4
2013
Mets Refinance $700M In Debt, Gain $160M In Spending Money
An article by 
Since the NY Post broke the story on Thursday that the Mets have refinanced $450 million dollars in SNY loans, we’ve gotten a little more clarity on what looks to be an ambitious overall re-fi plan by the Wilpons.
Including other outstanding loans that were refinanced, Mets owners have re-positioned about $700 million in total debt.
In fortifying their improving financial hold of the Mets, they have cashed out to the tune of over a $160 million dollar windfall.
It’s most likely the last thing you want to hear, but things are looking up for the once cash-strapped Mets who were wading through some choppy financial waters.
To begin, all of their outstanding debt has been refinanced at lower monthly costs and interest rates, with many of the due dates being pushed back as much 2-3 years , and more importantly, they get a huge influx of over $160 million dollars to spend as they see fit or just keep for themselves if that’s what they elect to do.
According to Forbes and the New York Times, the resulting stability and financial muscularity of SNY and similar networks make them low risks to banks. Late last month, SNY refinanced $450 million in existing bank loans at lower interest rates and borrowed at least $250 million more. With their 65 percent ownership of SNY, Wilpon and Katz should have walked away with about $162.5 million. The refinancing was first reported Friday by Bloomberg..
MLB commissioner Bud Selig must be feeling high and mighty tonight, knowing full well that it was he who hatched the scheme to help his longtime friend’ by dispatching CRG and Sandy Alderson to save Fred Wilpon’s empire.
Why were the banks so eager to help? Because baseball franchises are a great investment that keep rising in value. Because obviously they saw the Wilpons as a good risk. Because of the financial clout of a regional sports network. There were plenty of good reasons if you bothered to look beyond all the doomsday scenarios that were being painted by other prominent bloggers.
I always knew that when the timing was right those two huge loans that were due in 2014 and 2015 would be refinanced and pushed back. On December 5, I posted about the financial muscle of Sterling Equities and the billions of dollars they have in real estate holdings and other investments.
For years I’ve been trying to tell anyone who would listen that the Wilpons are not broke. The Mets are just one of over a dozen different businesses in their vast empire. The Madoff situation was a big body blow, as was the Picard lawsuit, but as I always asserted the owners did exactly what any other Fortune 500 company would do – cut costs and expenses, and ride the storm out. Now that all of that turmoil is behind them, expect a return to normalcy with regard to spending and overall team operations. You still have some doubters running around with their heads on fire screaming bankruptcy, insurmountable debt, and doomsday. Don’t believe that nonsense.
Make no mistake it was very easy for the banks to give the Mets this huge financial bailout complete with golden parachutes. They’re not in the habit of refinancing three-quarters of a billion dollars in debt unless they are certain it’s a win for them and that the debtors have the wherewithal to pay it back.
On the plus side for the Mets, the team could start spending again in the future, as they once did before the Madoff hiccup happened. Whether or not Alderson does though, is another story completely.
Richard Sandomir says the Mets are in a very good position to dive into the free agent market and one MLB adviser told him they should consider signing Michael Bourn or at the very least Scott Hairston to address the obvious needs in the outfield.
Sorry to disappoint you, but the Wilpons are here to stay as I always said they would be. There’s an old saying that applies here; better the devil you know than the one you don’t. Maybe that will give you some comfort.
Look, the bottom line is that in tough and uncertain economic times, they did exactly what we would have done if we were in jeopardy of losing our own home or business. Don’t begrudge them that. The person you should be ticked off at is Bud Selig, the propagator of all this.
Original Post 1/3
According to the New York Post, team owners Fred Wilpon and Saul Katz have refinanced $450 million in loans borrowed against cable network SNY. They have been working toward this since October.
Back in October the New York Times reported that this would no only reduce semi annual loan payments significantly and create less revolving debt, but that the owners could net $30-$40 million in dividends and cashout. Also, by completing it before the new year, they avoided higher capital gains taxes on their SNY investment.
The Post also mentions that S&P estimates that stadium revenue fell six percent last year, with seat revenue suffering the most significant decline of 13 percent. Suite sales were the saving grace, rising 11 percent — but S&P said that was due, in large part, to the Mets’ parent, Sterling, now owning “about 20 percent of the suites.”
Rival ratings firm Moody’s holds a different view and in November upgraded its outlook on the ballpark.
The Wilpons have authorized an increase in payroll over the $95 million payroll level in 2012, but the front office has yet to sign a singular MLB free agent citing their disdain for players desiring more than what the front office believes they are worth. If things stay as is and they fill out the rest of the team with $500K players, the Mets will have a payroll under $85 million for the first time since the 1990′s.
About the Author: Joe DeCaro
I'm a lifelong Mets fan who loves writing and talking about the Amazins' 24/7. From the Miracle in 1969 to the magic of 1986, and even the near misses in '73 and '00, I've experienced it all - the highs and the lows. I started Mets Merized Online in 2005 to feed my addiction. Follow me on Twitter @metsmerized.
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NL East Standings
| Team | W | L | Pct. | GB |
|---|---|---|---|---|
| Braves | 25 | 18 | .581 | - |
| Nationals | 23 | 21 | .523 | 2.5 |
| Phillies | 21 | 23 | .477 | 4.5 |
| Mets | 17 | 24 | .415 | 7.0 |
| Marlins | 12 | 32 | .273 | 13.5 |
Last updated: 05/19/2013
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I was reading this as well this morning while drinking my coffee and couldn’t help but thinking SRT … not sure why but i think she might have a problem knowing this….
LOL….
The Wilpons are on a sinking ship with no life preservers.
Did the Mets also sign Kingfish together with Andrew Brown?
Now go sign dariel Alvarez and that Cuban shortstop its a win win situation
Works for me.
Alvarez is debuting for ML teams this Saturday. Don’t know where. The only thing I read on this over at MLBTR as that the Marlins won’t be in on him.
I’m much more interested in who will be there, than who will not. The Mets had better be at least kicking the tires. If they just flat out pass on this, I can’t help thinking it’s b/c of the money (lack thereof) and nothing but the money.
I don’t see why not 24 year old good speed enough power and the young short stop we can trade Murphy for another Young outfield prospect mets need to use they money smart these guys should sign for 4/5 million a year.
Yes because paying Phil Evans 5X slot, over paying and over reaching for Cecchini, and then giving SS German Rosario the largest bonus in MLB history, and having Ruben Tejada in tow isn’t enough. We need more shortstops, who needs outfielders. What a great way to spread our resources.
Trade chips ? Why not get talent Blue Jays kept getting catchers now look they got a Cy young winner.
Trade chips? For a front office that is on record that they WONT trade their top prospects? They have a dozen young righthanders in the pipeline and we need an outfielder desperately. Where’s the trade using our trade chips? Stop deluding yourself and pretending this front office has a plan. Fred and Bud’s henchmen are not here for yours or the team’s benefit, only Saul and Fred. Wake up and smell the arsenic.
They would be worth more in triple A then in low A
And trust me I don’t think they got a plan that something I would do
I have to agree. Outfielders and more lefthanded starters. There seems to be no rhyme or reason to this plan.
Who are you going to trade for the players to fill those holes?
Wright? Untouchable with that contract plus no trade clause.
Ike? Then you need a 1B
Niese? Creates another hole
Harvey? Same thing
Wheeler? Needed since Santana is gone after this year the latest
Flores? Dont know if he has much trade value seeing as he only hit AA.
What do you really think you will get back for anything the Mets have? Most of the talent is in the low levels which means teams arent going to give up a lot.
Well we would get more than we got back for K-Rod and Pagan thats for sure!
Ah Metsie you still think KRod is worth something.
He was going to vest if he went to any team that was going to use him as a closer. That meant $17M for the following year which by the way, was worse than Francisco. But you think they could have cleaned up some teams farm system. Not in a million years. KRod was losing speed off his fastball BEFORE he signed with the Mets. He is garbage and the rest of the league knew it. Alderson was lucky to get out from under that vesting contract because you know damn well KRod wasnt going to forgo the money. The only reason he negotiated with the Brewers on the option is because he wasnt closing and knew he wasnt going to earn it. So, he pocketed an extra $500K.
But Krod does have one asset: at least he can beat up old people and women.
F**KING THIS^^^^^^^^^
I laugh my arce off whenever I read posts about the FO giving KRod away and how they should kept him. YOU COULD NOT HAVE SAID IT BETTER!!!
And saving those $17 million are one of the few reasons why the wilpons are still the owner of the team, so maybe keeping Krod would’ve been a blessing in disguise for us because it could’ve forced the wilpons even more to sell, which is what everyone wants, but fail to notice by the gooners and sandy lovers is how he has saved the wilpons to keep the franchise while picking up all kinds of garbage to play for the team while reducing payroll down to $85 million.. Amazing isn’t?
Is K-Rod getting paid 17 Million?
Nope which just i another example of how you SAND PEOPLE justtalk out of your ass without ever passing through the brain!
K-Rod is still better than Francisco is 2 6Mil per year isn’t he?
Geta clue and come back when you have one.
Do you have any clue what reality is? Evidently not since it is continually having to be explained to you. Okay Metsie here are the facts so pay close attention.
KRod had a vesting option in his contract if he finished 55 games in 2011. If he achieved that mark, he was going to be paid $17M for 2012. If not, he was due a $3.5M buyout. At the time of the trade, he had already finished 34 games with the Mets needing only 21 more to vest. Are you with me so far?
He was traded to a team that had an established closer (Axelrod). Hence Krod became a set up man. Thus he was not finishing games. The only way a team was going to acquire Krod is in a non closing role because nobody was going to pay him $17M for 2012. Again, he was in so much demand that he had to go back to the Brewers and accept arbitration.
Now here is where it gets tricky so pay really pay attention. The Brewers, to protect themselves against losing Axelrod to injury down the stretch (they were in a playoff chase) and having the option vest, negotiated with Boros to pay Krod and extra $500K ($4M) in the buyout and make the option a player and team option. Thus Krod pocketed an extra $500K to forgo his option.
The option didnt vest because Krod was traded to a team that didnt need a closer. If Krod stayed with the Mets, he would have vested, thus earning the $17M in 2012. As for negotiating out of it, Krod would not have done that with the Mets because he WAS going to earn it. The only reason he accepted the offer from the Brewers was because he was NOT going to vest with them. That is the reason why he was a salary dump. And, as we saw from his performance last season, it wasnt even worth the $8M that he got in arbitration.
Do you understand now?
there are certain people that after repeated attempts, using small words, have not grasped the concept. And they never will. though anything that goes against their core agenda beliefs is automatically dismissed out of hand.
FACTS…
In AUgust after the rade dithat option still exist? NOPE! SO that means we could have gotten rid of it too! SO much for you having a clue….
What you got is a story (thats FANTASY) and your sticking to it!
Yes he was traded to a team who HAD a closer so his option was not going to vest…WHY did they bother to buy it out?
Did he get 17Mil once he became a free agent? NOPE!
The point you seem to forget is if they were so worried about thier closer getting hurt then why didn’t K-Rod keep his option and make his 17.5 Mil?
ANSWER: BECAUSE he WANTED to be a closer when he hit Free Agency, End the season with 30+ saves which would have got his a deal to close for someone else….
He GAVE UP THE OPTION for a CHANCE to be a closer for them and he would have done it to STAY a closer with us…
If you don’t understand that then come back and talk to me whenever the Wizards gives you a brain…
Otherwise your just walking down the yellow brick road to Sandy Sucking…
Metsie…..
“FACTS…
In AUgust after the rade dithat option still exist? NOPE! SO that means we could have gotten rid of it too!”
Your scenario has got to be the most deluded scenario and the furthest thing from reality that I have read in a long time. But then again, you are often out touch with reality. Your presumption that KRod would have just voluntarily voided the $17mil option with the Mets(which he was sure to attain) is truly delusional. He never would have given up his closer status and didn’t have to with the Mets. He merely had to finish out the season and get paid $17mil the next year as the Mets closer. And thats exactly what he would have done because once the option kicked in, no team on earth would have taken him off the Mets hands with a $17mil salary attached.
Also, the team’s usage of KROD was being monitored very closely by his agent and the Players Association like hawks. The Mets had no options but to use him as their closer and be on the hook to pay an ineffective, declining pitcher a rediculous $17mil the following year, or wind up in court. When he was traded his entire situation changed and he HAD to move to a different strategy. Thats the only reason we saw him work out the deal that he did. No such deal that you foolishly describe would have been worked out with the Mets…..you are delusional.
Try entering the real world Metsie
Sorry but the only one deluded here is you…
Why did he get rid of the option in Mil?
Because he wanted to be a closer and at least have a shot at being used as one….
Why would he get rid of the option with us?
To BE SURE HE WOULD REMAIN a closer…
He sold it off for LESS of what he wanted there and could have gotten ALL that he wanted if he sold it off to us!
The fact he sold it off to Mil just PROVES that he wanted to be a closer more than 17.5 MIl!
WHich means we had more leverage to get him to sell it off because WE ACTUALLY could give him what he wanted most!
Texas Rangers are looking for a 1B/DH. Send Duda to Texas, Texas sends Craig Gentry to the Diamondbacks & the DB send Kubel to the Mets.
Better do it fast before Texas gets Berkman.
“Wright? Untouchable with that contract plus no trade clause”
lol
reyes’s contract sure wasnt untouchable !
bwahahahahahahahaha
Was Reyes the only piece in the deal? No he wasnt. The Jays also got another couple of pieces that for very little from the Marlins. What, are you going to include Ike and Niese with Wright to move him?
Reyes = no no trade clause = DUMB
Wright = no trade clause = SMART
Might have something to do with why one was tradeable and the other isn’t.
As long as you’re getting paid handsomely it doesn’t matter (See David Wright)
And I completely agree with the FO’s take.
The market shifted upwards and completely made even the most average of players too rich to sign.
Keppingger 3 yrs 12 mill
Liriano 2 yrs 14
Guthrie, Ross, Melkey.
Yes, they have money to spend, but at these prices it’s not enough to make this team a playoff contender. There better off putting that money in the draft or rolling it over to next off season. They’re choosing to ape d wisely which is refreshing.
I always wanted a payroll of at least 135-140 mill. In this market, I think it’s only fair. But, if it won’t touch that number than they must spend wisely and that means they’ve been priced out for 2013.
Don’t blame the FO, blame the owner…
Cue the sandy badgers…
For being the one who complains the most about the two divides, it’s amazing how often you start the shit up. At some point you have to stop polishing Sandy’s knob, no?
Brings nothing to the site except Alderson’s propaganda and hate. Two things this site could use less of.
SO WAIT!!!
You mean to tell me that Sandy Alderson has BADGERS?!?!
Well I always knew he was a Weasel didnt know he owned them as well…make sense
We don’t need no stinking BADGERS….uh I mean Badges!
Sorry….
Ugghh we’ll never get rid of these clowns. No matter how much we want them to leave. Being a Mets fan is like being strapped to the backseat of a car with a drunk driver who won’t give up the wheel.
LOL!
Alderson can lick my Moneyballs.
LOL that one got me doing a spittake!
The Wilpons are not going anywhere, so why not see them through their own fiscal cliff? History tells us that they will spend when they have money. When that happens we can get rid of the front office and bring in a progressive front office who can deal with these new markets.
Like many, I would prefer new ownership, but like it or not, the Wilpons are here to stay for a long time. They are by no means on a sinking financial ship. That said, there is absolutely no excuse for this team to not have $20 to $25 million to spend patching the holes in the current roster, changing the franchise momentum by fielding a competitive team in 2013, and setting the table for expanded spending in 2014. There are still enough decent players available via trade or FA to get this done without compromising the future.
If the Wilpons had a coat of arms the Met “NY” would be at it’s center. They are never going to give up the franchise. It would have to be pried from their cold dead hands.
Let’s face it. The Mets in 2013 will be a “small market” team full of mostly hopeful minor league players with probably the worst offensive team in their division, a decent starting rotation, a shaky bullpen, a nondescript outfield and an embarrassment to New York. The Wilpons have taken care of themselves but have given Mets fans nothing to look forward to.
This refinancing deal has been in the works for a while. If ownership knew they would have available budget, wouldn’t it have made sense to dish out a few million extra to retain the Cy Young Award winner? The answer is simple: no. Why? That was never the plan. Sandy Alderson plans to build the Mets literally from the bottom up, not the top down. That said, the Mets have no plans to sink money into the available crop of free agents. Will the team be a player in the FA market? Yes, post 2013, after Alderson “experiments” with Ike Davis, Lucas Duda, Daniel Murphy, Kirk Niewenhuis and Jon Niese to identify what their value is (or might be). This will also allow young arms to get another year of seasoning.
That does appear to be the plan. 2014 will be the year for the push. I have no problem with Sandy rebuilding from the ground up. Been calling for that since 2002.
The only FA signing I would endorse is Hairston because he’s a known quantity, wants to be here and suits our team needs. Bourne strikes out too much and is likely to be over-priced. Doesn’t make sense to over-spend when your money is short and the quality limited.
SA is wise find out what we have in the field while we build a stable of top flight pitchers. Then, next year, make our move when the team is more stable financially and our pitchers are further down the line in their development.
Hey Bro – do me a favor and don’t mention Sandy and plan in the same sentence. Sandy was brought in to gut the club – which is what he is doing. The fact that they are getting some prospects is not much more than an afterthought.
Sandy will be gone by this time next year having accomplished the only plan he set out to do – put a team on the field that is going to cost the Wilpons between 50 and 75 million dollars.
I’m still waiting for good news for Mets fans. Like you know, a move is made that actually has fans excited about the 2013 season. This is great news for the Mets owners, but again, I’m still waiting for good news for us…the fans.
I find Richard Sandomir to do a solid job in following the Wilpons and breaking things down the way he does.
I don’t.
Other than his most recent article, he has repeatedly shown contempt for the Wilpons which manifested in unbalanced, one-sided reporting, doing Picard’s bidding.
I think your confusing him with Megdal.
When the lawsuit was first filed, Sandomir led the charge in the media against the Wilpons, serving as Picard’s personal mouthpiece, and publishing one-sided stories. He continued to proclaim doom and gloom for the Wilpons in the Madoff lawsuit, right up to the day of settlement. He’s been anything but objective when it comes to the Mets ownership and their financial/Madoff issues, always taking a side that was heavily pessimistic and similar to Megdal’s position. Though Sandomir has been somewhat more moderate than Megdal.
Based on the articles I read at times by Sandomir surrounding the Picard lawsuit we will have to agree to disagree.
You disagree about Sandomir’s objectivity? Or that he was on the wrong track right up until the day of the settlement? I can probably dig up an article that demonstrates the latter — showing how much he was on obvious Picard cheerleader right up until the end.
I disagree that Sandomir was biased toward the Wilpons. I found him to be more balanced in his reporting towards both sides unlike Megdal who in my opinion often found wrote as if the Wilpons were guilty slant even though the trial had not begun.
OK, we will agree to disagree
One final thought on the post: If ownership does have the “financial muscle of Sterling Equities” and “billions of dollars” in real estate holdings and other investments is a an accurate assessment, wouldn’t it be wise to cash in some of the holdings, pay off the debt and live debt free? Why extend the debt and pay millions in interest? If ownership has investments in the billions, pay off the debt now and restructure.
Not really because many of thier holdings produce revenue (Mets being the one that hasn’t recently).
All thier commercial RE holdings collect Rent (which is the one part of RE that has not been slumped) and that generates far more money than there is Overhead.
SNY turns a profit and if I’m not mistaken they can’t really sell off their holdings there to anyone but Time Warner and Comcast. They get first shot at buying the other’s shares.
The Wilpon business is not like typical stock market investments, most of thier money is tied up in revenue generating investments and the loans to buy them were all factored into the business model from the start. Refinancing merely reduces the amount of profit that has to go towards paying the debt meaning they COULD pay off the debt quicker if they had a good year and chose to.
Why? Money is inexpensive now. All corporations are stocking up on cash while refinancing their debt at record low levels. When you are look at 3 point on millions of dollars, turning a better percentage isnt that difficult. Just investing in the S&P last year yielded 11%. That is an 8 point swing.
Jeff Wilpon has a big sign in his office;
“Rich Dad, Poor Dad, Refinanced Dad”
Sandy Alderson has a big sign in his office.
“Retirement Days, 270 and Counting as Mission Accomplished”
Fred Wilpon has a sign that says:
“A billion Dollar Legacy”
Scott Borus has a sign that says;
” I hope this means the Mets are back in the steak aisle”
So it’s Sandy Aldersons choice to spend or not spend Fred Wilpons money?
In what world?
THIS world….
Sandy has said he has money to spend (meaning Freds Money) and he has not spent any of it on an MLB player….Except David Wright who is probably the ONLY case of Wilpon $#!TTING in the Sandy Box…
Hi Joe,
Have a few questions that could perhaps be answered.
With that $160 million windfall, how much of that has to make up for the losses accumulated over the past two years and possible losses this upcoming season?
What about the half billion dollars they lost to Madoff? Have they recouped most of it or does that $160 million have to be applied to offset that loss as well?
How much then of that remaining portion could be used for 2013 and how much would be set aside for a period of future years?
Are there other areas in which the Mets also need to re-invest back into other than the roster – i.e., non-baseball matters or the minor leagues or in order for the Mets to once again become profitable?
And can they sustain profitability even with a winning club if an average $241 cost for going to a game is still too expensive for too many fans – let alone the cost for trying to sell those unused luxury suites?
And if revenues do not pick up, what happens when they do have to start paying those albeit lower but still expensive re-financed loans?
Happy new year, Joey D. I can’t answer all your questions, but just in terms of their Madoff loss, I think that half billion is gone. Down the drain. Now they will be reimbursed around 170 million for their losses, but then that is almost totally wiped out by their settlement with Picard’s lawyers. So at the end, it will be a net loss of roughly half a billion dollars.
Hi Metro and happy new year too.
So unless the Mets can look at that half billion dollar loss as petty cash – along with the financial losses accumulated over the past two years, I wonder if that $160 million can be looked upon in terms of money to spend – or to build up their capital reserve once more.
Or – it can simply be used to pay the civil suit agreement even though that eventually might loop back to them as well.
Joey, the money for the civil suit won’t come due for a few years at least. By that time Picard may have clawed back enough to fully cover any money the Mets owners owe. In fact, it’s feasible the Wilpons will get a check back from the trustee at that point. But it won’t be a lot of money if they do. (However, it could be enough to pay for a nice free agent for a year or two.)
As for the $160 million due to the refinancing, I don’t think anyone knows at this point how it will be earmarked. It could go for paying down other debt, it could go toward paying last year’s losses, it could be simply pocketed and used by the owners to splurge on themselves, or it could go toward financing a new business endeavor — like the redevelopment of Willets Point. No one knows, and if you read anything about it right now, it’s pure speculation.
All very valid questions, Joey.
We shouldn’t be fooled into thinking there’s some 160 MIL surplus they can spend now on the Mets.
SRT, and what if there is? but sandy (Because that has been his MO) doesn’t choose to spend it? What will you say then? will you use another excuse to defend him? Like the pool of FA it’s not that good, or x player suck, not worth the $ etc… YOu guys keep amazing me..
Sorry Alex, but I can’t wrap my brain around the Wilpons opening up boatloads of money for the front office to spend and SA saying ‘no thank you’ these past 2 seasons. What, exactly would be the point in that? He’s not going to be here long enough to see this organization get to post season. So knowing he’s a ‘one and done’ type GM, if he had that money to spend, wouldn’t he have done so, so his legacy on his way out would be a winning one???
I still believe the financial state of the Mets had everything to do with losing Reyes, trading Dickey, for example.
2013 looks like a year we are indeed ‘punting’.
If they don’t open up those wallets and reinvest in this team after the season – especially with even more money freed up – then I can only assume it’s more about just holding onto the team and a lot less emphasis on actually winning anything.
SRT, which is EXACTLY what i have been sayign for 2 years, i kept saying this man is not here to build a winner or care for the fans of NY, he’s here with one purpose which is reduce payroll at all cost for the wilpons to retain the team, and even if the team has money to spend they won’t spend it because as a GM that is not his MO and hasn’t been for years, you can see this man cringe as soon as players demand or get top dollars, yet, 2 years ago when i said what most people are sayign that i was pegged as a hater, a loser, a guy who doesn’t know about baseball, got insults left and right, which is why the whole issue with the sandylovers and gooners became popular in this blog. Your problem is with the wilpons and i get that, but you must admit that sandy alderson is in for the fix as well, he’s just as guilty for going along with the plan no?
‘…The article is correct in the assertion that the Wilpon’s were not the ones having money problem; it was the Mets’
No argument on me from this one above.
‘…and even if the team has money to spend they won’t spend it because as a GM that is not his MO..’
This one above is where our opinions part company. First, if not for the financial problems of the Mets, no way do I believe SA would be the current GM. Not sure Omar still would not have been replaced as the team was going backwards since 2006 under his watch – but if not for $$ problems, the Wilpons would have probably just thought they needed to bring in a new GM who could get them back to post season.
Second….even if SA was somehow the heir apparent to Omar – I still do not believe SA would have said ‘no thank you’ to a bigger budget, especially if his goal was to win – and not what his goal apparently is in reality, which is field a team while the Wilpons figured out the mess they have with the Mets finances. I’m not saying he would have spent like a drunken sailor but I still believe Reyes would then still be the SS here.
‘…he’s just as guilty for going along with the plan no?’
Let me add on this one….of course he’s going along with that plan. I still believe he was part of the deal between Selig and the Wilpons and he knew what he was getting into.
Maybe our opinions are not that far off…..
SRT, remains to be seen whether you are right or arent. SA has never had a problem with not spending money as long as he’s getting paid, he did that in Oakland and in SD went money was kind of an issue. He still thinks is 1990 or something, when talking about contracts for players, again, the man was assign here by selig to help the wilpons, not to build a winner, i guess time will tell whether he was doing it for the future or just plain the wilpons, but so far, he’s 0-3 in GM duties as a GM
Tell you what…..my biggest fear is when SA’s contract is over, Jeff appoints himself as new GM.
At that point, I will lead the mob with the pitchforks…..
I think Jerry Jones already appointed himself GM of the Mets after Alderson’s contract runs out.
Is it just me or does spending $15 to 20 mil on Hariston not seem smart? Guy is a Platoon player with a low BA, mediocre OBP and tons of strike outs for just a possible 20 hrs..Thats a waste of money for a platoon player. Also would be a huge mistake.
No it doesn’t which is why spending13 Mil on a guy like Victorino would have been a better move….
Victorino would not even increase the payroll above last year’s number because Bay and Wright deferred money, Bay’s remaining money comes off the books and Santana comes off too which leaves 20 MIl a year to spend next year.
While I would rather have seen the Wilpons´ lose the franchise, this qualifies as good news since it means from now on, decisions can be fully made with Baseball in mind and not finances.
In the current situation, it makes little sense spending significant money in a multi-year deal on a fringe # 5 starter or a platoon OF or a setup reliever.
Basically, with 2013 having been punted by trading Dickey (rightfully so, considering the package), might as well not clogg the rosters with players who won´t be at least as useful in 2014 or 2015.
Yes, odds are that the 2013 outfield will be as terrible as the 2012 version – unless Kirk Nieuwenhuis breaks out or Lucas Duda rebounds to 2011 level offensively. Yet, if 2013 is also about finding out for good what we have in these two (or not), so be it.
Next winter, several solid outfielders will be eligible for free agency:
Shin Soo Choo
Jacoby Ellsbury
Corey Hart
Curtis Granderson
Chris Young (assuming A´s don´t pick up his 11 million $ option)
Carlos Beltran (!)
Alex Rios
Carlos Gomez
Jason Kubel
Hunter Pence
Nelson Cruz
Martin Prado
David Murphy
while others should be available in trades: Dexter Fowler, Carlos Gonzalez, Michael Cuddyer, Justin Upton (if not traded this winter) or Josh Willingham come to mind for example.
Considering the Mets are on stronger financial footing and should have over 30 million $ available to spend even with a payroll that remains in the 90 million $ range only, it shouldn´t be much of a problem adding two of these, maybe one higher profile and one lower profile, to the mix, plus fill out the rest of the roster.
Awesome !
Now lets see what Met players are extended with arb + free-agent years being bought out in advance !!!
Ike is the only one who is close to meriting a longer term contract. Another good year and I see the Mets locking him up for 5 years like Niese.
Duda, Tejada and Murphy would all increase their trade value by signing deals that ate up their arb + free-agent years as well.
This is basics of finance and a smart move by the Wilpon’s. Say what you want about them but they do know money. A classic case of refi the debt backed by other assets while improving the cash flow position of the first entity. Like many did when refi their homes in the earlier part of this century, the Wilpons are able to take money out. It is amazing what going from an interest of 6% to 3% does.
The article is correct in the assertion that the Wilpon’s were not the ones having money problem; it was the Mets. After the settlement was reached, their personal financial house was in order. Sadly, the Mets were a losing proposition. And like any owner of any company, when a company is losing money the first initiative is to get it back to positive cash flow. Smart money people do not keep throwing money from profitable ventures into losing ventures. Instead, they hire people to straighten the losing ventures out (or sell them which we all knew wasnt happening here).
Does the $160M make it into the Mets coffers or not is completely up to the Wilpons. This is the same as refi one house and put the money into another. Do Fred and Jeff do that? It remains to be seen. The Mets still might have a cash flow problem (or the change in payments might have eliminated the yearly shortfall). Either way, the noose around the Mets necks appears to have been loosened.
‘The article is correct in the assertion that the Wilpon’s were not the ones having money problem; it was the Mets’
This.
Alderson isn’t going to spend even if he had a billion dollars handed to him. His comfort zone is bargain basement…that’s who he is.
THIS^^^^^^^^^^^^^^^
As I new the whole time! With that refinance money they’re gonna flat out BUY Giancarlo Stanton from the Marlins! Yee Haa!!!!!!!
Based on the recent sale price of the Dodgers I place the value of the Yanks at 1.75 to 2.5 billion dollars and the Mets at 1.5-2 billion dollars. The banks and rating agencies know this and this is why when you have strong collateral you get a lower financing rate. We as Met fans believe that falling attendance will force the Wilpons to get into the high salaried free agent market. Wrong! The income from SNY. other business interests and investments in the stock and financial markets and bond markets diminish the importance of attendance. Don’t forget the 20 suckers, oops investors who put up 20 million apiece for basically a box and a parking space. Now I realize they played Einhorn for a sucker and he was smart to walk away. I didn’t see it at the time but I know it now. The Wipons make a lot of money from television rights, luxury tax, their cut of MLB merchandise sales, their cut of income from other teams when they play on the road. They have LOTS of revenue streams outside of and attendance. This is why they raised ticket prices again for a medicore team and telling fans in doing so we don’t really care about the quality of the team and if you don’t like it up yours !! I know Wright got a bundle of money but he will never never see a WS Ring on his finger as a NY Met. No guarantee if he signed with another team but better than with the METS. I’ll remain a Met fan since I have been with them since ’62 nbut if the fan base thinks decling attendance will make the Wilpons loosen the wallet-forget it.
I’ve been a Mets fan, lured by my dad, as long as you have, Metfan Lou! And i respectfully disagree. True, the Wilpons ‘rake it in’ from a deep asset portfolio, but the ‘value’ (asset appreciation) of SNY, TV rights, MLB Merchandise sales (Mets ‘stuff’) hinges directly on the performance of the team.
So, now that there financial woes seem to be past, i believe they’ll re-invest in the team when that re-investment makes sense in terms of a likely / probable / estimated ‘return’. Which translates to 2014 and beyond, given the current roster, what’s available in the F/A market & the trade market currently, and the developmental stage of their top prospects.
BTW, i hold no ill feelings against my dad for luring me to be a Mets fan! LGM!!!
Well now that they have the money, why wait until 2014? Stanton and Upton are still out there. When we suck in 2014 it will be 2015 and then 2016. Are you saying it doesn’t make sense to go after Upton or Stanton NOW?
What terrible fathers we must have had to sentence us to this incredible 40 years (for me) of suffering. I got even and did the same exact thing to my daughters.
40+ too for me, thanks to my Mets loving, Yankee hating Dad.
I wouldn’t have it any other way though. I figure it could always be worse and I could be one of those arrogant, obnoxious Yankee fans.
Hi Lou,
I’ve been contesting that the Mets are the programming that makes SNY a gold mine and as long as both are owned by the same corporation, one supplements the other. The real money is not in attendance but in television though Metsie has raised the valid point about corporations not letting profits from one holding (SNY) be eaten away by another one (Mets).
I’m no financial wizard but I wonder if this sudden windfall really makes a dent in the overall financial situation.. I ask that because when the Wilpons settled the civil suit for $162 million, they were overjoyed. In the scheme of things, if that $162 million wasn’t seen as a tremendous financial burden, how could the accumulation of $160 million be seen as a tremendous financial windfall? As big an amount as it appears to us, is it really petty cash one way or the other?
Again, I am only venturing a very uneducated guess.
But there is one other thing to consider – the damaging rift with the fan base caused by the Wilpons and Sandy over the past few years and if that can be repaired. The Mets have a lot of holes to fill and if that windfall is used to sign several free agents along with trading some prospects for veteran players to get us back in the hunt, what does that say about Sandy’s “vision” about building from within and looking out for long-term interests? is it now alright – in terms of a baseball plan – to sign long-term contracts for an outfielder, closer and starting pitcher in their early thirties when it wasn’t in 2011 and 2012 when we discarded all-stars we already had?
The answer might result in a trust that for many could never be repaired with this ownership. They will need instead to stay the course that Sandy laid out to prove they wanted him here for his visionary plans and thus we should not look to 2013 and 2014 in anything other than the light being portrayed at this time
First off while they took loans to create SNY they could not have gotten those loans without first having a significant amount of SEED money put up by each of the equity holders. The ownership breakdown (shares) were determined by how much each contributed to the creation of the company. Wilpon probably put up most of the money, TIme Warner and Comcast gave much smaller sums of CASH but gave other services and BLUE MONEY services towards carriage, channel space and more.
And that is where this 162Mil is going towards. Giving all the investors back thier seed money that allowed them to get the loan and to get it before the higher capital gains and income tax rates went up due to the fiscal cliff negotiations.
SNY loans are NOT Wilpon loans. They are loans for the NETWORK (period) and shared by all the partners who own pieces of the company.
Those partners are also the reason why WIlpon can’t just say we are taking our profit and investing into the Mets…Because none of the debt or the profit is actually Wilpon’s money to do with as they see fit.
Luckily the WIlpons managed to convince Time Warner and Comcast to take some money from SNY and buy some of those 20Mil shares of the team. And the reason they agreed to that is because should the Wilpons even be forced to sell off enough to lose thier Majority stake, SNY as an Entity could join with the WIlpons to maintain majority vote to keep the Broadcast rights that Makes SNY a channel to watch all summer.
Otherwise there is no reason why Time Warner would want to own a Baseball team. They been there did that when they Owned the Braves and they couldn’t get rid of it Quick enough….
Are you for real? Did you call the investors suckers for putting up $20M for a share of the Mets which you have valued at $1.5B-$2B? Maybe you ought to take your time and figure out your own math. At $1.5B a 4% share is worth $60M. That is a 300% return in less than a year. And they are suckers? What kind of return you do get on your investments.
As for your numbers, not likely. The Dodgers sale included the ballpark and all the land around it. The Mets do not own Citi Field, the City does, nor the land around it. The only thing the Mets are selling is the Mets. And even though the debt is in SNY name, it is obligated by the Mets as a liability. This further reduces the value of the team. SNY is the collateral agent used to secure the funding but, make no mistake, this is a Met debt.
Once again, Joe D. provides the clearest, most thorough, and most objective analysis and predictions on the Mets financial situation than anyone else. Better than any other blog, and better than Sandomir and any other mainstream reporter.
So kudos to you, Joe. It’s funny reading an article by Megdal and then reading a piece by Joe D. It’s as if they are talking about two completely different entities. Joe, you should have been the editor on Megdal’s book. But then he wouldn’t have had any book left to publish, LOL.
I completely agree with you and have been saying the same thing on twitter for over a year now.
It seems like too many either have their own slanted agendas when it comes to Mets ownership (Megdal, Sandomir, Rubin) OR the topic is simply too complex and weighty for most to wrap their heads around and explain it coherently to their readers — and that encompasses probably 95-99% of those covering the Mets in the NY area, both bloggers and mainstream media. Joe is one of the very few who can both tackle the topic coherently and maintain objectivity.
I don’t know what Joe D. does for a living but would guess he’s in business management by the terminology he often uses and his knowledge of various financial concepts. The others you mention, who are much more prominent than Joe, may have journalism degrees but none have finance or business degrees though they would have you believe they do. What they have is a large audience who buy into whatever they spew.
I’m not too sure that it isn’t more about simple smarts, integrity and writing skills when it comes to his coverage of things. After all, even some in the business press like Kossman and Ozanian have had a hard time relaying the story of the Mets financial picture without distortions, errors and/or bias.
Before resigning due to health reasons, I was the district sales manager for Borders Books and oversaw one of the the highest volume districts in the company – NY/NJ. Ironically, a few years later they went out of business. I was so glad I transferred my 401K into a personal TDA (tax-deferred annuity) about a month after I left the company. It was good thing because about 50% of the value was in company stock which began tumbling years before the bankruptcy.
Thank you very much for your comments Metro and Seligman. I do appreciate them very much.
Unrelated to this post – if anyone is interested in playing baseball again, or knows anyone who is interested, the Mid-Hudson Expos of the HVNABA is looking for a few new players. If interested email me at mitchpetanick@yahoo.com. Here is a link to the team and league page to take a look http://www.hometeamsonline.com/teams/?u=HVNABA-15&s=baseball&t=c
The games are primarily played in the Hudson Valley and on Sundays.
I’m kind of surprised that nobody has yet mentioned the amazing coincidence of the number $162 million.
The agreed upon maximum exposure of the Wilpons and Saul Katz for the Madoff ponzi debacle? $162 million dollars.
I’m sure its all just an amazing coincidence.
LOL…
I’m not even sure that matters. Aren’t the Wilpons still part of the victims clawback suit – and expect to get some money back as said victim? Or was part of that settlement with Pickard meant they gave up their claim as victims?
I never could find anything about that.
No guarantees. Their exposure is $162 million and that shows up as a debt. Depending on how much Picard is able to recover from other sources that debt might be reduced. But it is a 2 year process and until such time as any other money is recovered they have to show that as a personal obligation. I’m sure it also weighed heavily on any decisions they made on making investments in the team. I know it sure as hell would have made an impression on me.
Thanks.
In answer to your other question, yes, in theory the Wilpons/Katz team could theoretically could get some money back as part of this agreement. However, Picard would have to recover over $0.91 on the dollar from all sources before they saw a dime. That seems pretty unlikely.
Agreed on the coincidence. Another number that if it comes up will prob be a coincidence is $81.9M or $89M which is what the Wilpons owe on that $168M since they have already got back somewhere between 46 to 50% of their $178M claim as victims.
Ah…that answers my question. I didn’t know they already received money back as a victim.
Thanks.
Well they don’t actually get the money but rather it goes directly to paying their agreement of $168M.
I mean $162M not $168M.
And also this coincidence:
2010 losses – $70 mil
2011 losses – $70 mil
2012 losses – $20 mil
Total $160 mil
Forbes weighs in on this today:
Mr. Mets Split Personality
http://www.forbes.com/sites/mikeozanian/2013/01/05/mr-mets-split-personality/
If I’m reading this correctly, the Willpons absolutely need the revenues to start climbing back up.
‘New York City owns the ballpark, but the Mets operate it and are paying for its construction by using the ballpark’s revenue to pay their debt obligations.’
‘The question before Mets fans: Can Wilpon and Katz use the successful asset to resurrect the unsuccessful one by employing cash from the refinancing to improve the team and boost attendance? Thus far, the team’s only significant signing this offseason has been the $122 million deal for David Wright’
Ozanian knows as much about how the Mets plan to use the money as you and I. IOW, zilch. He’s always a glass-100%-empty guy when it comes to the Mets. He works for the YES network. Take anything he says about the Mets with a huge huge grain of salt.
I am so sick of talking about Mets finances. I just wish this finally makes it all end.
Can this $160 million windfall have the same impact on helping the Mets financial structure as we were told that $162 million civil suit settlement would as well?
Joe D. was right in his assessment that it can be used in many ways other than the roster payroll. And I might add that the Mets might not have any other choice.
Will this $160 windfall have the same impact regarding team personnel as we were told the $162 million civil suit settlement would?
Hi Joey, nobody expected them to spend that $162M on increasing team payroll. Remember, they still had to make their Citi Field debt payment and pay off the Bank of America bridge loan and the MLB loan. Additionally, they were coming off a reported $70 million loss in 2011. Plus fighting Picard came at a huge legal cost. Everyone I knew pretty much agreed that payroll would be decreased, not increased, in 2012.
Just a reminder (or maybe you know differently)
But the MLB and BoA Loans were all paid off by the sales of team shares they made last year.
Thats does not mean they were ready to increase payroll in 2012 but those loans were off the books and all that remained were SNY and Stadium loans as the mets were pretty much debt free at that point.
Hi Joe,
Yes, that is why I mentioned that while the $160 million offsets some of their financial problems it does not necessarily mean it puts them in a substantially better financial shape for now and in the future based on what they were telling us what was going to happen after the burden of the civil suit was lifted from their shoulders.