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

[ashie62]

Per CBS...this can't be good.

http://www.cbssports.com/mlb/story/14829244/madoff-probe-filing-says-mets-got-interestfree-loans

[batmagadanleadoff]

Mets' SNY Partners Likely to Balk at Deal

Executives at Time Warner Cable Inc. and Comcast Corp. would be unlikely to allow the owners of the New York Mets to sell part of their stake in the jointly owned regional cable channel Sportsnet New York, according to people familiar with the executives' thinking.... People who have reviewed the ownership agreement for the channel said both minority stakeholders can block any sale of part of the network to a competitor and have the right to buy any shares of the network the Mets owners want to make available to an outside investor. The cable companies would be reluctant to pass up an opportunity to increase their ownership in the channel because it is profitable, the people say. Regional sports networks play a large role in both companies' businesses.

What goes around, comes around when it's a right of first refusal clause that might ultimately sink the Wilpons. It look like these **********s are starring in their own Greek tragedy -- The House of Wilpon -- with enough hubris and arrogance to fill an underclassman's entire college syllabus.

[Edgy MD]

Their money is as good as anyone else's.

[batmagadanleadoff]

Wilpon's money probably is everybody else's.

[Edgy MD]

Yeah, I guess this is one of those days I don't know what you're getting at.

[ashie62]

Edgy DC wrote: Yeah, I guess this is one of those days I don't know what you're getting at.

Don't sweat it, confusion abounds.

[Guest John Cougar Lunchbucket]

LOLKatz, from the Post.

Katz's take sign By JOSH KOSMAN Last Updated: 1:32 AM, March 20, 2011 Posted: 10:43 PM, March 19, 2011 To many who know him, Saul Katz, co-founder of Sterling Equities and co-owner of the New York Mets, comes off as an arrogant, self-important man who will repeatedly tell you he is a certified public accountant. To Irving Picard, who represents the Madoff victims, Katz is the brains behind Sterling's investment portfolio and business operations, it was alleged in an amended complaint filing on Friday. And yet despite his insistence that he was an investment pro, Katz claims to sources he had no knowledge that Bernie Madoff was running a Ponzi scheme. In the filing, Picard also alleges that Ivy Asset Management told Katz within the last six years it had redeemed all its Madoff investments over concerns about the funds. Picard goes on to charge that Katz, who lives in a posh enclave overlooking Long Island Sound, took disbursements from Madoff funds of over $120 million in just the last six years. Katz's three sons, who work for Sterling Equities, snared even greater returns by withdrawing more than $237 million over the same period. Since 2002, Sterling has co-owned the now cash-strapped New York Mets. Although Sterling co-owners Fred and Jeff Wilpon get all the headlines, it is 72-year-old Katz who was in charge of all the finances and invested much of them with Madoff. Picard, in his filing, asserts that in total Sterling executives received $300 million in net gains, and that the firm is not entitled to the $700 million it withdrew from the Madoff funds from December 2002 until December 2008, because, after receiving several warnings, it should have known Madoff ran a Ponzi scheme. The suit is looking to claw back $1 billion from the Sterling management team. Several sources who know the Brooklyn College grad seem to be rooting for his fall, in contrast to his partner, Fred Wilpon, who has generated more sympathy. Katz married Wilpon's sister, Iris, more than 50 years ago and in 1972 went into business with Fred. Neighbors describe the 5-foot-10-inch, slightly overweight Katz as "nasty" and very self-assured. He lives in an English Tudor mansion on 12 acres in the very exclu sive North Colony en clave in Glen Cove, LI. "He tried to block off the road with a gate [that is on his prop erty]," leading to the beach, a fellow resident in the development said, "and give resi dents keys to the gate." "It's a communal road," the resident complained. Relenting to com munity pressure, Katz now leaves the gate open. "It's uncomfort able," the resident said. "You have the impression you are trespassing." His son and daughter live in separate nearby homes in the tony suburb. Glen Cove Mayor Ralph Suozzi countered that he sees a different side to Katz, whose wife runs the homeowners association. "He gives scholarships to first responders' children," he said.

[Edgy MD]

Somebody's being hurled busward.

[Guest LeiterWagnerFasterStrongr]

Somebody's being hurled busward by somebody else who hates opening gates.

(If you're going to paint a guy as the Mets' Cheney, and you're bringing character testimony into it, give me something. Like, a he-sued-my-cancer-ridden-mother-over-a-property-line-traversing-rose-bush, or he-set-up-front-lawn-bear-traps-for-my-Girl-Scout-troop-during-cookie-hawking-season ... something.

[Edgy MD]

He's 5'10"' and slightly overweight, for God's sake! What more do you need?!

Yeah, I meant to edit that post, but what's interesting about that article is trying to figure out who is doing the hurling. Any number of folks could have motivation to feed the author that story, but it sure looks to have been fed. Kosman is supposedly a real financial reporter and stuff, but this is of Page Six gossipmongering.

"Why?" I ask. And "Who?"

[Guest John Cougar Lunchbucket]

Part of it are the papers all working hard for a unique angle on this story. The Times got the Trustee, the Snooze has been the Wilpon's mouthpiece, particularly Lupica. Anyway, I don't doubt for a second that Katz was at best willfully ignorant of what was happening wrt Madoff.

[ashie62]

That Bastard Katz!

[batmagadanleadoff]

Lots of financial stuff released today:

Valuations on all MLB teams; Forbes lowers Mets value to $747M; MLB facing a financial crisis...

http://blogs.forbes.com/monteburke/2011/03/23/special-report-inside-baseballs-debt-disaster/

http://content.usatoday.com/communities/dailypitch/post/2011/03/forbes-franchise-values-mets-madoff-yankees-dodgers/1

[metirish]

Grim reading in the forbes bit....Jesus

[Edgy MD]

Gotta love the Google ads on the side of that Forbes article:

Get Out of Debt Instantly Drowing in Payday Loans? Hit the Ball with Power Tired of Being in Debt?

[batmagadanleadoff]

metirish wrote: Grim reading in the forbes bit....Jesus

The Mets owe about $450M. Quick and dirty math: If you deduct the $450M debt from the Mets worth ($858M- yesterday's estimate or $747M - today's updated Forbes valuation, either one) -- then the $250M that the Mets are looking for from a prospective investor should buy a controlling interest in the team. That's what a buyer would argue. Today's reduced valuation can't help the Mets -- not that a sophisticated buyer with access to the books couldn't figure out for him or herself.

[batmagadanleadoff]

The Mets originally wanted to sell only 25% of the team. With $450 million of debt, it seems the Mets would be lucky to get even a modest $75 million for that stake, especially considering the discount often applied in sales of minority holdings. Wilpon and Katz have publicly conceded they may need to sell more than a quarter of the Mets, but they insist on maintaining a controlling share. Bankers are drawing up some creative solutions. Still, the math does not look good.

From the Forbes piece.

[Edgy MD]

I think you're thinking with your heart there. The team the Pons control through the credit of lendors is still theirs until they default.

Anybody who comes and buys $250 million worth of the Mets isn't likely to pay them out of pocket but likely will likely rely on creditors also.

[batmagadanleadoff]

Could be. There's lotsa ways to value an MLB franchise and most of the methods are probably way over my head.

[Guest The Second Spitter]

$50M in the red in 2010

The Mets, long one of baseball�s most highly valued franchises, have lost millions of dollars in recent years, including nearly $50 million in 2010, according to two people briefed on the team�s finances. The team�s losses � projected to hit another $50 million or more this season based on factors including advance ticket sales � come with a range of implications for its owners, who are trying to sell a portion of the club, and for major league teams that rely on the Mets to share revenue with them.

[Valadius]

This is what happens when you build a SMALLER ballpark than the last one in the biggest city in the country.

[Benjamin Grimm]

It's not like they were selling out that smaller ballpark.

[Guest The Second Spitter]

Yeah, the Wilpons sure hope it was the smaller ballpark and not another reason.

[Frayed Knot]

Part of Jeff Wilpon's explanation for the smaller park is that those 'extra' 5-10,000 seats are always the most expensive ones to build and wind up giving you the least return on the money.
I happen to think they [u:8cgxjnkn]under[/u:8cgxjnkn]-built the thing too but, as events are turning out, had they gone for a larger one they'd probably be in even deeper debt right now.

[Ceetar]

Frayed Knot wrote: Part of Jeff Wilpon's explanation for the smaller park is that those 'extra' 5-10,000 seats are always the most expensive ones to build and wind up giving you the least return on the money. I happen to think they under-built the thing too but, as events are turning out, had they gone for a larger one they'd probably be in even deeper debt right now.

And some say that teams actually lose money operating the upper decks, when they're not sold out. Electricity and upkeep and vendors and all that.

I'd personally wished they'd have made the thing bigger. go 60k. pack the place in. would make those big games all the louder and screamier. of course they opted for a closeness with all the other seats, and if they added 15k they'd be practically in downtown flushing.

[metirish]

And sales of what are known as full-season equivalents � a mix of small and large season-ticket packages � are projected to top out at 10,000 this year, less than half the total sold just two years ago. Without any major player signings after last season�s 79-83 record, there might not be much for fans to root for.

this is a real killer for teams right?



that seems like such a small amount of packages sold for a team with the Mets fanbase.

[Methead]

Frayed Knot wrote: Part of Jeff Wilpon's explanation for the smaller park is that those 'extra' 5-10,000 seats are always the most expensive ones to build and wind up giving you the least return on the money.

Not if you make it to the playoffs.

[batmagadanleadoff]

Benjamin Grimm wrote: It's not like they were selling out that smaller ballpark.

Maybe it's the pricing. Close to $200 average to sit in an infield box seat; $60 bucks to sit in the equivalent of Shea's loge near the foul pole. Many of the worst seats at CF are more expensive than Shea's priciest. Maybe fans bit the bullet in 2009 when Citi Field was brand new. I don't know. The Mets have every right to get as much money for tickets as the market will bear but there's too many empty seats in the prime seating areas, as far as I can see.

[Benjamin Grimm]

I agree. I don't think they've priced the ballpark correctly. Maybe this year's prices make more sense. I don't know, I haven't really looked at the prices yet for this season.

[Edgy MD]

Mis-estimating the market for high-end seats and other prices down the line is certainly worthy to consider as a factor in the team's profitability --- moreso, I'm certain, than the size of the park. I think the main factor is that they invested a lot of money in the team and have still failed to win very much.

I'm not going to pretend to be schooled in marketing, but clearly if that changes, demand changes, and the whole dynamic of the market changes.