Madoff's Curveball" by Jeffrey Toobin & other Wilpon stories

[Edgy MD]

Well, I don't think the suggestion is/was that hey were losing $70 million every year, but only that things had come to a head in the post-2008 period with success not forthcoming, the recession, and the persistence of contracts that were signed without recession-minded caution.

The cutting salary by $50 million (or whatever) could go a long way toward making up that deficit. So could cutting staff and operations. I feel confident that they are looking pretty secure in their ownership right now.

[Ceetar]

Average ticket price for 2011 is listed at 31.81. multiply that by attendance and you get $75,661,643.69. Payroll was at ~142.. That's like 70mill right there.

Of course, it doesn't include operating costs and other employees, Bonilla, etc. But it also doesn't include concessions, parking, advertising, naming rights or SNY money.

[TransMonk]

What does the amount matter? If they're losing money, they're losing money whether it's $1 million, $70 million or $300 million per year. The point remains that if they're not making money over the next 3 years (which it doesn't seem to me that they will), then all this settlement does is postpone the inevitable to an even further date of when money that they are not going to have will be due.

I'm sure the Wilpons are pleased. It gives them a little more time to pray for that miracle. And, hey, anything's possible. But, from where I'm sitting, I think this settlement may have pushed the timeline for being genuinely competitive that much further out.

[Edgy MD]

The post-settlement reports seem to suggest that the family does still have money, and expects to gain more from their suits.

And operating as lean as they are, I think there's valid reason to think the team won't keep losing money, although how that shakes out remains to be seen.

[Ceetar]

yes, but if that 70 million number is as exaggerated as it sounds, simply cutting payroll 40 million and having the same record may actually make them money this year. Then, even if they were still cash-strapped themselves, the Mets have money to pay their own bills, factored in with the expected arrival of some of those pitching prospects, and any boost they may get via season tickets for the All-Star game, and suddenly they're seeing expected revenue a little higher, and it's looking rosy again.

[Vic Sage]

oh, don't get me wrong. I'd have rather the wilpons lost the suit in overwhelming fashion, forcing them either into bankruptcy or a forced sale of the franchise.

but don't minimize this outcome. They didn't just kick the can further down the street. They've not only bought themselves time, they agreed to an amount that could be completely offset by their own claims against madoff. Also, by quantifying and finalizing the obligation (so its not this unknown liability hanging over their heads), they've made further financing (including loans and minority sales) a more realistic possibility. Meanwhile, they'll be getting out from under the last regime's big money deals while surely preventing Alderson from entering into (or extending) any new ones.

So all it will take to turn their current financial situation around is to eventually win more than they lose, which if you read this website, is an imminent possibility. At any rate, they've cut the payroll to a point where they are likely to at least breakeven and, if the kiddie brigade develops into any late season runs or post-season heroics, they'll be well into profitability.

[ashie62]

Let the long term signings begin!

[Guest John Cougar Lunchbucket]

Word is they closed on 12 $20M shares and paid back Bud Selig and Bank of America. WSJ says Steve Cohen is one buyer.

[metirish]

No mugs this lot are they?, looking pretty good now with pushing Einhorn aside.

[batmagadanleadoff]

effWilpon sez:

Mets' payroll decrease has not been due to his ongoing Bernard Madoff litigation, but to a desire to transform the organization's baseball-operations philosophy. "I was tired of throwing money at something and not getting success," Wilpon said.

Hey! Make up your mind. So now the $90M payroll is the result of your newfound thrifty philosophy. Last week, the payroll size was all on Sandy. Whatever Sandy wanted. The crushing debts saddling the Mets were irrelevant. If Sandy wanted a $200M payroll, the Mets would have a $200M payroll.

also sez that Wright's future is entirely in Alderson's hands:

In a rare 22-minute interview at the Mets' Spring Training complex, Wilpon put third baseman David Wright's future in general manager Sandy Alderson's hands, saying that it will be up to Alderson to decide whether to keep Wright in Flushing long term.

If effWilpon is already absolving himself of any involvement should one of the Mets all-time most popular players be traded, this probably means Wright's a goner. Sandy insisted.

http://mlb.mlb.com/news/article.jsp?ymd=20120227&content_id=26875620&vkey=news_mlb&c_id=mlb

[Guest The Second Spitter]

Right Said Fred wrote: Mets' payroll decrease has not been due to his ongoing Bernard Madoff litigation, but to a desire to transform the organization's baseball-operations philosophy. "I was tired of throwing money at something and not getting success,.

[Edgy MD]

Megdal sticks to his tune, at least in his lede.

[MFS62]

The Second Spitter wrote: "I was tired of throwing money at something and not getting success,"

Sounds like Freddy's gonna party like it's $19.99.

Later

[duan]

I have no problem with the Mets suggesting they can't operate at a $70 million dollar a season deficit.
However I have a huge problem with the fact that the nature of that deficit is masked by SNY's ability to make profits on the usage of the Mets games at what may be a below market price deal.
Until someone tells me how much the Mets are getting paid for their games and does a objective analysis of where that might lie vs the probable return in a competitive market I don't buy the 70 million.

A good comp of the market value might be the Angels - who're getting $3 billion over 20 years.

"The Angels have agreed to a new deal with Fox Sports worth at least $3 billion and expected to cover 20 years, two parties familiar with the deal said Thursday. The parties declined to be identified because the deal has yet to be officially announced."
http://articles.latimes.com/2011/dec/08/sports/la-sp-angels-fox-tv-20111209

For revenue sharing purposes it behoves the Mets to 'lessen' the value of their deal with SNY too.

"The trouble, MLB executives and club officials say, is trying to determine the actual value of the equity rights owned by teams. The Yankees say their TV rights are worth about $85 million to $90 million a year from YES, while the Red Sox insist their TV rights from NESN are worth less. The less money declared by the two giants, the less that goes into the revenue-sharing pool, which was about $400million last year, Selig said."

http://www.usatoday.com/SPORTS/usaedition/2012-02-10-MLB-TV-cover-0210_CV_U.htm

The only value I can get re the SNY contract is the below - meaning that to my mind anyway, the Mets are selling their TV rights at a minimum of $30-40 million discount in return for the equity that Wilpon & Katz get in SNY - therefore the real year to year loss is more like 30-40 million. Indeed the current cuts of $52 million in payroll would equate to them turning a profit, subject to all other revenues remaining the same.

http://www.nytimes.com/2011/12/04/sports/baseball/bankrupt-dodgers-will-benefit-from-robust-tv-marketplace.html

"So much has changed in the sports marketplace since 2001. The price of sports rights, nationally and locally, has soared. Teams like the Yankees, the Mets, the Cubs, the White Sox and the Giants own parts of the networks that televise their games. YES is paying the Yankees about $80 million a year. SNY sends the Mets $60 million to $70 million annually, about what NESN pays the Red Sox. In 2013, the Astros will start receiving an average $80 million a year from a new channel they and the N.B.A.�s Rockets will own with Comcast."

[batmagadanleadoff]

Picard determined that the Mets/Sterling were so money strapped that they would've been unable to pay any large verdict; hence the settlement. Great. IOW, Sterling's financial mess might, counter-intuitively, prevent them from losing the Mets.

Trustee Says the Mets� Owners Had a Limited Ability to Pay By RICHARD SANDOMIR Published: April 14, 2012 Nearly a month ago, the owners of the Mets avoided a jury trial by agreeing to pay $162 million to the trustee for the victims of Bernard L. Madoff�s fraud. More than a year of acrimony ended the day the trial was supposed to begin. To get the settlement, the trustee, Irving H. Picard, dropped his central claim: that the Mets� owners, Fred Wilpon and Saul Katz, willfully ignored warnings about Madoff during their years of investing with him. On Friday night, Picard revealed � with some hindsight and a look at financial information provided since the settlement by Wilpon and Katz � that it would have been difficult to quickly recover more than $162 million. In a court filing, Picard wrote that �the defendants� cash flow and lender covenants would not have enabled me to recover more� if he had won at trial. Picard did not offer any details of Wilpon and Katz�s finances, but the implication is that they were hamstrung by loans and did not have enough money on hand to pay as much as $303 million, the maximum payment they faced if they lost at trial. Wilpon and Katz may not have to pay any part of the $162 million in so-called fictitious profits that they received from Madoff accounts described as net winners by Picard. But other accounts were net losers, entitling the owners to be reimbursed for $178 million from Picard�s cash recoveries. That is to be applied to pay the settlement. The more Picard recovers � the figure is currently at $9 billion � the less Wilpon and Katz pay. In another filing, Picard described the pragmatic method behind recovering the money. �With the collectability of a favorable judgment in doubt,� Picard said, he found a way to recover money from Wilpon and Katz that is not based wholly on their financial resources, �but rather on the trustee�s own ability to maximize� the size of the fund that is being used to pay Madoff�s defrauded customers. If Picard�s recoveries do not yield $162 million after three years, Wilpon and Katz have guaranteed that they will pay as much as $29 million. Picard did not say which documents he examined in Wilpon and Katz�s business empire, which includes real estate, a hedge fund and other investments. The Mets, the most public of their holdings, have been under a financial strain. They lost $121 million the last two seasons, have had attendance tumble at Citi Field, needed loans from Major League Baseball and Bank of America to help their sagging finances, and slashed their player payroll this season by $50 million. The settlement gave them financial relief, as did $240 million raised by selling limited shares in the team. The proceeds were used to repay the M.L.B. and Bank of America loans and some of the team�s other debt, as much as $400 million, with other banks.

http://www.nytimes.com/2012/04/15/sports/baseball/trustee-in-madoff-fraud-says-mets-owners-had-limited-ability-to-pay.html

[metirish]

To answer my own wtf , Mets announce Bill Maher as a new limited partner, at the field tonight meeting and greeting.

[metirish]

NEW YORK � No joke: Bill Maher has bought a minority ownership stake in the Mets. In a surprise announcement made by the comedian and political commentator before Sunday night's game against the Cardinals, Maher said that he purchased one of the reported 12 minority stakes available to investors over the winter. "First of all, I think it's a great investment," Maher said. "People sometimes forget that there's only one National League franchise in New York City and they're not making anymore. I'm a Met fan my whole life and I think it would be a great place." Neither Maher nor Mets officials would comment on the percentage of his ownership piece or how much he paid for it. The 56-year old Maher � who was raised in River Vale � said that he never intended to buy a piece of a sports franchise. That changed after seeing newspaper stories about the Wilpon family offering up minority ownership portions of the team due to the Mets debt, as a result of their associations with jailed Ponzi scheme orchestrator, Bernard Madoff. Maher, who lives in Los Angeles, began to become interested in purchasing a piece of his favorite baseball club. "It happened months ago," Maher said of the deal. "It's the first time I've been in New York, so we didn't say anything. But I read about it in the paper in December saying the Mets were available � that you could buy these limited partnerships." Mets Senior Vice President of Marketing and Communications, David Newman, said that Maher official title will be "New Partner." "I'm just a fan," Maher insisted. "I'm not going to get involved. I think my role is going to be bringing luck to the team � they didn't have a no-hitter for 50 years, I buy in and I come to town and there's a no-hitter. Draw your own conclusions." Brendan Prunty: bprunty@starledger.com

[bmfc1]

Bill Maher says "hello" to Mets fans:
http://www.twitvid.com/3TOYJ

[ashie62]

I love Bill Maher...like trichinosis

[Benjamin Grimm]

I'm a fan. He's my favorite Mets owner!

[TransMonk]

Pictures of him hanging out in his luxury box and watching BP with Jeffy on Maher's Facebook page.

[Guest metsguyinmichigan]

So, does he get his photo in the yearbook?

[ashie62]

metsguyinmichigan wrote: So, does he get his photo in the yearbook?

Sure.

[TransMonk]

I'd like to see him have Mr. Met as a panelist on his HBO show. Now that he's a minority owner, he has unlimited access to Mr. Met, right?

[metirish]

saw this the other day, just to keep things current

NEW YORK (AP) � The New York Mets say that 1-800-Flowers founder Jim McCann has purchased a minority stake in the team. The team has been selling limited partner shares for $20 million each. Comedian and TV host Bill Maher bought one, too. The Mets' owners sought to raise cash after they were sued by the trustee seeking to recover money for victims of the Bernard Madoff Ponzi scheme. In March, Mets owners Fred Wilpon and Saul Katz reached an agreement with the trustee for Madoff's fraud victims, averting a high-profile civil trial.

[MFS62]

He's a good guy.
I met him several times. The company I worked for helped turn his business from a 2 man flower shop to the company it is today by providing them with the consulting and technology to build their first call center and offer their products on the Internet. We then helped them expand to multiple centers around the country.

Later