says it’s possible to win with a slimmed-down payroll. The Rays have proved that. But it takes a disciplined five-year business plan, smart drafting and a thriving farm system. It also helps to work in a smaller market, far removed from the Yankees monolith.
The Mets have none of these bullets in their chamber. Many of their fans, in fact, had already given up, promising to stay home until the Wilpons were forced to divest. One way or another, they figured, someone would save them — if not Selig, then at least Picard.
Today, there’s no one on the horizon other than a smiling Fred Wilpon, vowing decades of uninterrupted family control. The entire hierarchy emerged triumphant from the courthouse, convinced the worst was over, although you couldn’t blame the fans for feeling this was one celebration they weren’t invited to.