SBD/February 28, 2011/Franchises

MLB Gave Mets Owners $25M Short-Term Loan Last November

Wilpons, Katz are expected to repay MLB's $25M loan in near future
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).
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