SBD/March 10, 2011/Franchises

Mets Owners Faced Financial Pressure Before Madoff Lawsuit

Mets suffered a nearly 20% decline in attendance at Citi Field in '10
Public financial documents and interviews suggest that the Mets "may well have needed the proceeds from selling part of the team regardless" of the lawsuit brought against the team's owners by Irving Picard, the trustee in the Bernie Madoff case, according to Sandomir & Belson of the N.Y. TIMES. The reasons in many cases were the "result of bad timing and unforeseen circumstances, including an economic downturn that coincided with the opening of the Mets' new stadium in 2009 and a rash of player injuries that sank the team on the field and disillusioned fans." Revenue from "about 10,600 club seats and suites and from advertising and concessions dedicated to paying off the Mets' new $800 million home, Citi Field, fell tens of millions of dollars short of forecasts made just two months before the season began in 2009." That was followed by a "nearly 20 percent decline in attendance in 2010 and a resulting slide in revenue that was compounded by an increase in stadium bond payments." However, Mets Exec VP & General Counsel David Cohen this week "maintained that the size of the lawsuit was what really motivated the hunt for a partner, not any financial pressures." Cohen: "The decision to seek minority investors was not related to any intermittent fluctuations in revenue." Sandomir & Belson note in February '09, the Mets "estimated in a financial disclosure document that Citi Field would generate" $224M. Yet revenue that season fell "well short" at $180.4M. The way sponsorships are booked "accounted for about $7 million of the difference in revenue, but the gap was still large." The figures for '10 are "not yet available," but it "seems improbable that things went appreciably better for the Mets." At the "same time that ticket sales were slipping last year, the Mets' payments on their tax-free bonds more than doubled" to $43.7M from $19.1M in '09. Still more is due on $65M in taxable bonds that had also been used to build the ballpark (N.Y. TIMES, 3/10).

RARE AIR: In N.Y., Kosman & Robbins report the Mets are "telling suitors they are expecting to raise $200 million for a 25-percent stake in the team, valuing the franchise at about" $1.3B. That would make the Mets "almost as valuable as the Yankees, which Forbes says are worth" $1.6B. The valuation is "based on taking the $200 million sale price, multiplying it by four and adding the team's $500 million in debt." However, a Mets source "denied that price expectations have been mentioned, saying they will be addressed after the groups are certified" by MLB (N.Y. POST, 3/10).
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