SBD/February 2, 2011/Franchises

Mets Reportedly Want To Sell Minority Stake By June To Aid Cash Flow

Katz, Wilpon met with Bud Selig and other MLB officials to discuss Mets' finances
The Mets "hope to complete the sale of up to a 25% stake by the end of June" as team ownership "seeks funds to make up for a potential settlement related to investments" with Bernie Madoff, according to a source cited by Futterman, Rothfeld & Bray of the WALL STREET JOURNAL. Fred Wilpon and Saul Katz met with MLB Commissioner Bud Selig and other league officials yesterday in "what was described as an effort to update Major League Baseball on the Mets' financial problems and the owners' plans to sell a minority stake in the team, which they revealed Friday." Sources indicated that they "discussed the Mets owners' exposure from a lawsuit by the court-appointed trustee gathering assets for victims" of Madoff's Ponzi scheme (WALL STREET JOURNAL, 2/2). Baseball officials contend that yesterday's meeting was "arranged weeks ago" and was not "characterized as some sort of emergency summit as the Wilpons work to maintain their controlling interest in the Mets" (NEWSDAY, 2/2).

MORE THAN MEETS THE EYE? On Long Island, Neil Best notes while the Wilpons have stressed that the family's "roughly two-thirds stake in SportsNet N.Y. is not for sale," industry execs believe that it "will be difficult to get top dollar without including the profitable regional sports network, or perhaps an interest in Citi Field." Former MLB Rangers Minority Owner & President Michael Cramer, now Dir of the Texas Program in Sports & Media at the Univ. of Texas, said, "There is no chance I would buy into the Mets without SNY -- none, zero, zip -- it just wouldn't happen." SportsCorp President Marc Ganis: "I'd be surprised at the end of the day if the other core assets are not included in some manner." Best notes SNY is "believed to take in more than $300 million per year in fees from cable, satellite and phone company providers even before selling ads" (NEWSDAY, 2/2). Cramer said, "This could easily morph into a majority stock interest sale or a full sale." He added that "having a franchise that might approach $1 billion in value puts the Mets 'in the stratosphere'" for MLB. NEWSDAY's Best notes that price tag "could make it less practical to find multiple minority owners" (NEWSDAY, 2/2).  But former Mets 1B Ed Kranepool yesterday confirmed his interest in becoming part of a Mets ownership group and said, "I'd be crazy not to seek this opportunity." Kranepool has aligned himself with Martin Luther King III, Vobile President of Cable & Sports Larry Meli and entrepreneur Donn Clendenon Jr. Kranepool said that "it's 'premature' to talk too specifically about the group, saying only that King's attorney will be the front person in terms of contacting Steve Greenberg at Allen & Co., who is handling the process for the Wilpons." He insisted that the "financial end would not be an issue" (NEWSDAY, 2/2).

STAND BY YOUR METS: Mets GM Sandy Alderson conceded last night that without Selig's "urging, he probably wouldn't have even applied for the position or left his previous job with MLB." Alderson revealed there is no "out" clause in his contract based on a change in Mets ownership, but added he is "not at all expecting" the Wilpons to sell a controlling interest in the franchise. Alderson also said "there was a little bit of an overreaction" to his contention that the Mets' payroll for '11 was too high (N.Y. DAILY NEWS, 2/2). Alderson yesterday "described the Mets as holding their breath in waiting to see how the Madoff mess shakes out." He said, "There are a lot of things that can have some impact, positive or negative, going forward. But I honestly don't think it's going to affect us in a substantial way" (NEWSDAY, 2/2).

THE TIES THAT BIND: In a front-page piece for the N.Y. TIMES, Kovaleski & Waldstein report interviews with current and former associates of Wilpon and Katz, as well as former employees of the Mets and of Madoff, "make it clear that the relationship was substantial and that the role Mr. Madoff played in the financial life of the ball club and the Wilpon and Katz families was pervasive." New York attorney Jerry Reisman said, "It was reciprocal, symbiotic. They both relied on each other for money, and Bernie also relied on Fred for contacts." Former Mets employees said that "substantial aspects of the club’s financial operations seemed to flow through, or wind up with, Mr. Madoff -- annuities set up for players, cash generated by sponsorship deals, and more." Kovaleski & Waldstein report when the Mets "negotiated their larger contracts with star players -- complex deals with signing bonuses and performance incentives -- they sometimes adopted the strategy of placing deferred money owed the players" with Madoff's investment firm. They would "have to pay the player, but the owners of the club would be able to make money for themselves in the meantime" (N.Y. TIMES, 2/2).
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