SBD/March 3, 2011/Franchises

Mets Owners Could Face More Charges If They Fail To Settle Madoff Suit

Fred Wilpon could ask for more financing help from MLB
Mets Owner Fred and Jeff Wilpon and Saul Katz, already facing a $1B lawsuit from their ties to Bernie Madoff, are "expected to face additional allegations from a court-appointed trustee about how they may have benefitted from the multibillion-dollar Ponzi scheme if they fail to reach a settlement," according to a source cited by Futterman & Rothfeld of the WALL STREET JOURNAL. The trustee, Irving Picard, and the Mets owners have been "mired in an acrimonious dispute." Sources indicated that lawyers for Picard "have told the defendants that if they don't reach a settlement, they will add additional allegations by a March 18 legal deadline." One of the sources said that Picard's "amended complaint would include new allegations about amounts of investments with Mr. Madoff by the Mets owners and associates at their real-estate firm, Sterling Equities Associates." Today, the Wilpons and Katz "will be among the investors facing off" with Picard over his "refusal to honor the final statement balances of investors in the Ponzi scheme." Futterman & Rothfeld note the "behind-the-scenes tussles come as the owners of the Mets step up their efforts to sell a minority stake in their franchise." Sources indicated that within the next two weeks, MLB is "expected to approve about 14 individuals and groups to bid for the franchise." Sources added that team owners, who "previously said that they are seeking a single individual or partnership to purchase as much as 25% of the franchise, would also consider selling a series of minority stakes in the coming years." The sources contend that the Wilpons and Katz "need to raise between $150 million and $250 million to finance the operations of the franchise for the next two years and lower its debt" (WALL STREET JOURNAL, 3/3).

HELP IS ON THE WAY? On Long Island, Steven Marcus cites sources as saying that the Mets "could get financial help" from MLB, "if needed, before a partial sale of the club is completed." The team borrowed $25M from MLB in November "to cover operating expenses." A person monitoring the team's efforts to sell a minority stake in the franchise said, "There may be a 30-day period before a deal is closed where funds (from MLB) could be advanced. That would then be repaid with funding from the (new) partnership." A source indicated that MLB "will evaluate any future Mets loan request on a circumstantial or case-by-case basis, as would be the case with any team" (NEWSDAY, 3/3).

IN THE ON-DECK CIRCLE: In N.Y., Lattman & Sandomir reports a group that includes Rays investor Randy Frankel "has shown interest in buying a share of the Mets, becoming one of about a dozen serious investors to emerge." Along with other interested bidders, the group "has paid a nonrefundable $25,000 application fee to Major League Baseball for permission to see the Mets’ financial records." Global trading company BTIG co-Founder Steven Starker "is the main investor in the group," which also includes Frankel, Marquis Jet co-Founder Kenny Dichter and Doug Ellin, creator of HBO's "Entourage." Sources said that Frankel "would sell his share in the Rays should his group’s bid for the Mets be successful." A source indicated that another investment group led by SkyBridge Managing Partner Anthony Scaramucci "has also submitted an application" to MLB. Contrary to reports, Scaramucci's group "does not include" former Mets manager Bobby Valentine (N.Y. TIMES, 3/3). Scaramucci said, "I'm not going to confirm or deny what's going on in the paper. But here's what I will say: I think that the press has been horrific to my very close personal friends, the Wilpon family. They've been unfair. They've mischaracterized what's gone on with them, and I think in the coming weeks we're going to see some really good news as it relates to the Wilpon family" ("The Strategy Session," CNBC, 3/2). Meanwhile, Mavericks Owner Mark Cuban yesterday said that he is "not involved with any of the groups that have filed paperwork" with MLB to view the Mets' books (NEWSDAY, 3/3).
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