Big News! (update: Mets Minority Stake For Sale)

[G-Fafif]

Bret Saberhagen is another 1990s Met riding the long-term gravy train, according to WSJ's Mike Sielski last year:

Years earlier, [Dennis] Gilbert had negotiated with former Mets general manager Al Harazin a similar deal for Bret Saberhagen, who pitched for the team from 1992 to 1995. For 25 years starting in 2004, Mr. Saberhagen receives annual deferred payments of $250,000. So when the Mets decided to buy out Mr. Bonilla's contract, they had precedent and a template already in place for such an agreement.

That wasn't a walkaway deal. That was part of Saberhagen's contract. And nobody mentioned Madoff in the context of Bret the Met, though one assumes if investing deferred monies with him was the norm, it was indeed done.

[Ceetar]

Frayed Knot wrote: Valadius wrote: Who else besides Bonilla and Frank Cashen had their deferred payments invested with Madoff? Probably everyone who had a deferred structure. The Times article kind of implies that deferring money so you can invest the remainder during the interim was unique to the Mets or something but that's what everyone does with deferred payments, essentially it's the purpose of structuring a contract with deferred payments. The problem comes up in that not all investments are made with a swindler.

the Yankees deferred some of..Rivera? Jeter?s contract. Beltran has 5million deferred for 2011.

[batmagadanleadoff]

Forbes sez Mets book value is negative $225M

Excerpt:

Ever since he bought controlling interest of the New York Mets in 2002, Fred Wilpon has used leverage to juice his MLB franchise. He borrowed heavily to buy out Nelson Doubleday, even promising his former partner tens of millions of dollars if the Mets ever moved into a new ballpark (they did, with Citi Field opening in 2009). His team is also on the hook for $40 million a year in debt service tied to the bonds used to finance Citi Field (the bonds now carry a junk rating). Now all this debt could very well come crashing down on Wilpon as a result of his involvement with Bernie Madoff. As I wrote earlier, the Mets and their lease to Citi Field are worth about $845 million. But there is $375 million of debt attached to the Mets franchise and $695 million tied to the ballpark, leaving these assets with an aggregate negative book value of $225 million.

[batmagadanleadoff]

Charting the Mets and Yankees attendance -1962-2010. (from another article on the Madoff mess:

[Guest LeiterWagnerFasterStrongr]

So if I "buy" 20-25% of that, can I get that $45-57M in cash? 'Cause the deferred-payment thing has a little stigma about it these days.

[metirish]

Can Mark Cuban fuck off already?

[Edgy MD]

I'm not sure if investing deferred salary money in their Madoff fund further implicates them. If I had access to that fund and believed in its legitimacy, that's what I'd do.

It would smell fishier if they were getting those returns but were still putting larger amounts elsewhere, no? Maybe?

[batmagadanleadoff]

All quiet on the NYT front tonight.

[batmagadanleadoff]

SNY May Be Part of Mets Deal

The Wall Street Journal reports that:

The New York Mets would consider selling a portion of its share in the regional sports cable network SNY if it can't otherwise sell a minority stake in the team, according to a person familiar with the matter. Team executives announced on a conference call Friday that they would consider selling up to 25% of the ballclub to a minority partner. They also said Friday that a stake in SNY would not be part of the deal. The person familiar with the matter said the team is confident it can sell a minority share of the ballclub without including a piece of SNY but would consider including a piece of SNY in the deal "if and when it became a necessity." A Mets spokesman declined to comment.

http://online.wsj.com/article/SB10001424052748703437304576120691070959136.html

Everything's negotiable, they say.

[Edgy MD]

Seems like a minor print war happening here, with the News bending over backwards to discredit the Times, running hard with a front-page story accusing the Gray Lady of being a pawn and being fed a story by Picard.

This guy sums up both sides.

[Edgy MD]

Breakdown!

Leak Flap Upends Talks Between Madoff Trustee, Mets Owners By MICHAEL ROTHFELD Negotiations in a potential settlement between the New York Mets owners and the trustee recovering money for Bernard Madoff's victims broke down Thursday amid a public dispute over the leaking of information from a sealed lawsuit. "We are no longer pursuing settlement negotiations," said David Sheehan, a lawyer for the trustee Irving Picard, who filed a lawsuit against Mets owner Fred Wilpon and his associates, under seal in December as negotiations continued. After Mr. Wilpon announced last Friday that up to quarter of the baseball team would be up for sale, details of the lawsuit leaked out. Lawyers for Mr. Wilpon criticized the leaks in court papers and media interviews. Mr. Sheehan said the leaks didn't come from his office. "Defendants cannot cry confidentiality to this court while publicly attacking the complaint and continuing to frustrate the public's right to know the contents of the same complaint they disparage," Mr. Sheehan said in a letter sent on Thursday to Judge Burton Lifland. The original move to seal the lawsuit was opposed in federal bankruptcy court by several media organizations, which have filed a request to make the complaint public. The hearing to decide whether to unseal the lawsuit is scheduled for next week. Mr. Picard's lawsuit seeks more than $300 million in what the trustee said were false profits withdrawn by Mr. Wilpon, his associates, relatives and related business entities from the Ponzi scheme. The lawsuit also seeks additional money, with Mr. Picard alleging that Mr. Wilpon and his associates knew or should have known that Mr. Madoff's business was a fraud. In court papers, lawyers for Mr. Wilpon and his associates have called the accusations "baseless."

[Guest John Cougar Lunchbucket]

You know what would be awesome? A fistfight.

[Guest LeiterWagnerFasterStrongr]

I have a real problem believing that any improper information leaks came from a Wilpon-run enterprise.

(Also, that there's any gambling going on in this establishment.)

[Edgy MD]

I was looking forward to Fred using the word "motherfucker" during a press conference.

[Ceetar]

John Cougar Lunchbucket wrote: You know what would be awesome? A fistfight.

between two goalies!

wait, that was yesterday.

[Guest LeiterWagnerFasterStrongr]

"Last night I had a dream.
When I got back to Flushing,
I had one hell of a buzzing in my ear.
First, I swatted away Francesa,
For being a giant pain in the rear.
I made hay of Heyman,
For his many crimes.
I done whupped on those wussies
Spilling ink at the Times.
You know I�m bad.
Just last week, I shook up Sherman,
Now I'm-a pick on Picard.
I�m so clean, I make janitors hard.
I'm so sweet, man,
Your molar going to howl.
When I gets to Irv,
He'll lose control of his bowels.
I'm not much for firing, but I'll give you the chills.
You ain't seen nothing, less you seen Freddy Wills!"

[Benjamin Grimm]

I hope that when I'm Fred Wilpon's age, my face doesn't look nearly as mushy as his does now.

[Edgy MD]

I'm gonna fight 'em all
An Irving Madoff army couldn't hold me back
That mother ripped us off
It's not on me to pay you muthafuckas back

And I'm talking to my son at night
Because he runs the Mets
And you know I'm gonna blow your mind
A Charlie Samuels bet
And the message coming from my guys
Says leave it alone!

Don't want to hear about it
I invested all my money with a freak from Hell
Everyone knows about it
From the mnor leaguers to big fat Heath Bell

And if I catch your lawyer come my way
I'm gonna serve it to you
I got a lawyer and a case o' beer
But thats what I'll do
And the feeling coming from my bones
Is leaking to Jim Rome!

I'm going to Buffalo
Far away from Queens to the Triple-A
I'm calling Marky Ruffalo
I bet he's got some cash that'll help me pay

And I'm bleeding, and I'm bleeding, and I'm bleeding
Right before the Lord
All my team is being sold from me
And I will own no more
And the words coming from my blood
Are leaking to Jim Rome!

[batmagadanleadoff]

Wilpon, Sterling, agree to unseal Madoff complaint.

http://www.nbcnewyork.com/news/sports/MetsMadoff-Documents-To-Be-made-Public-115212109.html

Lawyers for the owners of the New York Mets are dropping their efforts to keep records sealed in their connection with the Madoff Ponzi scheme, it was revealed today.

Karen Wagner, who represents the Wilpons and other Mets owners, told Bankruptcy Court Judge Burton they now "agree that the complaint should be unsealed immediately."

Wagner said leaks in the case have made keeping the documents secret no longer practical. NBC-New York and The New York Times had filed motions with Judge Burton, requesting to seek access to the documents. To date, the Court has offered no explanation as to why it was keeping the records sealed.

The Mets owners said last week that they were going to try to sell part of the team to cover what could turn out to be hundreds of millions of dollars the team owners owe from profits they took out of Bernie Madoff's Ponzi scheme. The Mets owners deny wrongdoing or having had any knowledge Madoff was a fraud.

The Trustee has alleged the Mets owners should have known or suspected a criminal scheme was underway based on their alleged outsized profits.

Details of the allegations in the court document remain secret but could become public soon.

[Guest John Cougar Lunchbucket]

I suppose if nothing else this case teaches M et fans about smart investing. Maybe.

Picard's $1 billion compliant against Morgan Stanley, also alleging they "shoula known" was unsealed today:

The complaint contains a redacted email from a JPMorgan risk officer warning as early as June, 2007 that Madoff was running a Ponzi scheme, and using the bank to hold his money. "For whatever it[']s worth, I am sitting at lunch with [JPMC Employee 1] who just told me that there is a well-known cloud over the head of Madoff and that his returns are speculated to be part of a [P]onzi scheme," the email reads.

[Frayed Knot]

Of course, most of the people the trustee is collecting [u:1xxu8kh8]for[/u:1xxu8kh8] should have known too.

[ashie62]

Well I work for MS and I didn't know

Negative 225 Million book value? Too late for TARP!

[Frayed Knot]

MS?

Point being that the trustee is partially basing his suits on the idea that the ones who made out on the Madoff deals "should have known" that the return rates and success rates were too good to be true. But the same could be said for the folks who ultimately lost on the deal; after all, they were most likely seeing paper "profits" in the same range and presumably also not blowing a lot of whistles about it.

Not that that makes the whole suit unworthy or anything. It's just a bit ironic to claim money from one set of folks on the basis that they should have known better in favor of clients who (assuming the first bunch weren't in cahoots) were pretty much in the same boat.

[Valadius]

Frayed Knot wrote: MS?

Morgan Stanley, I presume?

[ashie62]

You betcha since 1990.

[ashie62]

Frayed Knot wrote: MS? Point being that the trustee is partially basing his suits on the idea that the ones who made out on the Madoff deals "should have known" that the return rates and success rates were too good to be true. But the same could be said for the folks who ultimately lost on the deal; after all, they were most likely seeing paper "profits" in the same range and presumably also not blowing a lot of whistles about it. Not that that makes the whole suit unworthy or anything. It's just a bit ironic to claim money from one set of folks on the basis that they should have known better in favor of clients who (assuming the first bunch weren't in cahoots) were pretty much in the same boat.

The suit claims that financial firms such as JPM and MS suspected Madoff was fradulent and allowed him to trade through their desk. That is putting a firms interest ahead of a client. Any client, even those not trading with Madoff. ANY JPM customer.

Simply put, If I purchase 100 shares of Apple for a customer my client has been harmed. Why, because by my firm doing any trading with a knowing fraud puts my customer at a disadvantage.

Very, Very hard to prove..but, in JPM's case I suspect Jamie Diamond will cut a deal at somewhat less than 6 billion requested.

[Guest John Cougar Lunchbucket]

Pretty sure the trustee is just doing what any bankruptcy trustee is supposed to do -- he's going after what he can to help the people who were wiped out. This idea that its personal (see Lupica today) is way off-base.

[Edgy MD]

Sportswriters tend to think it's personal. Beltran msising the tript o the hospital? Castillo dropping the pop? Jeter diving into the stands?

They've got to frame it as personal. If they don't have a soap opera, they don't know what to write about.

Lupica's a tool, though.

[ashie62]

John Cougar Lunchbucket wrote: Pretty sure the trustee is just doing what any bankruptcy trustee is supposed to do -- he's going after what he can to help the people who were wiped out. This idea that its personal (see Lupica today) is way off-base.

100 percent correct..

[Guest The Second Spitter]

Ashie62 wrote: Frayed Knot wrote: MS? Point being that the trustee is partially basing his suits on the idea that the ones who made out on the Madoff deals "should have known" that the return rates and success rates were too good to be true. But the same could be said for the folks who ultimately lost on the deal; after all, they were most likely seeing paper "profits" in the same range and presumably also not blowing a lot of whistles about it. Not that that makes the whole suit unworthy or anything. It's just a bit ironic to claim money from one set of folks on the basis that they should have known better in favor of clients who (assuming the first bunch weren't in cahoots) were pretty much in the same boat. The suit claims that financial firms such as JPM and MS suspected Madoff was fradulent and allowed him to trade through their desk. That is putting a firms interest ahead of a client. Any client, even those not trading with Madoff. ANY JPM customer. Simply put, If I purchase 100 shares of Apple for a customer my client has been harmed. Why, because by my firm doing any trading with a knowing fraud puts my customer at a disadvantage. Very, Very hard to prove..but, in JPM's case I suspect Jamie Diamond will cut a deal at somewhat less than 6 billion requested.

Except Wilpon did not owe a fiduciary duty to the other members of the LLC.