Wednesday, February 9, 2011

Mets Ownership in Trouble? Seeking New Partners?

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-Digger's Daily-

New York Mets principle owners have been targeted by the trustee representing victims of the Madoff ponzi scandal. Mets owner Fred Wilpon adamantly denies allegations of any wrong doing (partner Saul Katz also named). Nonetheless, partial ownership of the Mets is open to the highest bidder.

Mets miseries know no bounds. Late season collapses plagued Mets teams in early part of this decade. General Manager roster decisions backfired. CitiField was an immediate bust in eyes of long time Mets fans. And now, financial ruin could be forming quickly on the horizon. Mets brass tightened their belts for the 2011 season. New York is taking a new approach after squandering tens of millions on players who failed to produce. It's a direction that's keeping fans wincing. Now, we're subjected to rumors, innuendos, denials and a very public search for new limited partners.

Accounts and details of trustee's allegations have been played out to extremes in New York media circles. Quoting from New York Times, January 28, 2011 (http://www.nytimes.com/2011/01/29/sports/baseball/29mets.html?_r=1)....
"The trustee’s lawsuit against the Mets takes aim at roughly 100 financial entities owned or controlled in part by the Mets owners Fred Wilpon and Saul Katz, and could imperil the assets held by the two men, an array of holdings that includes the baseball team, the regional cable sports network that televises its games, as well as commercial real estate holdings and investment funds.
The lawsuit seeks to recover not only $300 million in what the trustee, Irving H. Picard, calls “fictitious profits” — the difference between what the Wilpon and Katz entities put into Madoff’s investment firm and what they took out over their many years of investing — but also additional millions, according to the two lawyers, who would not be identified because of the secrecy surrounding the case."

Should the Wilpon's and his various businesses be worried? You betcha. Irving Picard, trustee for the Madoff victim's, has successfully won nearly $10 billion in settlements from other Madoff investors. Wilpon, Katz and their various financial entities should have been aware of what Madoff was up to. They were close personal friends for many years with various business relationships too. One doesn't need be a lawyer, accountant, judge or jury to realize something stinks here.

Did any employees of Sterling Equities recognize reason for concern? Especially after similar experience with an investment in Bayou Hedge Fund Group (another ponzi). Did the Madoff's, Katz or Sterling Equity partners cash out of the Madoff ponzi with knowledge of imminent demise? There's much left to be answered. Picard seem intent on proving all parties involved knew and cashed in to recoup or profit from the scheme. When the Madoff scandal first went public, Mets brass was quick to defend the team as solvent and unaffected. Soon thereafter, Mets claimed to have lost a ton but remain in good standing.

Mets management has to be smarting from weakening attendance figures in new CitiField. Poor play on the field doesn't help either. The Mets also quietly refinanced $450 million debt on SNY (regional sports network). This deal paid out over $240 million in "dividends" to various owners with Wilpon's being largest recipient. Good to know banks are making loans when 1/2 is to be paid out to ownership interests. What's wrong with this picture? The borrowers refinance to avoid being squeezed. Bank agrees and then watches large portion of new loan go directly into partner's pockets instead of the corporation refinanced loans were intended?

So what does all this mean for Mets fans. Wilpon's will be holding onto every dime for various reasons from personal to legal. Attendance will continue dropping as team struggles to remain out of NL East cellar. No top tier free agents will be signed. Mets pitching staff is in desperate trouble of paper. Farm season has been depleted. Ownership has been getting blasted daily in the new year. It won't let up if the Mets begin slowly in April. Wilpon's have no desire to sell majority ownership of the Mets. The Wilpon family has made clear their intention to keep the team as kind of a family legacy passed on from generation to generation. That's quite a respectable desire. However, changing times and potential pitfalls may just doom these plans. Who's willing to become a minority partner with men accused of financial trickery saddled with growing debt, uncertainty and weakening brand?

New York Mets franchise has been tagged in the neighborhood of $858 million by Forbes Magazine ranking them as one of sports most valued commodities. Various names have been thrown around as possible investors. Nothing finalized. Rumors floating claiming 25% of the team is up for grabs. Declining US dollar values, a team entrenched on decline, poor attendance, massive inflation awaiting and vicious political and financial instability creates a very bleak picture for anyone seriously considering a run at becoming a sports owner. Throw in a nasty billion dollar lawsuit against majority owners complicates everything.

Economic and present day realities should be carefully examined by current Mets ownership. A wise decision would be to sell majority ownership in the best interests of New York Mets baseball and their loyal fans. Current owners are exacerbating a situation doomed to get worse by the day.

There's one card left to play....... the players.

Team captain David Wright created a buzz by demanding "Put up or Shut up!" It's time to play. Borrowing a partial quotation from one of my favorite sports sayings of all time (Field of Dreams)... "The one constant through all the years... has been baseball. America has rolled by like an army of steamrollers. It has been erased like a blackboard, rebuilt and erased again. But baseball has marked the time. This field, this game: it's a part of our past... It reminds of us of all that once was good and it could be again."

All can be good once again. Just win. Baseball history has proven time and time the game will always go on. It's also shown us money doesn't guarantee victories. Playing the game does. The best team isn't always the one winning. Teams that win consistently play with heart. Winners never quit, give up or become intimidated. They hustle 100% every single play no matter how insignificant it may seem at the time. They play hard, with pride, poise and determination. They don't swing for the fences when a single will do. It's all about heart and committing to stick within the fundamentals of baseball placing team success well above personal glory. Role models: 2003 Florida Marlins, Minnesota Twins, 2007 Colorado Rockies, 2010 San Francisco Giants, 2010 Texas Rangers and reflecting back within team history... 1969 New York Mets.

(www.allworldallsports.com)

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