The news for the Mets keeps getting worse. Although most people expected a steady stream of pessimism to emanate from between the white lines, it’s really the organization’s bottom line that has been the greatest cause for concern.
By now, everyone should be familiar with Fred Wilpon’s entanglement in Bernie Madoff’s massive financial fraud, but lately even more distressing news has emerged. Earlier in the week, it was revealed that the Mets received a $25 million loan from Major League Baseball. Although such a transaction is not unprecedented, tapping into the central fund usually presages rougher times ahead (and sometimes an eventual sale). In the Mets’ case, we know the Wilpons followed up the November loan with the intention to sell a minority stake in the team. Since that announcement, no news of an impending sale has emerged, so if the Mets can’t take on a new partner soon, liquidity could continue to be an issue.
Compounding the Mets’ financial problems is interest in the team continues to wane. Despite opening brand new CitiField in 2009, attendance has declined thanks to two sub-.500 finishes. Unfortunately for the Mets, debt payments don’t abate when attendance does, and according to early reports, 2011 could see an even greater attendance decline. In an effort to reverse this trend, the Mets have not only enacted significant ticket discounts, but also revamped its ticket operations, including hiring a new head of sales. Of course, the 25-men on the active roster are the ones who really sell tickets, and it doesn’t seem as if reinforcements are on the way.
Financial empires can collapse over night, especially when they are constructed like a house of cards. Moving money from one entity to another works well when cash is plenty, but once liquidity dries up so does the organization’s financial health. The Wilpons are finding this out the hard way. According to several reports, including the lawsuit filed by Madoff trustee Irving H. Piccard, the Wilpons have used their other businesses to support the Mets, a lifeline that is now being cut off by their current financial predicament. Without the ability to fund the team’s operations from its own revenue, the Wilpons and their partners may have no choice but to sell out completely.
Adding insult to injury from a Mets’ point of view is the massive shadow being cast by the cross-town Yankees. Not only has the team enjoyed great fortune on the field (i.e., playoffs every year but 2008 since 1995, not to mention five championships and seven pennants in that span), but it continues to make one off it. Upon his passing, former Yankees’ principal owner George M. Steinbrenner was lauded greatly for the triumphs he helped the Yankees achieve on the diamond, but his best work was done in the boardroom.
The legend of how the Boss turned a less than $1 million investment into a billion dollar empire has been well documented, but the revitalization of the Yankees’ brand under Steinbrenner can not be overstated. From the time he took over the team in 1973 until the waning years of his ownership, Steinbrenner transformed the franchise from one that had fallen on hard financial times to a billion-dollar behemoth that has not only been able to fund its own growth and expansion, but also generated enough revenue to help the rest of the league do the same.
Like any great empire, the Yankees weren’t built over night, nor constructed by one man. Most recently, guys like Leo Hindery, Lonn Trost, and Randy Levine have all played very important roles in building the Yankees’ financial machine. Although these men are often overlooked when plaudits are handed out (and in Levine’s case, unwarranted harsh criticisms usually come instead), they all deserve significant credit for the team’s current success. Without the Boss’ leadership and the hard work of so many others, the Yankees would not be the Yankees. And who knows…they might be the Mets?
New York is a baseball town. Perhaps more than any other city in the country, the great American pastime still dwarfs all other sports. That’s good news for the Mets. When they finally get their financial house in order and put a winning team on the field, people will pack CitiField. In the meantime, however, the team runs the risk of financial insolvency and baseball irrelevancy. The franchise will surely survive this dark period, but it’s looking more and more likely that the Wilpons will not.