Feeds:
Posts
Comments

Posts Tagged ‘Fred Wilpon’

Recent times have not been kind to Fred Wilpon.

The last five seasons haven’t been very kind to the Mets. Whether on the field or in the board room, the team has been besieged by a myriad of unfortunate circumstances ever since Carlos Beltran was mesmerized by a Adam Wainwright curve ball to end the 2006 NLCS. Not surprisingly, the Mets’ hardship has led to much ridicule, particularly from the less compassionate segment of the Yankees’ fan base. Despite the dark days still ahead, however, there is every reason to think the Mets could still have the last laugh.

In the three years since Bernie Madoff’s massive securities fraud was uncovered, Fred Wilpon has been desperately trying to maintain his hold on the New York Mets. Despite insisting at the time that the scandal would have no impact on his ownership of the team, subsequent events have proven otherwise. Since that time, which, unfortunately for the Wilpons, coincided with poor play on the field and a corresponding decline in revenue, the current ownership group has relied on debt to remain afloat. According to a recent report in the Daily News, those loans are about to come due.

The team is not for sale, not a piece of it, not a part of it. We are not for sale. We have no reason to sell. We have other money. Just because you guys don’t know how much money we have, we have other money outside of this, from diversity.” – Fred Wilpon, quoted by the New York Times, December 17, 2008

Despite Fred Wilpon’s fervent desire to remain as majority owner of the Mets, the prospect of looming debt payments and even further deflated revenue in 2012 could soon force his hand (while creditors, and perhaps even the commissioner, slowly pry loose his fingers). As Frank McCourt has learned with the Dodgers, the weight of debt can become too much of a burden, especially when the alternative is selling out and making a handsome profit.

(more…)

Advertisements

Read Full Post »

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.

Empty seats at CitiField could spell big trouble for the Wilpons.

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. (more…)

Read Full Post »

The appointment of former New York governor and one-time presidential hopeful Mario Cuomo as a mediator in Sterling Equities’ dispute with Madoff trustee Irving Picard was the first bit of good news for Fred Wilpon in months. On the surface, this move by the bankruptcy court seems to suggest a reigning in of the overzealous Picard, who some reports suggested was looking to claw back over $1 billion from Wilpon and his partners. If a settlement is reached, Sterling will likely escape the process with a bill well below that nuclear figure, thereby improving Wilpon’s chances of holding onto the Mets.

Statue of Jackie Robinson and PeeWee Reese that stands outside Keyspan Park in Brooklyn.

Another positive for Wilpon is Cuomo himself. As governor of New York, Cuomo frequently worked with Wilpon, then a co-owner of the Mets with Nelson Doubleday, on various projects, ranging from the ambitious building of an 80,000 seat municipal stadium (a precursor to CitiField) to the installation of a statue honoring former Brooklyn Dodgers Jackie Robinson and PeeWee Reese (initial plans called for placement in the old Parade Grounds near Prospect Park, but in 2005 the statue was located outside Keyspan Park, the home of the Mets’ single-A affiliate Brooklyn Cyclones). Wilpon may not literally have a friend in Cuomo, but at least he has someone who not only knows him personally, but also understands the complexity of the industries involved in the dispute.

Cuomo is also intimately familiar with baseball. In fact, before going onto a career in politics, the former governor played minor league baseball for the Pittsburgh Pirates. In 1952, Cuomo was signed to a professional contract and played 81 games with the Brunswick Pirates of the Georgia-Florida League. During the season, however, Cuomo was hit in the head with a pitch and suffered a serious injury that effectively ended his pro career.

A Pirate scout, Ed McCarrick, reported that Cuomo ‘could go all the way if he improves his hitting to a respectable batting average’. He added that the young outfielder had ‘plus power,’ was graceful, was a ‘plus’ fielder and a ‘plus’ runner. All he needed was instruction and experience, McCarrick said.” – Joe Browne, Pittsburgh Post-Gazette, July 18, 1984

Would Cuomo have made the majors if not for the beanball? It’s tough to say, but it’s worth noting that McCarrick was one of the first scouts to discover the likes of Sandy Koufax and Carl Yastrzemski, so he did have some understanding of major league talent. What’s more, Cuomo’s signing bonus was $2,000, or almost twice as much as the Yankees paid to Mickey Mantle only a couple of years earlier. Nonetheless, after only batting .244 in the very low minors at the age of 20, it’s hard to imagine he would have progressed to the majors (the only member of the Brunswick team to make the big leagues was Fred Green, who pitched in the 1960 World Series). Still, it’s fun to think about how the world of politics would have been changed if Cuomo went on to play for Pittsburgh instead of attending law school at St. John’s.

Cuomo (left) receives a baseball trophy.

Almost 60 years after ending his brief playing career, Cuomo has finally made the big leagues…at least as it pertains to the financial dealings of a major league baseball team. Meanwhile, his son Andrew now sits in the same governor’s mansion where he resided for 12 years. During that tenure (1983-1994), the Mets enjoyed their most successful run in franchise history, so maybe Cuomo’s presence as mediator will be the first step in helping the embattled franchise from Queens turn its fortunes around? First things first, however, and before that can happen, Wilpon has to hope he can avoid losing his.

Read Full Post »

(In addition to appearing at The Captain’s Blog, this post is also being syndicated at TheYankeeU.)

After months of denial, the New York Mets finally admitted to a popular suspicion: the team’s finances have been materially impacted by its ownership group’s involvement in the Bernie Madoff investment scandal.

Fred Wilpon's ownership of the Mets could be derailed by his involvement in the Bernie Madoff investment scandal.

Ironically, however, the impact isn’t a result of how much money was lost, but how much was gained by investment companies like Sterling Equities that are controlled by owner Fred Wilpon and partner Saul Katz. At the same time Madoff defrauded others out of approximately $20 billion, Sterling and a myriad of other Wilpon-related entities are believed to have netted well into the hundreds of millions. What might seem like good fortune to some is, in reality, a very sticky situation for Wilpon and his business partners. Why? Because Irving H. Picard, the trustee appointed to fairly distribute remaining and recovered assets, has filed a lawsuit to recoup the ill-gotten gains. In addition to the over $300 million in profits that Wilpon’s holdings are alleged to have received, a New York Times report recently stated that Picard could seek close to $1 billion if it is determined that the companies’ conduct contributed to the fraud in any way.

Although the $1 billion figure seems fanciful, the $300 million number is probably a pretty good ballpark figure. If you take 25% (the approximate percentage in the team the Mets are interested in selling) of Forbes’ $858 million valuation of the ballclub, you get just over $200 million. So, based on this piece of circumstantial evidence, it seems as if the sale is intended to meet the lawsuit’s potentially substantial obligations. In the meantime, the named defendants have petitioned a judge to prevent the terms of Picard’s lawsuit from being made public.

Despite the dire circumstances faced by the Wilpons and their investment partners, the ownership group has maintained that there shouldn’t be any adverse impact on the day-to-day operations of the Mets. The team’s current round of cost cutting would seem to dispute that contention, but the poor state of the franchise would probably dictate a pull back anyway. However, Commissioner Bud Selig is concerned enough about the situation to have called Wilpon onto the carpet to discuss the Mets’ finances. Interestingly, this isn’t the first time Selig has injected himself into the Mets’ affairs. According to new GM Sandy Alderson, it was only with Selig’s “urging” that he decided to pursue the Mets’ opening in the first place. Considering all that has unfolded, one wonders if Alderson wouldn’t like to have his own private meeting with the Commissioner?

While the Mets sort through their financial woes, the outlook on the field is not much better. Barring unexpected production throughout the roster, the Mets are poised for at least one or two years of rebuilding. As a result, the financial impact of more losing seasons, combined with the Madoff fallout, could effectively spell the end of the Wilpon family’s majority ownership of the Mets. Regardless, an even bigger concern is the possibility that the team’s brand could suffer a longer lasting blow that would tuck it away even further into the Yankees’ shadow.

Mets, Yankees Average Game Attendance, 1962-2010

Source: Baseball-reference.com

Even when the Mets were brand new, they didn’t have to take a backseat to the Yankees. New York had first been a National League town, so there were thousands of former Dodger and Giant fans just waiting to embrace a new team in the senior circuit. As a result, by 1964, the upstart Mets managed to outdraw the four-time defending A.L. champion Yankees. Since that time, however, the Mets have seemed to be vulnerable to wild attendance fluctuations that usually coincide with their performance on the field. In that respect, the Mets are really no different from most teams, except, of course, for the added disadvantage of sharing the market with the Yankees.

(more…)

Read Full Post »