SBD/February 28, 2011/FranchisesPrint All
MLB made a "short-term, $25 million loan in November to the owners of the Mets in order to shore up the team's liquidity," according to Thompson & Vinton of the N.Y. DAILY NEWS. Sources indicated that the loan is "expected to be repaid within months." The Mets in a statement on Friday confirmed the loan, saying, "We said in October that we expected to have a short-term liquidity issue. To address this, we did receive a loan from Major League Baseball in November. Beyond that, we will not discuss the matter any further" (N.Y. DAILY NEWS, 2/26). In N.Y., Schmidt & Waldstein in a front-page piece reported the Mets have "exhausted baseball's standard bank line of credit," so the additional money from MLB -- "done in secret last November -- may well have been crucial in keeping the club functioning." One baseball team exec said that the Mets "had yet to pay back the loan," and MLB Commissioner Bud Selig "had only informed baseball's executive committee of the loan last month." Schmidt & Waldstein noted the "direct intervention" of Selig is perhaps the "most striking evidence yet of the financial distress that for many months has plagued" team Owners Fred and Jeff Wilpon and Saul Katz. A source indicated that the Mets have "faced cash shortfall issues going back at least a year" (N.Y. TIMES, 2/26). The N.Y. POST's Kosman, Puma & Martin cited sources as saying that Selig "personally signed off on loaning the money to the Mets -- and that he may have approved more than $25 million from his discretionary fund." The situation reportedly has "gotten so bad that the Mets are now willing to sell up to a 49 percent stake in the franchise -- double what the owners had previously indicated" (N.Y. POST, 2/26). A source indicated that the loan is "expected to be repaid relatively quickly" (WALL STREET JOURNAL, 2/26).
CAUSE FOR CONCERN? On Long Island, Ken Davidoff cited a source as saying that the commissioner's office is "very concerned about whether the Wilpons and Katz can survive their current mess." Selig, "publicly addressing the Mets' tenuous ownership situation Saturday for the first time since the Wilpons announced their interest in selling a minority share of the club last month, refused to delve into many specifics." Selig offered only the "vaguest of hope that Wilpon's group can weather this storm." He said, "I do have great affection for Fred Wilpon, make no mistake about that. ... I have faith that somehow -- each year, you have a series of problems, and hopefully, next year, I'll have a different set of problems" (NEWSDAY, 2/27). MLBPA Exec Dir Michael Weiner on Saturday said he has "every confidence" the Mets will meet payroll this season. Weiner: "I rely upon both the assurances we received from the commissioner's office as well as the documents that we are entitled to under the basic agreement." He said that he was "not surprised by news that ... the Madoff affair had any adverse affect on the team's finances." Weiner added, "We were aware that -- and this shouldn't be a shock to anybody -- that the commissioner's office would be in discussions with the Mets about this issue" (ESPNNY.com, 2/26). Similarly, Mets officials and players insisted that news of the loan "did not make them overly concerned about the team's finances." Mets GM Sandy Alderson said, "We're focused on baseball. None of these other issues has affected any of the decisions we've made about the team." Mets 3B David Wright added, "You'd have a hard time finding half the guys in here that know about what's going on" (NEWSDAY, 2/27).
STARTING TO HURT: In N.Y., Belson & Sandomir cited a source as saying that the Wilpons and Katz "could well be limited in their ability to move money to the Mets from their other operations, including real estate and cable television -- something they have done over years to sustain the club." Without that "lifeline, the club could face daunting and immediate hurdles." A source indicated that "advance ticket sales for the 2011 season were going so poorly that a sense of panic had begun to take hold in the team’s front office." The Mets "recently initiated a broad shake-up" of their ticket operations. The longtime department head, Bill Ianniciello, "was replaced by Leigh Castergine, an executive brought in to overhaul the department in the wake of last year’s steep decline in attendance." Furthermore, a source said that the Mets "let go a handful of full-time employees in the ticket office" last week. The source added that the team "did not rehire another dozen or so part-time workers who are typically brought in to answer the phones when tickets go on sale" (N.Y. TIMES, 2/27).
WHO'S ON DECK? The N.Y. TIMES' Schmidt & Waldstein reported the efforts by the Wilpons and Katz to "sell a portion of the club have generated modest levels of interest." Fewer than 12 interested buyers have applied to MLB for the "right to examine the finances of the Mets, a necessary first step before bidding for the team" (N.Y. TIMES, 2/26). However, the N.Y. DAILY NEWS' Thompson & Martino cited a source who "disputes that characterization." The source indicated that MLB "allows only 12 applications at one time and that is the number that is currently before the commissioner's office." The source added, "There have been 30 legitimate inquiries, an unprecedented number" (N.Y. DAILY NEWS, 2/27). ESPN N.Y.'s Adam Rubin cites a source as saying that former Mets manager Bobby Valentine has "spoken with serious financial backers about lining up a bid to buy at least a portion of the Mets." Valentine, now an ESPN analyst, last night said, "I've talked to a number of people interested in purchasing part of the New York Mets, but I'm not formally with any group that is actively pursuing this venture" (ESPNNY.com, 2/28). Meanwhile, Glaceau co-Founder Mike Repole last night said he has decided not to pursue a partnership with the Wilpons "under the current circumstances of the deal." On Long Island, Jim Baumbach notes it "stands to reason" that the longtime Mets season-ticket holder, "like many other potential baseball owners, would prefer to purchase majority control" (NEWSDAY, 2/28).
Sacramento Mayor Kevin Johnson "lashed out Friday night at the Sacramento Kings ownership for failing to make good on a promise to deliver key arena feasibility documents to city representatives" last week, according to Tony Bizjak of the SACRAMENTO BEE. Johnson: "This is both frustrating and disappointing, as we believe the city deserves better. I hope this is not an indication of an unwillingness to engage with us as full partners." Kings officials Friday said that they "intend to turn some documents over" this week. Bizjak noted Johnson "already had expressed disappointment Thursday to learn second-hand that the Kings are in negotiations with Anaheim officials about a possible team move to that city" (SACRAMENTO BEE, 2/26). California Assembly member Roger Dickinson Friday said that a "local group of Sacramento-area investors should be sought to buy the Sacramento Kings and ensure that the team does not leave town." Dickinson: "It's very hard to win back public support for an ownership group that has indicated they're no longer interested in being in town." Dickinson said that local ownership "could boost prospects for financing a new Kings arena." He added that he was "not soliciting investors and was not aware of any such group coming together" (SACBEE.com, 2/25).
STEPPING INTO THE SPOTLIGHT: In Sacramento, Ailene Voisin reports Kings Owners the Maloofs, "after days of mulling whether to attend tonight's game against the Clippers" at Arco Arena, "reportedly decided to return to their courtside seats largely because of the buzz within the community." The "Here We Stay" campaign is "generating energy through social networking and organizing tonight's rally outside the arena," and the "Sac Deflated" creators from the Glass Agency, a local advertising group, "have chipped in with five static billboards and eight static signs at different locations." Voisin: "Don't believe for a second that the Maloofs aren't receptive to hugs and kisses, plants and flowers and, particularly, raucous sellout home crowds. But one sellout won't do it. Twelve home games remain." Assuming the NBA BOG grants the Maloofs an extension for notifying the league of relocation until the annual owners meetings April 14-15, Sacramento "has some wiggle room to apply the squeeze and gain some momentum" (SACRAMENTO BEE, 2/28). Voisin yesterday reported that "one reason the Maloofs were reluctant to attend Monday's game was that they were fearful of opening their mouths -- a common occurrence -- about the arena situation." NBA Commissioner David Stern "has urged them to remain mum on the topic and their local handlers have advised them to stay away from Arco because they are famously accessible and accommodating to members of the media" (SACBEE.com, 2/27).
FRUSTRATION MOUNTS: In Sacramento, Peter Hecht wrote, "Embattled and frustrated over failed attempts to build a new Sacramento arena, the Maloofs have found themselves depicted as princes of petulance, team owners who are anything but team players." Kings investor Bob Cook, who "expresses empathy for the Maloofs as he strongly opposes a move to Anaheim," said, "I'm guessing that they're very, very frustrated. They're used to getting things done and unfortunately this arena situation has been moving with the pace of a snail. I don't blame them. But it would be devastating to Sacramento, absolutely devastating financially and emotionally." Political consultant David Townsend said the Maloofs' relationship with Sacramento has deteriorated "from an incredibly wild, fun first few years into a really bad marriage" (SACRAMENTO BEE, 2/27). Also in Sacramento, Marcos Breton wrote the Maloofs, "sensitive and emotional," are "said to be furious with Johnson right now." But the "truth is, the Maloofs have never understood how Sacramento ticks and Sacramento officials have never had any success in dealing with the Maloofs" (SACRAMENTO BEE, 2/27).
NO PLANS FOR VEGAS: In Las Vegas, Mark Anderson noted the Maloofs have "strong local ties" in the city, but he cites a source as saying "nothing is going on with Vegas." With "all the new Las Vegas-area arena plans still in the conceptual stage, the Maloofs would rather look at an area two other teams ... call home" (LAS VEGAS REVIEW-JOURNAL, 2/26).
There are “two investment groups that are progressing in an effort to buy the Hawks, Thrashers and Philips Arena and will keep the Thrashers in Atlanta,” according to sources cited by Chris Vivlamore of the ATLANTA CONSTITUTION. A deal is “not close in either case as proper paperwork has not been filed to begin serious negotiations.” However, at least “one group has met with the officials from the NBA and the NHL.” One group has “one main investor with others in the group, some of whom are from Atlanta.” The group is “not only interested in purchasing the three properties but there is a ‘development element’ to the deal, possibly involving the area around the arena.” Sources said that it would “take at least a month to complete their due diligence on the proposal and at least another month to complete negotiations.” Vivlamore noted neither group is involved with Lightning Pictures CEO and Atlanta native Stephen Rollins, who reportedly was interested in the Thrashers (AJC.com, 2/25). ESPN.com’s Scott Burnside reported although there have been a “number of parties examining the ownership situation in Atlanta, it's believed the NHL is also looking at a possible relocation scenario with the Thrashers if a viable ownership group cannot be found to either invest in the team or buy it outright from current owners the Atlanta Spirit Group and keep it in Atlanta.” One of the “major drawbacks to keeping the team in Atlanta is the lack of any kind of subsidies a la Glendale that would be attractive to potential buyers.” Possible investors are “being vetted but no offers have been made for the team” (ESPN.com, 2/25).
CLOCK IS TICKING: The GLOBE & MAIL’s Paul Waldie noted the City of Glendale is “ratcheting up pressure” for the sale of the Coyotes to be finalized, but the “tactics haven’t worked and have only raised questions about whether the deal will go ahead.” The sale has “dragged on for months with no end in sight.” The NHL is “trying to sell the club for $170-million to Chicago businessman Matthew Hulsizer but the deal can’t close until Glendale completes” a $116M bond offering (GLOBE & MAIL, 2/26). NHL Deputy Commissioner Bill Daly said that the league “has established no deadline for the sale of the bonds.” Sources indicated that they “expect the deal will close, just not as soon as had been anticipated.” ESPN.com’s Burnside noted while the league “may not have imposed a deadline, the reality remains that the NHL does not have infinite patience with the City of Glendale.” The league “has a number of ownership balls in the air and a resolution in Arizona, one way or another, is believed to have a direct impact on how the NHL proceeds in other markets.” If the bond sale “does not begin in a timely fashion, the NHL at some point will move to exercise its right to relocate the team.” If that happens, sources said that the $25M Glendale committed to the NHL to cover operating losses this season “would be lost, as would the anchor tenant in an arena built with government funds” (ESPN.com, 2/25).
In San Diego, Bill Center reports the Padres have "agreed to terms with the final unsigned players on their 40-man roster," bringing to $43M the "amount the Padres will owe their Opening Day payroll in 2011 -- up from" about $39M last season. The team's "total projected payroll budget" for '11 will top $45M. Also, Padres Vice Chair & CEO Jeff Moorad is "finally close to divesting himself of his stake" in the D'Backs, "more than two years since he began his installment purchase of the Padres." The transaction, which MLB Commissioner Bud Selig "confirmed Saturday was essentially done, provides for Moorad to sell" his estimated 12% of the D'Backs to the club's current partners. Moorad indicated that he has "not yet established a firm timetable to purchase the remaining Padres' shares held by John and Becky Moores" (SAN DIEGO UNION-TRIBUNE, 2/28).
PITT & THE PENDULUM: Pirates President Frank Coonelly on Friday sought to clarify comments he made recently "about the correlation between increased payroll and attendance." Coonelly said, "I answered a specific question with an honest and obvious answer. Our gate receipts are among the lowest in baseball, but we have never blamed our fans for this fact. It is our doing, it is our fault. The onus to improve is on the club, and we are not asking for more support without demonstrating that we have a competitive on-field product" (PITTSBURGH POST-GAZETTE, 2/26). But in Pittsburgh, Gene Collier wrote, "In a division where the average payroll last year was $97.2 million everywhere but in Pittsburgh, the Pirates are the guy walking around with two olives in his pocket and seem perfectly unperturbed by it." Coonelly's comments indicate that the Pirates "will continue to be the culinary equivalent of lint-covered olives unless attendance spikes fairly considerably" (PITTSBURGH POST-GAZETTE, 2/27).
STRANGLE HOLD: ESPN’s Buster Olney reported MLB deemed it “not acceptable” for the Dodgers to take out a $200M loan from Fox because the team already has “so much debt.” MLB cannot force Dodgers Owner Frank McCourt “to sell the team, but what they can do is essentially cutoff his avenues to get funding from other places, other investors, and that seems to be what's happening here.” Olney: “Slowly but surely, it seems like Frank McCourt's ownership of the Dodgers is being strangled" ("Baseball Tonight," ESPN, 2/25).
MAKING A LIST, CHECKING IT TWICE: USA TODAY's Bob Nightengale reports the Brewers have set up work stations at their Spring Training Facility in Phoenix "where players meet and talk with members of the Brewers' extended front office." No player is "permitted to leave until his orientation worksheet is signed by each department." As part of the effort, Brewers Senior Dir of Marketing Kathy Schwab and Senior Manager of Advertising & Marketing Caitlin Moyer "talk about their plans with each player," and even "discuss commercials with a few" (USA TODAY, 2/28).
BRONX BOMBER: In N.Y., Bob Raissman wrote Yankees co-Chair & General Partner Hank Steinbrenner is a "different kind of cat," someone who is "unpredictable, zany." Steinbrenner's "revenue sharing rant was nothing original, but it did upset Bud Selig, who frowns upon such talk." But Steinbrenner is "officially liberated," and this "actually can be a terrific thing for the organization." He could "put some pop" in YES Network programming (N.Y. DAILY NEWS, 2/27).