I wanted to update this post with some quotes via the New York Times from incoming MLB Commissioner Rob Manfred.
Responding to criticism over naming Fred Wilpon chairman of the MLB Finance committee, Manfred said:
“I understand the whole Madoff thing, but before and since, Fred Wilpon was an extraordinarily successful businessman.”
Manfred said the committee Wilpon will chair deals with two issues, executive compensation and a central office budget. “Obviously, to be a successful businessman, you have to know how to budget.”
“If you really understand which committees do what, I don’t see it as an issue,” Manfred said.
“He understands how the budget process in baseball has worked, and he’s more than qualified to fill that role.”
January 19
If any of you were hanging onto a slim hope that new MLB commissioner Rob Manfred would somehow be the antithesis to Bud Selig who turned a blind eye as Mets owner Fred Wilpon skirted the rules and nearly bankrupted a big market franchise, think again.
Bill Madden of the Daily News reports there was a lot more happening at last week’s owners meeting in Arizona than just a farewell party for Bud Selig.
New head honcho Rob Manfred announced a complete overhaul of major league baseball’s hierarchy and among the new restructuring he named Mets owner Fred Wilpon the new chairman and head of the MLB Finance Committee.
In what was his first major decision as the 10th commissioner of baseball, Manfred showed that the commissioner’s office will continue to have the same close and binding relationship with Fred and Jeff Wilpon – just as it had for nearly a quarter of a century under Bud Selig.
Wilpon, who allegedly lost about $700 million in the largest Ponzi scheme in American History – the second time he was embroiled in a massive Ponzi scheme – was nearly forced to sell the team three years ago and is still on uncertain financial footing.
What makes Manfred’s decision so bizarre is that Fred Wilpon admits to not being the sharpest tool in the shed when it comes to financing, and in fact, Wilpon’s entire defense case in the trial brought on by trustee Irving Picard was based on his ignorance of how the convicted Bernie Madoff oversaw his investments as well as his role in team finances. His entire defense was based on ignorance of his own team’s finances.
Wilpon used Madoff to run the team’s finances and turned a blind eye as he negotiated deferred money into players’ contracts and then used that money to invest in high-yield fraudulent investments to make money for themselves before paying players.
The trustee, Irving Picard, also alleged at the time that the Wilpons had enriched themselves over many years of profitable investing – even outpacing the S&P 500 by 6-8% – while ignoring repeated warnings that Madoff was fudging the numbers, was fabricating false quarterly and annual statements that showed huge fictitious gains and balances, and even internal complaints from their own employees that he was committing fraud.
In addition to the millions lost in the Madoff affair, the Wilpons are currently buried waist deep in nearly three quarters of a billion dollars in debt between the team and the SNY Network which broadcasts the team’s games. A huge portion of that debt – a reported $600 million – is actually due in June of this year.
The MLB Players Association has recently opened an investigation looking into financial inconsistencies regarding offseason workouts being held at the team’s complex in Port St. Lucie. A team consultant is leasing space and then charging players who participate in a voluntary training regimen fees ranging between $1,000-$4,400 dollars.
It’s mystifying and completely logic-defying that Manfred would tap Wilpon for such an important chairmanship – one that on the surface would require someone who was supremely qualified in the areas of corporate finance and investing.
It just goes to show that the old adage is true — It’s not what you know, but who you know. Sadly, in his first official act as commissioner, Manfred looks to continue years of Selig cronyism under the guise of the best interest of the game.
