SBD/February 7, 2011/Franchises

Wilpon's Ownership Of Mets Further In Doubt Amid Ongoing Madoff Lawsuit

Wilpon may have to expand his offer to sell a minority stake in the Mets
Fred Wilpon's ability to hold onto the Mets was "cast into more doubt Friday when a lawsuit filed by the trustee in the Bernard L. Madoff fraud case was unsealed and revealed in vivid detail the depth of Madoff’s involvement in nearly every aspect of Wilpon’s empire, particularly his team," according to Richard Sandomir of the N.Y. TIMES. The financial pressure on Wilpon “will now continue to mount, and his preference to sell 20 to 25 percent of the Mets to alleviate the strain, a plan that he announced a week ago, may not turn out to be enough of a remedy.” David Sheehan, the lead lawyer representing Madoff trustee Irving Picard, said that "'the entire [Saul] Katz-Wilpon enterprise' was being looked at as assets that could be used to resolve the lawsuit.” Sheehan: “What the trustee is looking for here is a payment in cash. So whether they utilize the Mets, SNY, Sterling properties or any other resource is of no moment to us. What we’re looking for is a billion dollars, and unless we settle for less than that, which we’re not inclined to do, where they get the money is of no moment to us.” Former MLB Commissioner Fay Vincent said, “It looks like a very messy situation for Fred. I know Picard and he’s a serious and solid lawyer, and what he’s doing has to be taken seriously.” Forbes Exec Editor Michael Ozanian believes that Wilpon “would have to sell the team and the SNY television network ‘to get out of this mess.’” The Mets, Citi Field and SNY “have considerable debt -- about $1.5 billion in all by some estimates.” Analysts said that there “might not be enough money available to Wilpon to settle with Picard and make bond payments, including $52 million a year for the stadium.” The Mets also have “hit their limit on borrowing” from MLB’s credit line (NYTIMES.com, 2/4). 

BUYER'S MARKET: Wilpon and Katz in a statement Friday said, “We are now seeking one or more strategic partners in the New York Mets specifically because of the uncertainty created by the lawsuit” (WALL STREET JOURNAL, 2/5). New York Univ. sports management professor Robert Boland thinks that “a minority owner actually might be more willing to come forward now, viewing the lawsuit as a path to take control if the Wilpons lose big.” But industry experts said that the “key remains whether the Wilpons are willing to include a ‘first right of refusal’ clause, which gives the potential limited partner the legal recourse to match whatever price the Wilpons get if they ever do decide to sell their majority stake” (NEWSDAY, 2/5). The N.Y POST’s Kosman & Bennett wrote it is “time for someone new to meet the Mets.” There is “no way Fred Wilpon can keep his grip on the team with a billion-dollar lawsuit hanging over his head.” A source said Wilpon "can’t settle." The source added that he “doesn’t have the money” (NYPOST.com, 2/5).

TIME TO BID ADIEU? In N.Y., Mike Vaccaro wrote under the header, “Wilpon Should Step Away From Broken Mets.” Vaccaro: “The Mets are broken. And need to be fixed.” The “more you read the unsealed lawsuit,” the “more it became apparent that the Mets -- and that still means Fred Wilpon -- are guilty of either one of two things: Corruption. Or gullibility” (N.Y. POST, 2/5). The Nation's Dave Zirin: "If you ask most New York Mets fans, and I have to say I count myself as one, the best scenario would be the Wilpons making a graceful exit" ("Nightly News," NBC, 2/6). ESPN N.Y.’s Ian O’Connor wrote, “It isn’t fair to assume the Wilpons are guilty of anything but managing their investments the same way they’ve managed the Mets. By putting their money in the wrong horse, time and time again” (ESPNNY.com, 2/5). The N.Y. Daily News' Andy Martino said as long as the Madoff lawsuit is "hanging over the Mets, everything that they do, fairly or unfairly, will be viewed under that lens." Martino: "Anything in baseball operations, the pubic is going to want to know, 'Does this have to do with your lawsuit?'" ("Daily News Live," SNY, 2/4).

WORK IN PROGRESS: In N.Y., Bill Madden noted MLB Commissioner Bud Selig has indicated that he will retire in ’12, but if Selig “didn't need any more reason to continue on in the job he's held since 1992, he's now got four clubs in extreme duress, including two of baseball's signature franchises, the Mets and the Dodgers.” It is “ownership issues that plague the Mets and Dodgers and venue issues that threaten the viable existence” of the Rays and A’s. For Selig, “consumed as he is with his legacy, to walk away from baseball with the futures of these four clubs unresolved is unthinkable.” Even if the Mets' owners are “successful in defending themselves," their "prospects of being able to hold onto the team appear gloomy." Meanwhile, sources said that Selig wants Dodgers Owners Frank and Jamie McCourt “out,” and he “already has more than a half-dozen prospective local buyers lined up to liberate" the team (N.Y. DAILY NEWS, 2/6). Former MLB Rangers Minority Owner & President Michael Cramer, now Dir of the Texas Program in Sports & Media at the Univ. of Texas, said the Mets are a “critical piece” of the league and regardless of the relationship Selig has with Wilpon, “he’ll do what’s best for baseball” (“OTL,” ESPN, 2/4).
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