— Days Without Shea —

Filed under: Baseball | CitiField | Mets
by Kingman on July 6 at 8:16AM
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 falls.

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 their finances.

* 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 Stadium.

* 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 debt load.

* 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 source said.

"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.

This 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 million fast."

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.

Stadium attendance and SportsNet advertising is completely dependent on the Mets winning.

"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, sources said.

The Mets declined comment.

[July 7, 2010 5:57 AM]  |  link  |  reply
Paul said

I have to admit I'm partly to blame for Fred's money problems. I did not re-up my Saturday Plan this year and with along buying "Better Seats At Lower Prices" on Stub Hub for 30 to 50 percent off face valve, Fred is starting to feel the cash flow squeeze. I'm sure there were plenty other Plan Holders that cancelled because of the "Plus Games" and it ALL adds up.

[July 7, 2010 8:35 AM]  |  link  |  reply
kingman said

Ha, excellent job Paul! At this rate, you'll be able to buy the Metsies when they do go on the block.

(If you haven't left a comment here before, you may need to be approved by the site owner before your comment will appear. Until then, it won't appear on the entry. Thanks for waiting.)

Site Map | Contact Us | About Us | Advertise With Us