Forbes: Mets Worth Over $100 Million Less Than Last Year
Yesterday, Forbes Magazine valued the New York Mets at $747 million dollars, a significant decrease from last years $858 million dollar figure. The Mets were just one of three MLB teams whose value declined, the other two teams being the San Diego padres and the Cleveland Indians.
Forbes’ Monte Burke explains some of the reasons that led them to devalue the Mets by over $100 million dollars.
The Mets had just finished a woeful season, losing more than half of their games and drawing 600,000 fewer fans than the season before. Despite the new ballpark, the team’s revenues had fallen by some 13%, resulting in an estimated $6.2 million in operating losses before interest, taxes, depreciation and amortization. The Mets did not have enough cash left over to meet a mountain of bills, including an upcoming league revenue-sharing payment that small-market teams were counting on. The banks that had once been so willing to lend liberally to the Mets were no longer in the mood to extend more credit.
Burke forecasts a bleak outlook for the Mets moving forward,
The situation with the Mets looks particularly bleak. The emergency $25 million loan from baseball has bought the Mets’ owners time to attempt to raise money by selling an ownership stake in the team. The purpose of the equity financing is to help fund expected operating losses in 2011 and potentially 2012, and pay down the league’s loan and other debt. Crushing payments are looming as early as April on the Mets’ $145 million payroll for the upcoming season and other obligations. The Mets originally wanted to sell only 25% of the team. With $450 million of debt, it seems the Mets would be lucky to get even a modest $75 million for that stake, especially considering the discount often applied in sales of minority holdings. [Fred] Wilpon and [Saul] Katz have publicly conceded they may need to sell more than a quarter of the Mets, but they insist on maintaining a controlling share. Bankers are drawing up some creative solutions. Still, the math does not look good.
Obviously, this will change things dramatically for future investors who by the way are not liking what they see as they go through the Mets books. Potential “buyers are now feeling gun-shy” about making any future investment in the team.
About the Author: Craig Lerner
I'm a data analyst and researcher for a leading news agency who loves life and is hooked on the Mets. I love following the Amateur Draft and have a particular fondness for the Mets Minor Leagues who I follow each day. Give me a cold beer, a summer day, and a Mets game, and I'm good to go.
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Last updated: 05/18/2013
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