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

[Edgy MD]

Attendance may fall, but such an eventuality is a bad bet to bank on. The 1979 Mets drew 788,905. Dead last in the league last year --- Florida --- drew nearly twice that.

[ashie62]

True..

The "essence" of things may be of a similar seventies morbidity.

Then again, maybe they have a 90-72 2011 season, payroll doesn't get cut too much and a year from now this discussion is a distant memory.

[Edgy MD]

There's still so much every one of us and every columnist doesn't know --- two huge factors being how much money the partial sale will bring in to help the corporation get their heads above water, and how much will Mario Cuomo take away from them to dunk them back down again. (Or conversely, potentially give them a favorable ruling, and unfreeze some of their funds.)

That's what we should be watching out for and I think it's exciting. At least that first part is. New blood, a potential future senior partner, a functioning organization... the wild enthusisasm of David Wright... .

[batmagadanleadoff]

Edgy DC wrote: There's still so much every one of us and every columnist doesn't know --- two huge factors being how much money the partial sale will bring in to help the corporation get their heads above water, and how much will Mario Cuomo take away from them to dunk them back down again. (Or conversely, potentially give them a favorable ruling, and unfreeze some of their funds.)

Cuomo can't make any rulings ... only recommendations, suggestions, etc. He's a non-binding mediator. The parties aren't bound by anything Cuomo might suggest and Cuomo is powerless to enforce anything.


I believe, like you do, that attendance probably won't drop to de Roulet levels, even if the Wilpons do conduct a fire sale. Baseball is significantly more popular today than it was in the '70's. When I was a kid/teen-ager growing up in the '70s, I would often buy Met tickets at the local Manufacturers Hanover Trust Bank branch. Whenever I bought tickets well in advance of the desired game, I always had the option of sitting in prime field box seat territory -- infield, infield about 20 rows behind the dugout, etc.. Looking back, knowing that today, those kinds of seats are owned by season ticket holders, I'm amazed that I was able to buy that kind of seating from the Mets and on an individual game basis. Today, those seats are owned by businesses and individuals that probably would renew their season tickets even if the Mets don't win a single game all season long. Back then, the season ticket base was tiny, compared to what it is today.

[G-Fafif]

To reach 2 million in attendance over 81 home dates, a team has to average about 24,700. Opening Day plus the three Subway Series games (presumably) equals about 168,000. That leaves 1,832,000 for 77 other dates, or about 23,800 (pending makeup, single-admission doubleheaders). Excepting a makeup night portion of a day-night doubleheader (which turned out to be Jon Niese's one-hitter over the Padres), the Mets never reported attendance less than 24,384 in 2010. September/October was almost uniformly a ghost town at Citi Field and the numbers seemed like fiction (fictional numbers seem to be at the root of all these problems). Yet as bleak as things are, to not draw 2 million, the Mets would have to average across an entire season something worse than their worst individual gate from 2010. Doesn't seem likely.

Put another way, 77 Mets-Pirates games from September 13, 2010 (24,384), plus the four likely sellouts, gets you about 45,000 over 2 million for 2011.

OTOH, the Mets would have to lose 21.9% percent of their attendance to dip below 2 million. It's happened before when things really went bad. Most dramatic single-season dip (non-strike) in Shea history was 23.7% from 2002 to 2003. Notorious 1979 represented a 21.7% decline from 1978. 1992 was off 22.1% from 1991.

[Gwreck]

As you mentioned -- the stadium was a ghost town in September, even though tons of tickets had obviously been sold in advance. I think we can safely presume that those numbers will continue to fall (how far, I'm not sure) with each successive crappy season. Package (season/plan) sales will drop a certain amount for 2011 as compared to 2010, and perhaps farther if 2011 is not a successful season.

[metsmarathon]

i'm willing to bet that 25% of the reported attendence were no-shows from full or partial season-ticket holders, who i'm guessing aren't going to be shelling out for another year of the same. especially if the mets are seen as shedding good players to save a buck.

the same people who stopped coming last year, are, i'm guessing, unlikely to pay to stay home again. they're just not going to buy in to the team until they see some tangible progress. it's just the way things (seem to) work.

look, don't get me wrong. i'm not saying that you can't have a good team for $70M, or that you can't draw fans without spending $70M on payroll. what i am saying is that if the mets were to shed sufficient payroll to get down to $70M, and if they were to do it over the course of the next year, met fans would be highly displeased, regardless of whatever prospects were brought back in return, and would not come out to the games, and certainly would not sign on to many season ticket packages.

[metsmarathon]

april 11-14. the second home series of the season. it's a monday thru thursday series. i don't think the mets will average 20k in attendance for those games.

[Ceetar]

Gwreck wrote: As you mentioned -- the stadium was a ghost town in September, even though tons of tickets had obviously been sold in advance. I think we can safely presume that those numbers will continue to fall (how far, I'm not sure) with each successive crappy season. Package (season/plan) sales will drop a certain amount for 2011 as compared to 2010, and perhaps farther if 2011 is not a successful season.

grain of salt for the source (Craig Carton) But he was apparantly reading something that said the Mets got 80% renewals on season tickets.

either way, regardless of the quailty of the team, they're not going to be able to win over fans in a week to come out to a cold April game. I always view the 'swing' as late June/early July. Kids are getting out of school and the weather is warm. If the Mets are winning, people will start coming.

[Guest John Cougar Lunchbucket]

Ceetar wrote: Gwreck wrote: As you mentioned -- the stadium was a ghost town in September, even though tons of tickets had obviously been sold in advance. I think we can safely presume that those numbers will continue to fall (how far, I'm not sure) with each successive crappy season. Package (season/plan) sales will drop a certain amount for 2011 as compared to 2010, and perhaps farther if 2011 is not a successful season. grain of salt for the source (Craig Carton) But he was apparantly reading something that said the Mets got 80% renewals on season tickets.

The question is then will new ticket plan buyers make up that 20%.

I don't get the impression the Mets' problem is revenues, or even that there's an attainable figure that would "rescue" them. The issue is that they owe money all over town, man.

[metirish]

Is there not any MLB rules that each team needs to abide by to show it can stay solvent?(not sure if that's the proper wording right there). For example several soccer teams in England that went in to bankruptcy got punished with point deductions typically starting the following season , so a team starts - 9 points and can take years to get back in to the top flight, but if they are smart the silly spending that got them there is gone and they build through youth.

Of course this wouldn't work here as there is no relegation, instead MLB gives you huge loans.

[ashie62]

John Cougar Lunchbucket wrote: Ceetar wrote: Gwreck wrote: As you mentioned -- the stadium was a ghost town in September, even though tons of tickets had obviously been sold in advance. I think we can safely presume that those numbers will continue to fall (how far, I'm not sure) with each successive crappy season. Package (season/plan) sales will drop a certain amount for 2011 as compared to 2010, and perhaps farther if 2011 is not a successful season. grain of salt for the source (Craig Carton) But he was apparantly reading something that said the Mets got 80% renewals on season tickets. The question is then will new ticket plan buyers make up that 20%. I don't get the impression the Mets' problem is revenues, or even that there's an attainable figure that would "rescue" them. The issue is that they owe money all over town, man.

Insanely positive "Ticket Revenue" will not provide enough cash to make a dent against Met debt.

[Frayed Knot]

metirish wrote: Is there not any MLB rules that each team needs to abide by to show it can stay solvent?(not sure if that's the proper wording right there). For example several soccer teams in England that went in to bankruptcy got punished with point deductions typically starting the following season , so a team starts - 9 points and can take years to get back in to the top flight, but if they are smart the silly spending that got them there is gone and they build through youth. Of course this wouldn't work here as there is no relegation, instead MLB gives you huge loans.

Each team is supposed to maintain some sort of favorable revenue to debt ratio, or maybe it's value/debt.
The problem, of course, is the same commish's office that makes those rules is also in charge of enforcing them and they've been known to be rather selective in when and if they stick to the letter of their own laws.

[Gwreck]

Ceetar wrote: grain of salt for the source (Craig Carton) But he was apparantly reading something that said the Mets got 80% renewals on season tickets.

That may well be right. Note that that's still net decline, however: as renewals in 2010 were down off 2009 levels.

[Edgy MD]

Ashie62 wrote: John Cougar Lunchbucket wrote: Ceetar wrote: Gwreck wrote: As you mentioned -- the stadium was a ghost town in September, even though tons of tickets had obviously been sold in advance. I think we can safely presume that those numbers will continue to fall (how far, I'm not sure) with each successive crappy season. Package (season/plan) sales will drop a certain amount for 2011 as compared to 2010, and perhaps farther if 2011 is not a successful season. grain of salt for the source (Craig Carton) But he was apparantly reading something that said the Mets got 80% renewals on season tickets. The question is then will new ticket plan buyers make up that 20%. I don't get the impression the Mets' problem is revenues, or even that there's an attainable figure that would "rescue" them. The issue is that they owe money all over town, man. Insanely positive "Ticket Revenue" will not provide enough cash to make a dent against Met debt.

Maybe, but possibly selling off 33% of the franchise and some degree of success will. Success brings all sorts of added revenues, not least of which is better ad renues on SNY. And that will bring new confidence from other potential creditors, if needed.

The game is still in the field.

[Guest John Cougar Lunchbucket]

March 9, 2011 Mets Had Money Trouble Before Lawsuit Was Filed By RICHARD SANDOMIR and KEN BELSON When the owners of the Mets said in late January that they would seek buyers for up to 25 percent of the club, they cited �the air of uncertainty� created by the $1 billion lawsuit brought by Irving H. Picard, the trustee representing the victims of Bernard L. Madoff�s Ponzi scheme. But a look at the team�s financial condition � gleaned from public financial documents and numerous interviews � suggests the team may well have needed the proceeds from selling part of the team regardless of the suit. The reasons in many cases were the result of bad timing and unforeseen circumstances, including an economic downturn that coincided with the opening of the Mets� new stadium in 2009 and a rash of player injuries that sank the team on the field and disillusioned fans. For instance, revenue from about 10,600 club seats and suites and from advertising and concessions dedicated to paying off the Mets� new $800 million home, Citi Field, fell tens of millions of dollars short of forecasts made just two months before the season began in 2009. That was followed by a nearly 20 percent decline in attendance in 2010 and a resulting slide in revenue that was compounded by an increase in stadium bond payments. Fred Wilpon and Saul Katz, the team�s owners, have not been able to tap into the lucrative accounts they held for decades with Madoff, money that Picard has accused them of having used to fuel day-to-day operations, a financing device that evaporated with Madoff�s arrest in 2008. In the late summer, as the 2010 season wound down, those pressures moved the owners to quietly start canvassing friendly potential investors, according to people briefed on these discussions. Without any immediate takers and the team in need of cash, the Mets took the step of asking Major League Baseball for a $25 million loan. This was shortly before Picard filed suit and the true dimensions of his attempt to recover money from the team�s owners were fully understood by Wilpon and Katz. In an interview this week, David Cohen, the chief counsel for the Mets, maintained that the size of the lawsuit was what really motivated the hunt for a partner, not any financial pressures. And while the Mets� owners were looking for buyers in the days before Picard filed his suit on Dec. 7, going public with their search prompted more potential bidders to step forward. �The decision to seek minority investors was not related to any intermittent fluctuations in revenue,� Cohen said. �You operate a baseball team, you expect the ticket sales to go up and down based on team performance.� Announcing that the team was seeking investors was �deemed a more effective way to reach a broader number of interested investors.� But when asked what the owners would do with the money they might make from a sale, Cohen said it would be put into running the team, not pay the owners dividends or be set aside for a possible settlement. �The purpose is to make a positive contribution to the team�s resources,� Cohen said. When the Mets built Citi Field, mostly with tax-free bonds issued by New York City, they anticipated the new ballpark would generate considerably more revenue than Shea Stadium, which the team leased from the city. In February 2009, two months before opening day, the team estimated in a financial disclosure document that Citi Field would generate $224 million � mainly from luxury boxes, parking, club seats and advertising � money that would be more than enough to cover their bond payments. Yet the recession; ticket prices as high as $500, which alienated some longtime fans; and the Mets� fourth-place finish caused revenue in 2009 to come in well short, at $180.4 million, according to audited team financial statements. The way sponsorships are booked accounted for about $7 million of the difference in revenue, but the gap was still large. In the Bronx, the picture was brighter. Revenue dedicated by the Yankees to pay for their new stadium � which had more seats and higher prices than Citi Field � fell from $396.9 million in 2009, when they won the World Series, to $383.9 million in 2010, when they had three fewer home playoff games. Though the figures for 2010 are not yet available, it seems improbable that things went appreciably better for the Mets. They cut ticket prices by as much as 20 percent for the 2010 season, particularly in the highest-priced seats that had been hard to fill, yet wound up drawing nearly 600,000 fewer fans. For 2011, the team has already cut ticket prices another 14 percent. At the same time that ticket sales were slipping last year, the Mets� payments on their tax-free bonds more than doubled, to $43.7 million, from $19.1 million in 2009. Still more is due on $65 million in taxable bonds that had also been used to build the ballpark. The Mets do have several other sources of revenue, including payments from SNY and nonpremium tickets. But if the Mets start the 2011 season poorly, problems could mount. Last year the Mets refinanced hundreds of millions of dollars in loans on the team and SNY, their cable network, and exhausted a $75 million credit line with M.L.B. With the regular season closing in, the Mets have to start issuing paychecks to their players on April 15 and pay their stadium bondholders $22 million in June, the first of two semiannual payments. Moody�s Investors Service downgraded those bonds to junk status last year, and last month the ratings agency cited Picard�s lawsuit as a reason for changing its outlook on the bonds from stable to negative. As the Mets prepare for the new season, their owners continue to solicit interest from potential bidders. Stepping back from Wilpon�s initial comments, the team�s adviser on the sale, Steve Greenberg, said the Mets would consider selling more than 25 percent as long as the owners retain control. About a dozen investment groups have applied to M.L.B. for permission to see the team�s financial records. Baseball is expected to start approving the groups in the next week. But many sports investment bankers say bidders are almost certain to want more than a simple minority stake in the club, particularly if the Mets� finances are in distress, as some bidders suspect. That could lead to protracted negotiations, they said, and delay any financial boost the team hopes to get from the sale.

[batmagadanleadoff]

The Times had been reporting for weeks, that the Mets money problems are entirely independent of the Madoff litigation. With that article, they finally provided some of the details. I wonder who the Times' confidential sources are: persons from among the current candidates of potential buyers ... bankers/lawyers/finance guys or gals who reviewed the books in connection with the Mets recent loan applications?

[ashie62]

The Times is saying the Mets were in financial difficulty after the 2009 books were closed before the Picard suit.

[G-Fafif]

Phil Taylor, SI columnist and (professional niceties aside) Mets fan, thinks we (including he) deserve better.

All baseball fans deserve a spring, that blissful period when they get to dream, however unrealistically, that every question mark about their team will become an exclamation point. Not so for the Mets' faithful, who are preoccupied with worry that any day now we�I mean, they�will pull up to a traffic light and see team executives on the median, holding a cardboard sign: spare a FEW DOLLARS TO HELP SIGN A FREE AGENT? The team's debts are estimated by The Wall Street Journal at $500 million, and that's not counting any obligations from the lawsuit. Wilpon and his son, Jeff, the Mets' chief operating officer, said last season that the Madoff issue would not affect the team's finances, but by October they were acknowledging that they had "a short-term liquidity issue." In November they borrowed a reported $25 million from Major League Baseball to help cover operating costs, and since then, reports the New York Post, they have been pressuring JPMorgan Chase�which led a syndicate of banks that loaned the Mets $430 million last year�for millions of additional dollars to cover basic operating costs.

Not much new ground, but cute the way he reveals his lingering allegiance.

[Edgy MD]

so for the Mets' faithful, who are preoccupied with worry that any day now we�I mean, they�will pull up to a traffic light and see team executives on the median, holding a cardboard sign: spare a FEW DOLLARS TO HELP SIGN A FREE AGENT?

I'm not preoccupied as such.

[Guest The Second Spitter]

Did somebody post the story about MLS buying the minority stake or was it a non-story?
From Rubin's tweets --

Bad credit? No problem. Major League Soccer commissioner still likes Wilpons as prospective soccer owners: http://es.pn/dPoALV #espnst #mets

Mets executive VP Dave Howard on potential MLS interest: "We continue to have interest, but it all is in the exploratory stage."

I guess, having a rival league own part of a team in other league is probably not the best idea for a number of reasons.

[Benjamin Grimm]

I thought it was about the Wilpons buying into soccer, not soccer buying into the Mets.

[Guest The Second Spitter]

WTF? I couldn't have possibly fathomed the Mets had the capacity to buy into an MLS team at this point in time. (Sorry guys, had a big night last night)

[Edgy MD]

There's certainly no point in MLS alienating them. They still have access to a park and ownership of a station. They're down; maybe they'll get back up. Maybe not, but...

MLS has a ridicuously constrictive and probably illegal control on player salaries --- and therefore operating costs.

[Guest The Second Spitter]

True, I think the biggest problem they'll have is convincing the devil-worshipping half of NY to care. Plus the New York Cosmos (version 2k10), also based in Queens, will probably have the edge in the goodwill stakes.

[Benjamin Grimm]

MLB approves groups for Mets bidding Updated Mar 18, 2011 12:42 PM ET Opening day for the sale of a stake in the cash-strapped New York Mets arrived, with Major League Baseball (MLB) approving at least two potential bidding groups, the New York Post reported Friday, citing sources. One group cleared to bid for the Mets was Goldman Sachs' David Heller and Apollo's Marc Spilker, while the other group includes Steve Starker, co-founder of the global trading firm BTIG, and Ken Dichter, co-founder of Marquis Jet, sources said. At least one or two additional bidders were also passed along to the MLB commissioner and could be cleared to bid for the team, sources said. Each of the groups was first vetted by the Mets' investment bank, Allen & Co. The approved suitors were expected to meet next week with Allen & Co., when they would get to see confidential financials of the team and begin the process of deciding whether to actually make an offer. The sale process was expected to be all but complete by June 30. The Mets were seeking a buyer for a minority interest -- at least 25 percent and possibly up to 49 percent -- in the team to raise much-needed cash to pay down debt. Team owners, including majority owner Fred Wilpon and his brother-in-law Saul Katz, lost hundreds of millions in Bernard Madoff's Ponzi scheme and took out loans from banks and the MLB to fund day-to-day activities. The team, which is losing roughly $50 million a year, needs to pay down that debt.

[metsmarathon]

at least we now know that their financial situation won't keep them from doing smart things like dumping bad contracts.

[Guest Spacemans Bong]

The trustee recovering money for Bernard Madoff's victims went on the offensive Friday, alleging in an amended lawsuit that the two New York Mets baseball owners knew all along that Mr. Madoff was a fraud and later hatched a plan to shield their assets from recovery after the decades-long Ponzi scheme was exposed in 2008...

http://online.wsj.com/article/SB10001424052748704608504576208434123268702.html?mod=googlenews_wsjMadoff Trustee: Mets Owners Acted to Shield Team after Ponzi Collapse

If Alderson isn't that guy, Selig needs to step in here and protect the team from its owners for the good of baseball.

[Edgy MD]

Baseball will be fine.

[Willets Point]

Bernie Madoff for Goldman Sachs in a trade of shysters.