Mets may be hitting rock bottom
Are the Mets for sale? The obvious answer is yes, at least a quarter of the franchise is now being hawked by a Wilpon family that’s suddenly desperate for cash.
The real question, however, is just how much deeper the trouble runs in Queens, and whether one of the National League’s once-wealthiest franchises is headed for complete regime change.
Nothing is certain in the wake of Friday’s stunning developments. The Wilpons are looking for a bailout to the tune of $250 million, or about 25 percent of the Mets’ net worth. They may or may not be able to attract such a large investment without giving up meaningful control of the team — most industry observers think it’s unlikely — but even that sum could be dwarfed by a pending Madoff-related lawsuit.
According to the New York Times, the Wilpons may be on the hook for a whopping $1 billion for their role in history’s largest Ponzi scheme. If that’s true, the Mets will almost certainly have to be sold in their entirety.
For now, ownership is either no-commenting or denying rumors of financial collapse. During a conference call with reporters on Friday afternoon, Fred Wilpon, his son Jeff and sale advisor Steve Greenberg did their best to put a positive spin on an otherwise traumatic day, insisting a partial sale was only one of several options the family was considering.
The younger Wilpon, in fact, suggested the Mets might even stand pat, although that seems implausible, given the lawsuit that hangs over them like an anvil. Irving Picard, the trustee appointed by the bankruptcy court to protect Bernie Madoff’s victims, is suing Sterling Equities, the Wilpons’ investment agency, as profiteers from the scheme.
He’s not just seeking to recoup the $48 million the Wilpons pulled out of their dealings with Madoff, but up to $1 billion, according to the Times. Sources indicated the Wilpons’ conduct could make them liable for the staggering amount; while they likely didn’t realize Madoff was committing fraud, the Wilpons may have nevertheless encouraged others to invest with the since-jailed felon.
That’s what made ownership so needy, the ongoing settlement negotiation with Picard that, at best, could leave the Wilpons hundreds of millions in the hole. That would be more than they could absorb, as the Mets themselves have reportedly experienced declines in revenues of 30-35 percent since the move to Citi Field two years ago.
Attendance is down nearly 15 percent, and there’s been no postseason revenue since the Mets were eliminated in Game 7 of the 2006 NL Championship Series. Although the Mets have steadfastly insisted the Madoff scandal hasn’t bled into the team’s day-to-day operations, it seems hardly coincidental they’ve made no major expenditures since Jason Bay’s $66 million contract was finalized a year ago.
Since then, the Mets have operated on a savagely lean budget. They boast of having a payroll in excess of $140 million, but much of that is tied up in un-movable contracts, like Luis Castillo and Oliver Perez. The real indicator of the Mets’ woes is how little they’ve spent this winter (less than $7 million), which puts them behind even the cash-starved Pirates.
Make no mistake, the Mets’ crisis is being monitored by the commissioner’s office. While Bud Selig declined comment on Friday, major league sources say the commissioner was instrumental in pushing Sandy Alderson toward Flushing as Omar Minaya’s replacement for precisely the reasons that are unfolding now.
One executive from another team said Selig dispatched Alderson to Citi Field not just to turn over the roster in the next 2-3 years, but “to keep Jeff Wilpon out of the dugout” and from making any other bad decisions that could further damage the product.
Similarly, another industry source said Selig’s championing of Alderson as the Mets’ GM of the future wasn’t just a suggestion he hoped Fred Wilpon would listen to, but “an intervention” of behalf of the entire sport.
Mets’ fans can only hope Alderson has a chance to show off his expertise, although, to date, his only job description has been to hold down costs. Next year will be more telling, when the GM has $50 million or so coming off the books.
But who knows if Alderson will be allowed to spend it? Who knows what the Mets will look like in a year, if the Wilpons will even still own the team? They keep promising to maintain full control of the team, but their credibility has taken an enormous hit in recent days.
Remember, this is the same ownership group that angrily attacked author Erin Arvedlund for having “bogus” sources in her book “Too Good to Be True: The Rise and Fall of Bernie Madoff.”
Arvedlund claimed the Mets’ losses were as high as $700 million and because of it, ownership would be forced to sell at least a portion of the team. Turns out she was right, but at the time, Arvedlund was all but called a liar by David Howard, VP of Business Operations.
In a 2009 interview, Howard said, “the team is not for sale, in whole or in part. There is no need to sell, there is no reason to sell. There will be no sale.”
That’s why it’s hard for Mets’ fans to know who to believe anymore. The Mets can spin all they like, but the empire looks and sounds doomed. As one person familiar with the team’s business dealings said, “I don’t care what Fred (Wilpon) says (about not wanting to sell the Mets), he’s going to find it very hard to hold on to this team.”