Fred Says Money Will Be Available

[MFS62]

But maybe not quite yet.
Adam Rubin/ESPN Yesterday
Fred Wilpon said of the financial troubles that have plagued the Mets over the past few seasons: "It's all in the rearview mirror."
He added that the family's improved financial complexion also is the result of the rebound of real estate, his primary business, as well as stock-market gains and the thriving of SportsNet New York, the television network in which the family owns a majority stake.

"It's all in the rearview mirror," Wilpon said about past financial woes Wednesday after arriving at the team's spring training complex. "... The family is in great shape. The family really is in great shape. Sometimes luck is the residue of design."

Wilpon originally faced a $1 billion lawsuit regarding the Madoff scheme, but the settlement will result in the family ultimately having to pay no more than $60 million.

Wilpon said the payroll, slashed in recent seasons under Alderson, could return to past levels if the team is prudent. The payroll went from a high of $148 million late in Omar Minaya's tenure as general manager to roughly $95 million last year.

Wilpon pointed to bank debt as a primary reason for an un-New York-like payroll in recent years. The Mets have produced four straight losing seasons and have not reached the postseason since 2006.

"It wasn't, as people have written, the reason," Wilpon said about the Madoff issue and payroll slashing. "It was a balance there, because we had to make sure the banks got paid off all of the debt. There's no one in my family -- there's the Katz family, the Wilpon family, kids -- [that now] has any personal bank debt. Zero. Everything has been paid. We don't owe a dollar to anybody. We have mortgages on buildings and stuff like that, but we don't owe a dollar.

On other topics:

� Wilpon said his expectations for the 2013 Mets do not match outside pessimism.

"This team looks like basically a young team with some veterans, and hungry," Wilpon said. "I think Sandy and the staff did a terrific job of getting some real good prospects for the bullpen. ... I'm hopeful and optimistic. The hunger is throughout. And I think we have really good arms. You look at our pitching staff and, on paper, you've got to say they really have a good chance of producing W's. Any of the teams that have surprised people, whether it's Oakland last year -- just go through the last 10 years -- it's pitching that brings it up to that level. So I'm very encouraged about that."

� The Mets do not plan to discuss extending manager Terry Collins' contract until the end of the season, when it is due to expire.

"He's done an excellent job in all respects," Wilpon said. "He handles the public relations side very well. He's honest. You guys believe him. ... I think he knows talent. We will evaluate Terry at the end of the year, not only from where the club lands, but what his overall job was."

� David Wright could be a Met for life. Wright signed an eight-year, $138 million extension in December.

"David is a unique player. He's an All-Star," Wilpon said. "I think David is an All-Star in all things. He's a great person. To me, he's our [Derek] Jeter. And I think you need a core. I don't want to put it all on his shoulders. But he gets it. As far as I was concerned, he was not going anywhere."


Later

[Benjamin Grimm]

The Mets do not plan to discuss extending manager Terry Collins' contract until the end of the season, when it is due to expire.

Good!

David Wright could be a Met for life. Wright signed an eight-year, $138 million extension in December.

Wow! That's news!


Other articles I've read today include Fred's use of the word "zimbo" when describing the real estate market in recent years. "Real estate has gone zimbo."

Hopefully the Mets will move away from their recent zimboness. I know we all want Fred to go away, but it appears he's staying.

[MFS62]

Fred doen't give a specific time frame for that spending. I hope that money isn't like a Unicorn - something we have heard about but will never see.

Later

[bmfc1]

Nice of Fred to say this after the last big money FA has been signed. There's no way of proving what he said until either July, if the Mets are in contention and they add a big salary, or next fall when the FA signing period begins anew.

[Edgy MD]

They can certainly add payroll or invest in the team otherwise before July.

[bmfc1]

Edgy MD wrote: They can certainly add payroll or invest in the team otherwise before July.

How so? By signing Michael Bourn--oh that's right, they didn't. A big trade? A new scoreboard? Maybe they used the new found money designing those neat Mr. Met hats.

[Benjamin Grimm]

The only way they can add significant payroll between now and after the World Series would in fact be through a trade, and that's something that's possible. It's probably more likely in July than in March, but it can happen at any point.

[bmfc1]

BG: I agree--that was one of the two ways I suggested in my earlier post. That's why Fred's statement yesterday was vapid.

[Edgy MD]

bmfc1 wrote: Edgy MD wrote: They can certainly add payroll or invest in the team otherwise before July. How so? By signing Michael Bourn--oh that's right, they didn't. A big trade? A new scoreboard? Maybe they used the new found money designing those neat Mr. Met hats.

Is bitter sarcasm just the only way you address me any more?

Yes, as you acknowledge more politely to Grimm, for some reason, the team can add salary through a trade. That can happen before July.

[Guest John Cougar Lunchbucket]

I barely get riled up anymore by anything Fred says because I understand by now it's all varying degrees of vague bullshit with him every time he opens his mouth. Some of it is sincere, some calculated, some uninformed, and much of it is serving some broader Wilponian purpose (he needs to look like a successful real estate developer, he wants to prove he understands baseball like a true fan, he wants to sell tickets, he wants to look innocent of fraud, he wants to sell a share of the team, he wants what he says to come out in a certain way because of some other thing, etc etc).

I don't for a second doubt much of what he says could be and often is true under the right interpretation or circumstance, but this notion of expecting every remark of his to be a kind of promise is useful only if you want to torture yourself. The only thing you can count on with Fred is that his public pronouncements will get him into some trouble.

[Benjamin Grimm]

I agree. I don't see the value in carefully parsing his words. He says that the Mets will spend competitively? I'm happy to hear it, because it's better than hearing the alternative, but I'll only be convinced that it's true when it happens.

[bmfc1]

Edgy MD wrote: Is bitter sarcasm just the only way you address me any more?

The bitter sarcasm was meant for Fred and all things Fred.

[Edgy MD]

Well, you were directing it at me and I'm really fatigued with being addressed like I'm his surrogate.

[G-Fafif]

As much as we as fans lap up every morsel of Mets pronouncement, I think they'd all do themselves a favor -- Fred, Jeff, Sandy, Terry to a certain extent -- if they'd exercise restraint in talking or, more directly, STFU. I don't mean that as a slap at them. I mean it as a communications strategy. Manage the media message, for crissake. They're no better at it now than they were under Omar or Phillips. Unless their goal is just to be talked about, period. Then it's working.

Only Duquette seemed to understand the value of keeping quiet and getting something done, though I suppose it didn't do him much good in the eyes of his employers.

[Edgy MD]

I don't know much about media strategy, but I find Sandy's highly technical ambiguity to be fascinating. Putting little to no personal stock in any of it, I find that it reads as sort of an Ivy League version of Stengelian doublespeak. He stuffs a bunch of learned polysyllabics into a paragraph that amounts to "It could certainly go this way, but I wouldn't expect that if I were you, because you might find it goes another way. We have a number of very specific things intricately mapped out and might do none of them, which would certainly be the result of a cohesive and comprehensive strategy. Was that helpful to you?"

[Guest John Cougar Lunchbucket]

I heard the whole Sandy-Francessa thing last night. I detected in Sandy a clear whiff of obligation to his appearance on that show (which incidentally began with an announcement that All-Star Six-Packs Are Now Available: Call 507-TIXX). Mike to his credit is Sandy's advocate in making it seem as if that's not the case.

With Fred, I get the sense that inconsistency and disappearing/reappearing accountability is just the way it is with him and he's the one in charge.

[batmagadanleadoff]

But maybe not quite yet. Adam Rubin/ESPN "It's all in the rearview mirror," Wilpon said about past financial woes Wednesday after arriving at the team's spring training complex. "... The family is in great shape. The family really is in great shape. Sometimes luck is the residue of design." [...] There's no one in my family -- there's the Katz family, the Wilpon family, kids -- [that now] has any personal bank debt. Zero. Everything has been paid. We don't owe a dollar to anybody. We have mortgages on buildings and stuff like that, but we don't owe a dollar.

Eff and Jeff Wilpon might not be carrying any personal debt, but the team and SNY still owe a combined $billion.

Mets Owners Are Debt Free But Team And Its Network Owe Over $1 Billion

New York Mets owner Fred Wilpon recently told ESPN that he and his partner, Saul Katz, no longer have any personal debt. But don�t expect the New York Metsto begin spending like a big-market team any time soon. The baseball team and the regional sports network of which it owns 65%, SportsNet New York, have over $1 billion in debt combined, according to sources. The Mets have about $430 million of debt while SNY has near $750 million of debt. Of that $750 million, the owners of the Mets are on the hook for some $450 million, putting their total obligations near $900 million. A phone call and email to the team for confirmation of the debt figures were not returned. With the combined enterprise values of the Mets and SNY around $2 billion, leverage is above 50%. Moreover, the team pays $50 million a year in annual ballpark PILOT bond and rent payments that come from Citi Field�s revenue. Attendance at Citi Field is down significantly the past three years. Standard & Poor�s stated in a December report in which it downgraded Citi Field�s bonds one notch, to two levels below investment grade, �The negative outlook reflects our expectation that the project cash flow will have slight cash flow declines in the near future before it begins to stabilize.� Despite signing David Wright in the off-season to a $138 million extension, the team�s payroll will likely remain in the middle of the league the next few seasons. GM Sandy Alderson has his work cut out.

http://www.forbes.com/sites/mikeozanian/2013/02/14/mets-owners-are-debt-free-but-team-and-its-network-owe-over-1-billion/

[batmagadanleadoff]

Wilpon puts Mets money woes 'in the rear-view mirror,' all evidence to the contrary


By Howard Megdal
4:20 pm Feb. 13, 2013

Wednesday, February 13, 2013 was a landmark day for Fred Wilpon and the New York Mets. After years of crushing debt brought on by the evaporation of their holdings with Bernie Madoff, Wilpon took in the Florida sunshine, smiled, and announced to reporters that the team's financial difficulties were over. "It's all in the rear-view mirror," Wilpon said, after arriving at the team's spring-training complex in Port St. Lucie. "The family is in great shape," he said. "The family really is in great shape. Sometimes luck is the residue of design." This would be great news for Mets fans, who have watched their team decline as the Wilpons' problems ravaged the Mets' payroll. If it were true. Which publicly available evidence suggests it isn't. "It wasn't, as people have written, the reason," Wilpon said about bank debt. "It was a balance there, because we had to make sure the banks got paid off all of the debt. There's no one in my family"�there's the Katz family, the Wilpon family, kids�"[that now] has any personal bank debt. Zero. Everything has been paid. We don't owe a dollar to anybody. We have mortgages on buildings and stuff like that, but we don't owe a dollar." If that's true, it all happened since the beginning of this week. According to public Uniform Commercial Code filings, the following people had outstanding debt as of Monday, February 11, 2013: Fred Wilpon, Saul Katz (Fred's brother-in-law and fellow partner in Sterling Equities), Judith Wilpon (Fred's wife), Richard Wilpon (Fred's brother), The Fred Wilpon Family Trust, The Fred Wilpon 2003 Descendants Trust, and numerous other Wilpon and Katz family members. That's beside the point, really: it is a pair of enormous debts against a pair of Sterling Equities' holdings that have caused ownership to dedicate available resources toward servicing that debt annually, and whose principal is coming due. (The Mets declined to comment on whether Wilpon's comments applied to either of those debts.) U.C.C. filings confirm that the $320 million debt due against the team in June 2014 is an active debt. And Wilpon and his partners already owed $450 million against their 65 percent ownership stake in S.N.Y., due in 2015. Their latest loan, an additional $160 million secured in December, added to that total. For Sterling to be debt-free, Wilpon and his partners, less than two months after borrowing $160 million to help pay, among other things, day-to-day expenses, will have needed to come into possession of more than $900 million to take care of these two debts alone. Merely refinancing, or convincing lenders to push the due date back, wouldn't make them debt-free, according to any reasonable understanding of the term. And that doesn't even take into account the hundreds of millions in total left to pay on bonds issued to finance Citi Field. That total ran the Mets $43.7 million in 2011, at least that in 2012, and remains on the ledger for years to come. Just servicing those three debts cost more than $90 million in 2011, and more than $80 million in 2012. That service cost went down because when the Mets sold their $240 million in minority shares, $110 million went toward paying down the debt against the team, lowering it to the $320 million it currently sits at from $430 million. The rest went toward paying off loans that kept the team afloat ($40 million to Bank of America, $25 million to Major League Baseball), and servicing debt that remained. (This was confirmed by a source familiar with the team's plans at the time.) Accordingly, to perform the same servicing trick once again, the Mets needed that $160 million loan this past winter. Their diminishing ability to pull off that trick each winter is what led Irving Picard, trustee for the Bernie Madoff victims, to give up pursuing money from Wilpon and his partners, which he believed he'd never get, because they simply didn't have it. He would have been in a fight with the Wilpons' creditors. But Wilpon is saying that all the bank debt is now paid off, not just serviced, and not by those hundreds of millions in loans, but by all that money that had previously been spent on the Mets. "That's what made us tight," Wilpon said. "We were still getting revenues. Lots of revenues. But those revenues were going to pay off debt. That's done." Even after supposedly getting rid of the debt, though, Wilpon offered a caveat in terms of the Mets' ability to start increasing their payroll again. "This is, to me, a break-even business," Wilpon said. "I always strive to break even. I'm not looking to make any money. I strive to break even. So if [fans] don't show up, that's hard. So you have to balance it." The Mets lost $70 million in 2011, and then, after slashing payroll from $143 million to $91 million, lost $23 million in 2012. They did so while drawing 2.24 million fans, to watch a 74-win team. Then they added almost no new talent of note this winter, while trading Cy Young Award winner and fan favorite R.A. Dickey. They received some good young prospects in return, but it is highly unlikely that any of those players will materially contribute to a winning team in 2013. Standard and Poor's, when recently lowering the rating on Citi Field debt, estimated the Mets would lose eight percent more money in 2013 than they did in 2012. So while salaries get cleared from the books after 2013, such as the $31 million Johan Santana will earn and the $21 million the Mets still owe Jason Bay (and have publicly said they are counting on 2013 expenditures, though it was deferred), exactly how much of the freed-up money can go to improving the Mets is unclear, given continuing debt service and the reckoning of that $320 million in principal coming due in 2014, and then the well over $450 million due in 2015. It's not like this is the first time Wilpon claimed that everything would be smooth sailing moving forward. That's what he said in the days that followed the revelation of Bernie Madoff's fraud, long before the lawsuit. And that's what he said this time last year, when he made the same claims of solvency, denying any effect of the lawsuit at the start of spring training last season, or after the lawsuit was settled, when Wilpon and others in the Mets organization tried to pin the lack of spending on a lawsuit that, ultimately, won't cost them any money at all until at least 2016. The only way to clear the way for additional spending from Wilpon and his partners is if the debt isn't delayed, but if it just ceases to exist. And that's what Wilpon is suggesting is the case. "I don't know what the market will be at that point," Wilpon said. "But the payroll will be commensurate with anything we've ever done because we can do it. Remember, the people have to come to the ballpark obviously. If you have a competitive team, they will. Everything that was in the past, that you guys saw the pain that we went through, is gone. It's gone." It sure would be nice to think so.

http://www.capitalnewyork.com/article/sports/2013/02/7740844/wilpon-puts-mets-money-woes-rear-view-mirror-all-evidence-contrary

[Frayed Knot]

Oh good, I was waiting to see which side of this issue Medgal came down on.

[ashie62]

In this case I believe Wilpon over Medgal.

In the interview my impression was Sandy saw Bourn as a poor investment rather than something that was unaffordable.

I'm optimistic...

[Guest metsguyinmichigan]

And, for all the talk about not signing a free agent, they did sign Wright to a $100 million+ extension. Just because they did it before he became a free agent doesn't mean they shouldn't get credit for it.

[Gwreck]

I don't disagree, and credit is due for getting the extension done, but I note that keeping Wright is not an increase in annual spending. They were already paying him $15M in 2012.

[batmagadanleadoff]

To tell you the truth, I was so uninterested by the Wright extension, and wouldn't have been half as bothered over Wright leaving as I was over the Dickey fiasco. He'll probably be past his prime and over the hill when the Mets are contenders again. And that's if the Mets are lucky and Wright doesn't blow out his back again next season. Because then, Wright'll be over the hill years before the Mets are contenders again. And that's assuming that the Mets can contend soon enough for the new watered down playoffs, which is no guarantee either. The Mets already got the best of Wright. Now they'll pay top dollar for his worst. My guess is that Wright has, tops, two all star caliber seasons left in his tank. And if so, they'll probably be wasted on a struggling team. Good thing the Mets are'nt into anymore Omaresque Bay/Santana type deals, because I'd bet anything that this new Wright deal will turn out to be more of the same. They signed Wright to avoid another fan revolution, is how I see it.

[Vic Sage]

Hey Batty, not for nuttin' (as they used to say in my old neighborhood), but is there anything the `Pons could do that you wouldn't hang them for? You give them crap for NOT spending (warranted), and now you give them crap for spending.

I despise the current ownership group as much as anybody, and i think Megdal's Javert-like rants are more right than wrong about the current economic situation of the team, but the Wright deal was necessary, and not just from a PR perspective. He's not at the end of his career; he's right in the middle of his prime. Your notion that he has "2 good seasons left" is something you extricated from your rectal orifice. While obviously anybody can go south at any point, he's as likely to be sufficiently productive for at least the next 5 years as he is 2. And the dollars are not at such a level as many other star contracts, particularly with its structured deferments [he definitely gave them a hometown discount in this regard], such that they'll cripple the team when he finally falls off. From a historical perspective, he is their best position player ... EVER. He will soon hold every single offensive team record. It is important that such a player be a lifetime Met and not shown the door at his peak.

And the "Dickey fiasco"? Puleez. They sold high on a guy they picked up off the scrap heap, trading from their only position of strength and depth to get key pieces that will accelerate the rebuild.

Your agenda steers your rationale.

[bmfc1]

Fred made up a new word:
http://bats.blogs.nytimes.com/2013/02/14/things-are-going-zimmo/

[batmagadanleadoff]

Vic Sage wrote: Hey Batty, not for nuttin' (as they used to say in my old neighborhood), but is there anything the `Pons could do that you wouldn't hang them for?

I'll give them credit for mothballing the hideous black drop-shadow pajama tops. Even though they couldnt'a mothballed 'em without first approving them. For fourteen years. An affront to good taste and team tradition. Longest running unis in team history. I don't know what's uglier: the black unis or the Citi Field scoreboards?

Vic Sage wrote: [Wright's]s not at the end of his career; he's right in the middle of his prime. Your notion that he has "2 good seasons left" is something you extricated from your rectal orifice.

You're absolutely right. And if not from my rectal orifice, then perhaps from my eyeballs. Or my earholes. Or my crystal ball. But what else can I go on besides my good hunches? He hasn't been an all-star for most of the last four seasons. That's a long time. And while it's probable that a good deal of Wright's diminished productivity might be attributed to the moronic cavern of a playing field that the moronic owners initially installed, Wright's had some serious injuries in the recent past, the kind that could accelerate the winding of his biological baseball clock. And quite frankly, he faded big time in the second half last season. These aren't positive trends. By the way, I truly hope that I'm dead wrong on this call.

Vic Sage wrote: While obviously anybody can go south at any point, he's as likely to be sufficiently productive for at least the next 5 years as he is 2.

Maybe. But you don't know this for sure. This sounds like it could've come from your rectal orifice.

Vic Sage wrote: And the "Dickey fiasco"? Puleez. They sold high on a guy they picked up off the scrap heap, trading from their only position of strength and depth to get key pieces that will accelerate the rebuild.

The Mets did very well for themselves once they declined to resign Dickey. Still, the development of baseball prospects is always a tenuous business. You know this. If the Mets aren't in a financial crisis, Dickey never gets dealt. Dickey was extremely reasonable in his contract demands and gave the Mets more of a hometown discount than Wright did. And while many point to Dickey's age as a sign that he might have little left in the tank, I'm skeptical, while still recognizing the possibility of a big and near term Dickey fade. When Dickey takes the mound for the Blue Jays in 2013, whether at the beginning or end of the season, he'll never be more than 12 months removed from his Cy Young Award season. So how much diminishment should one expect? He doesn't appear to be a flukish one-year wonder, but rather a pitcher that's reinvented not only himself, but the knuckleball he relies on, throwing the pitch with an accuracy and at a velocity never before matched by anybody in the history of the game. We've seen Cy Young award winners bomb out almost immediately after their award winning season. Vuckovich and Steve Stone come to mind right away. I don't see Dickey as a fluke. He was excellent from the moment he arrived here, and only got better. By the by, that the Mets picked up Dickey off of the scrap heap is irrelevant at this point.

[batmagadanleadoff]

Plus, you know (gag me with a spoon), Wright ain't no Derek Jeter.

[Gwreck]

Want to hear about the Mets finances from someone other than Howard Megdal? No problem, the Post has you covered.

The team is expecting to lose more than $10 million this year, after bleeding red the past two seasons, while attendance is projected to fall for a fifth straight year, The Post has learned.

Also, I found this note interesting:

However, the Mets have paid only some of the $320 million in principal due lenders in 2014, making next year�s talks potentially tense if the Mets do not hit their own not-so-rosy projections, the source said. The Mets declined to comment.

[batmagadanleadoff]

Ponzi schemes. Casinos. And more ponzi schemes. Any day now, they'll send Jeff Wilpon south of the border to strike a deal with the crack cocaine cartels.

[ashie62]

Does anyone in the cartel play the OF?