Last week, we posted about reports that next year, the Mets would start paying Bobby Bonilla $1.1M a year
for 25 years.
Loge13 reader Mike commented:"And, while the grand total may seem absurd, the fact is we're paying
Bonilla a little more than $1 million a season. $1 million a season
shouldn't cripple this team, shouldn't prevent us from signing/trading
for anybody we really want to acquire. If it does, the Wilpons are in
worse shape than we thought."
According to the NY Post, the Wilpons may indeed be in worse shape than we thought.
Ron Hunt flagged this item
from the Sunday NY Post business section. The Wilpons/Madoff connection inspired many similar rumors not too long ago. This item expands on that and wraps up all the reasons why the Wilpons might be in trouble. The sourcing is not strong so judge for yourselves.
Everybody knew the Brooklyn Dodgers as "Dem Bums," but the Mets?
Investment bankers who sell sports teams believe the Amazin's owners,
the Wilpon family, are so cash-strapped that they will have to sell the
Flushing franchise if the team has a losing season or two and attendance
There is growing evidence that the owners are in
serious need of dough, and the team -- saddled with roughly $700 million
in debt -- is not turning a profit.
* Fred Wilpon, whose
family owns most of the team, took a second mortgage on the team,
refinancing roughly $375 million in loans, with $75 million of that
going to the Wilpons themselves, said a source with direct knowledge of
* Speculation is that the Wilpons lost hundreds
of millions in the Bernard Madoff swindle and needed liquidity.
"The family is no longer a bottomless pit," said a second source with
direct knowledge of the team's finances.
Besides the Madoff
investment, the Wilpons' primary business is commercial real estate,
which has suffered through the past three years.
* The Mets
franchise is losing roughly $10 million a year, including depreciation
and interest payments, sources said.
* Attendance at Citi Field
is on pace to be 2.6 million this year, 19 percent less than its debut
year in 2009 and 35 percent less than the team's last season at Shea
* Standard & Poor's has rated the bonds issued to
finance Citi Field as junk, below investment grade.
* If the
Mets were a public company, one analyst who knows the team's financials
said, their rating would also be junk grade because of their enormous
* Fred, son Jeff and other Wilpons own the SportsNet
New York, or SNY television channel, and it is profitable, but owes
money equal to roughly six times its earnings before interest, the first
"It is leveraged right at the maximum" that could
be done, he said.
Experts told The Post that the Wilpons don't
want to sell.
"They are planning to rebuild their wealth
through SNY, and in five to seven years, you'll see recovery for the
family," said a source with knowledge of their financials.
might be easier said then done.
"If the Mets become a mediocre
team, you wonder if the team is sustainable at their debt levels," said
a sports investment banker. "That $10 million loss could become $20
Everything hinges on the success of the Mets,
who, as of Friday, owned a 44-35 record, the fourth best in the National
League. The team also has the third-highest player payroll in the
league, at $136 million, but only the sixth-highest NL attendance.
The money crunch is not helpful at this pivotal point, when the Mets
are playing well and the mid-season trading deadline approaches.
Many observers say the team could use a star pitcher for a pennant
run, but getting that player would entail piling up more payroll and
operating losses. One of the team's debt covenants states that payroll
cannot increase, sources said.
SportsNet only televises Mets
games, while competitor MSG has the Knicks, Rangers, Devils and
Islanders, and the YES Network the Yankees and Nets.
attendance and SportsNet advertising is completely dependent on the Mets
"Obviously, a bunch of bad seasons together could
present some serious issues," the first source with direct knowledge of
the team's finances said.
Wilpon wants to keep it going and not
sell, but may have to if his team falls off the financial knife's edge,
The Mets declined comment.