Forbes Magazine throws another log into the fire and after their analysis they determine that the Mets and Citi Field have a net book value of negative $225 million dollars.
Ever since he bought controlling interest of the New York Mets in 2002, Fred Wilpon has used leverage to juice his MLB franchise. He borrowed heavily to buy out Nelson Doubleday, even promising his former partner tens of millions of dollars if the Mets ever moved into a new ballpark (they did, with Citi Field opening in 2009). His team is also on the hook for $40 million a year in debt service tied to the bonds used to finance Citi Field (the bonds now carry a junk rating).
Now all this debt could very well come crashing down on Wilpon as a result of his involvement with Bernie Madoff. As I wrote earlier, the Mets and their lease to Citi Field are worth about $845 million. But there is $375 million of debt attached to the Mets franchise and $695 million tied to the ballpark, leaving these assets with an aggregate negative book value of $225 million.
Adam Rubin of ESPN New York, wonders if that includes the $500 million the Mets will get for the naming rights for Citi Field.
Earlier today, the Wall Street Journal, reported that a sale could be completed by the end of June.
The New York Mets hope to complete the sale of up to a 25% stake by the end of June, according to a person involved with the planned transaction, as the baseball team seeks funds to make up for a potential settlement related to investments with fraud figure Bernard Madoff.
I don’t understand how a sale of this magnitude can be completed so soon. Wouldn’t the buyers need at least a few months just to analyze the books, statements, ledgers, etc.? Then of course there is the fact that they still don’t have a buyer yet.
The same article also reports the following regarding yesterdays meeting between Bud Selig, Fred Wilpon and Saul Katz.
They discussed the Mets owners’ exposure from a lawsuit by the court-appointed trustee gathering assets for victims of Mr. Madoff’s Ponzi scheme, according to people with knowledge of the meeting. The people described the meeting as “cordial,” noting that Messrs. Wilpon and Selig are longtime friends. Afterward, the men attended a benefit lunch at New York’s ’21’ Club.
The article is filled with more unsubstantiated allegations including this.
For years, the Mets and Sterling used Mr. Madoff’s firm as a virtual bank account, depositing everything from ticket revenue to deferred compensation for players to Sterling employees’ 401(k) money with the firm, according to a person familiar with the team’s finances.
I hope that the Mets do find a buyer and get that done by June, but it’s difficult to see that playing out at this point.
I would rather hope that they achieve a settlement with the trustee of the Madoff lawsuit by June instead. If they have the money, they should pay whatever it takes to get this settlement done and over and out of this vicious 24-hour news cycle.