SBD/March 19, 2012/FranchisesPrint All
Mets co-Owners Fred Wilpon and Saul Katz today “reached a settlement in which they will pay $162 million to resolve litigation” with Irving Picard, the trustee in the Bernard Madoff fraud case, according to Chad Bray of the WALL STREET JOURNAL. Picard had sued Wilpon and Katz as well as their families and business associates “for more than $300 million they invested” with Madoff. As part of the settlement announced in Manhattan federal court, the Mets owners “won't have to make a payment for three years.” They will instead “surrender their claims against the bankruptcy estate.” After three years, the Mets owners will “make payments to the estate to cover any amounts not resolved by their claims.” Wilpon and Katz will “personally guarantee up to $29 million of the settlement.” Sources said that the Mets owners “couldn't afford to repay the $300 million in principal invested and later withdrawn that Mr. Picard is additionally seeking.” A loss for Picard “could have been a blow to his reputation and provide a road map for defendants in other lawsuits” (WSJ.com, 3/19). On Long Island, Baumbach & DeStefano note Picard, who “has so far recovered $9 billion for Madoff's swindled investors, wanted to claw back money the Wilpon group originally invested with Madoff, claiming it ignored red flags about the Ponzi scheme.” But Wilpon's group said that they “were also victims.” As part of the settlement, both sides “agreed not to disparage each other” (NEWSDAY.com, 3/19). The jury selection “was set to begin” today in the civil trial, and had been “expected to feature more than two dozen witnesses, including Sandy Koufax” (NYPOST.com, 3/19). Former New York Gov. Mario Cuomo, who had served as a mediator between the two sides, said, “Am I surprised that (a settlement) happened? I would have been crushed if it hadn’t happened” (SportsNet N.Y., 3/19).
WILPON ADDRESSES THE MEDIA: Wilpon today told reporters outside the courthouse, “As we’ve said from the very beginning when this lawsuit started, we are not willfully blind. We never were. We acted in good faith and we’re very pleased that this settlement bears that out. That’s very important to us.” Wilpon said he “definitely” feels his reputation has been cleared. After the impromptu press conference, SportsNet N.Y.'s Jonas Schwartz said a good reputation "was so important” for Wilpon and Katz to reclaim. Kallas said “it was important to their integrity, to their reputation and ... since the $162 million relates directly to the lost profits, it has nothing to do with the $303 million trial that was going to start today." Wilpon, Katz and their lawyers “will point out the trustee got zero" for the "willful blindness" claim. Schwartz: "In their minds -- and I think correctly -- that’s a big win for them, their character and their reputations” (SportsNet N.Y., 3/19). ESPN N.Y.’s Adam Rubin writes it is “unlikely the Wilpons would have settled unless they felt they could withstand that financial obligation without jeopardizing their ownership of the team.” Still, the Wilpons “are not out of the woods yet as owners.” It is going to “still be the Mets on austerity for a while,” and that means the Wilpons “will be utterly dependent upon fan attendance revenue in order to maintain ownership” (ESPNNY.com, 3/19).
Adding Lakers investor Dr. Patrick Soon-Shiong to a bid group for the Dodgers is the "strongest indication yet" of SAC Capital Advisors Founder Steven Cohen's "intention to present outgoing owner Frank McCourt with a final bid that reflects prominent local support rather than just overwhelming East Coast money," according to Bill Shaikin of the L.A. TIMES. Soon-Shiong is the "richest man in Los Angeles," and sources said that he has held "several meetings with McCourt since the Dodgers were put up for sale in November." Soon-Shiong had been "widely expected to join the bid group" led by Basketball HOFer Magic Johnson, from whom he "bought a minority share in the Lakers two years ago." Sources said that under the proposed arrangement with Cohen, Soon-Shiong would own an "undetermined minority share of the Dodgers." Cohen had originally submitted a bid "under which he would own 100% of the team." One source said that Cohen is "prepared to commit close to $2 billion to buy the Dodgers and renovate their stadium without financing any of that amount." AEG President & CEO Tim Leiweke also said that he has "met with Cohen to discuss the Dodgers" and is "familiar with Soon-Shiong because of his investment in the Lakers." Leiweke said that AEG has "rejected overtures to join a Dodgers bidding group but would be willing to cooperate on stadium rehabilitation." All 30 MLB owners will vote on all remaining bidders later this week. McCourt then can "conduct final negotiations with approved bidders, with the goal of selecting a winner by April 1" (L.A. TIMES, 3/19). Baseball writer Ross Newhan noted Soon-Shiong "enhances the Cohen group's ties to Los Angeles, with long-time Los Angeles based attorney and player agent Arn Tellem expected to be the club president if the group prevails" (NEWHANONBASEBALL.blogspot.com, 3/18).
BIRD'S THE WORD: FOX SPORTS' Ken Rosenthal wrote there is "just one problem" with former Cardinals manager Tony La Russa becoming a "key decision-maker for the Los Angeles Dodgers if Steve Cohen succeeds in buying the club." Baseball execs said that La Russa is "such a strong personality, his presence might diminish the Dodgers’ chances of hiring one of the top current general managers." Though the "exact role they discussed is unclear, it’s doubtful La Russa would serve as a mere figurehead." The next owner of the club "could retain GM Ned Colletti and give him the chance to operate with a payroll greater than $90 million, the Dodgers’ figure this season." But if the owner "wants his own man, an incoming GM might balk at working for La Russa, who has zero front-office experience" (FOXSPORTS.com, 3/17).
Oracle Founder & CEO Larry Ellison has "inquired about buying the Memphis Grizzlies with apparent hopes of moving the team to San Jose," according to Ronald Tillery of the Memphis COMMERCIAL APPEAL. But team Owner Michael Heisley on Saturday "downplayed the possibility of a sale -- and of a relocation, citing a lease that ties the franchise to Memphis and FedExForum" until '21. Heisley said, "I can't downplay it enough. If it happens I'll be surprised." He added that talks "had not become serious." Heisley: "My situation in Memphis has not changed a lick. My preference will always be for somebody in Memphis to buy the team. There's not any interest in Memphis. But we've always made it known that if somebody wants to buy the team, we'll listen." Ellison has made "unsuccessful attempts to buy" the Hornets and the Warriors. He has also "previously inquired about the Grizzlies over the past five years." Heisley, who is asking $350M for the franchise, "insisted that the team's contractual obligations would require consent from the city and the league" for a move before '21. Heisley also acknowledged that the Grizzlies "currently have three individuals looking to buy the team," but he noted that he "doesn't have a signed purchase agreement with any suitor" (Memphis COMMERCIAL APPEAL, 3/18).
DIFFERENT PERSEPCTIVE: In N.Y., Ben Rothenberg noted Ellison, who also owns the BNP Paribas Open tennis tournament is "ready to apply his philosophies to other professional sports." He said, "If it makes sense, I’m going to buy a basketball team. Not at a crazy price. I'm not going to set the record for having spent the most money ever in the history of the NBA for a basketball team." Ellison added, "I think there are a bunch of things you can do to make basketball better, in terms of a better experience for the fans....I think a lot of the stadiums really aren’t very good." He said, "A lot of the stadiums make no sense to me. You’re sitting so far away from the game" (N.Y. TIMES, 3/18).
All doubt about the long-term future of the Hornets over the next few weeks “will dissipate when a likely ownership consortium agrees to purchase the Hornets from the league for a sum believed to be in the neighborhood of $350 million, and thus assuming the terms of a binding lease that ensures the Hornets" remain in New Orleans at least through '24, according to Jimmy Smith of the New Orleans TIMES-PICAYUNE. Friday's announcement of a lease agreement in principle with the state is the “penultimate step in a grueling process that will end the way” NBA Commissioner David Stern and Hornets Chair Jac Sperling had planned. The NBA BOG has a regularly-scheduled spring meeting on its calendar in mid-April, and that “would be the ideal time for a sale to be approved.” Sources said that the process, “which on the surface has seemed to move along at a plodding pace, could accelerate in the coming days because of that window.” Optimally, Sperling had "hoped to simultaneously announce a new owner and a new lease agreement, but that plan was altered because the appropriation for Arena improvements had to be part of Gov. Bobby Jindal's capital outlay bill, which will be introduced in the legislature this week.” The proposal “had to be included when the bill was filed, not later amended.” Sources said that the NBA has “narrowed its potential ownership choices to two.” One group includes L.A. businessman Raj Bhathal, “partnered with San Antonio car dealer Larry Benson, brother of Saints owner Tom Benson, and former NBA coach and executive Mike Dunleavy.” Former Hornets investor Gary Chouest “is the other party the league is courting.” Sources said that they “would not be surprised if Chouest, in the end, is part of the ownership group in some capacity.” The Bhathal consortium “has courted local investors and Chouest could end up among them” (New Orleans TIMES-PICAYUNE, 3/18).
ALL SIGNS POINT TO YES: The TIMES-PICAYUNE's Smith reported the agreement “relieves the state from providing subsidies to the Hornets that could have reached $7.9 million annually if the team failed to reach certain attendance or financial benchmarks.” The Hornets' new lease is "contingent upon legislative approval of a proposed $50 million bond issue in the capital outlay bill, extension of the team's expiring Quality Jobs Tax Credit initiative and the NBA finding a new owner for the franchise.” It also “eliminates any escape clauses and will create, through capital improvements in the Arena, new avenues by which the Hornets can generate revenue on their own, such as modified or improved seating areas or digital advertising media, without leaning on the state for assistance.” Planned improvements to the Arena “will be phased in over two offseasons to be completed by the start of the 2014 season” (New Orleans TIMES-PICAYUNE, 3/17). A TIMES-PICAYUNE editorial stated the lease should “give fans peace of mind, knowing the Hornets would remain in New Orleans regardless of who purchases the team.” That alone “is a major accomplishment.” Jindal and his negotiating team, including SMG Senior VP/Stadiums & Arenas Doug Thornton and Louisiana Stadium & Exposition District Chair Ron Forman, “deserve credit for their work” as do Stern, Sperling and team President Hugh Weber. Stern had “made it clear that his No. 1 goal with the NBA's ownership of the Hornets was to keep the team here, and this proposed lease would accomplish that." Metro New Orleans residents “should be grateful for the NBA's commitment to our region.” This has “been a season of transition for the Hornets,” but the proposed lease “would go a long way toward assuring long-term stability for the team” (NOLA.com, 3/17).
STERN COMMITTED TO THE BAYOU: In New Orleans, John DeShazier wrote if Stern “didn’t want the team here or didn’t care about it remaining in New Orleans, he had an easy out after Hurricane Katrina, when Oklahoma City eagerly welcomed the relocated Hornets.” He simply could have “allowed the team to remain there … and Stern would’ve been supported by the theory that it simply wasn’t economically feasible for the team to survive in decimated New Orleans.” And few outside of New Orleans “would have vehemently objected.” But DeShazier noted Stern “vowed to do everything possible to keep the Hornets in New Orleans” and he “never did anything to exhibit a change of heart” (New Orleans TIMES-PICAYUNE, 3/17). Also in New Orleans, John Reid wrote with the announcement of an escape-proof lease that binds the team to the city through ‘24, Hornets head coach Monty Williams said that “free agents will now look differently at the franchise.” Williams: “It certainly helps us, and now we don’t have to answer that question anymore if the team is going to be in New Orleans.” He added, “When guys start asking if he can put his kids in school and buy a house, we can tell them they can, because the team is going to be there” (New Orleans TIMES-PICAYUNE, 3/18).
The expansion MLS Impact drew a crowd of 58,912 for the franchise's regular-season home opener on Saturday at Olympic Stadium, marking the "largest crowd to see a pro soccer game at the stadium," according to Randy Phillips of the Montreal GAZETTE. The game against the Fire edged the previous mark of 58,642, which was set by the NASL Manic in a playoff game in '81 (Montreal GAZETTE, 3/18). In Montreal, Jack Todd wrote the record crowd "sang, chanted, screamed and roared" throughout the game. After a "long, exhausting effort," Impact President Joey Saputo has "finally brought Major League Soccer to Montreal." Todd wrote if Saturday’s match is "any indication, we should all be sending him thank-you notes." Todd: "It’s not the Premiership, or Serie A, or La Liga. But it’s closer than you think -- and MLS is getting better every year" (Montreal GAZETTE, 3/18). In Ottawa, Richard Starnes wrote the fans were the "loudest and quite probably the most uplifting 12th man any Canadian team has ever had -- be it soccer or any other game." MLS Commissioner Don Garber said during a halftime interview that he "could not say enough about the Montreal fans." Pointing to the crowd behind the goal, Garber said, "What's sensational to me are those people. What a wonderful sight. When they move next door (to the enlarged Saputo Stadium), they will blow the roof off" (OTTAWA CITIZEN, 3/18). MLSSOCCER.com's Andrew Wiebe wrote the fans "made the occasion unforgettable, yet another golden moment for professional soccer in Canada during a period of many." Impact MF Davy Arnaud said, "It was unbelievable. They say there is going to be 50,000 or 60,000, but until you’re out there, you’re in it and you can’t hear each other, you don’t realize how special it was" (MLSSOCCER.com, 3/18). The Montreal GAZETTE's Todd wrote under the header, "Impact Gives Fans Reason To Love Soccer" (Montreal GAZETTE, 3/18).
Red Sox President & CEO Larry Lucchino "expects to be with the Red Sox for years to come," according to Nick Cafardo of the BOSTON GLOBE. While Lucchino has not officially signed a new deal, he said, "I’ve reached an understanding on it, for the most part." Lucchino added, "I love Boston. I love the Red Sox. I feel like I’ve sunk my roots pretty deeply into the community. I expect to be here for several years to come." Cafardo noted it has been "well-documented that Lucchino has a greater role in baseball operations than he did in the later years" of former Exec VP & GM Theo Epstein's regime. But Lucchino "contends that he tailors his involvement to the situation." He said, "My role varies from year to year, from circumstance to circumstance, from GM to GM, and even within a certain GM. I may have one role at the start of a term as GM and another later on. Since my first days as president and CEO of the Orioles in 1988, I’ve always had a seat at the table in baseball operation matters, and sometimes I’m more active than I am at other times. It’s a question of circumstances -- whatever the club may need." Talking about the upcoming '12 season, Lucchino said, "This is an important year for the Red Sox. ... The (two-year) playoff drought is one of the things we have to end, as is restoring the fans’ faith in our players and our commitment to winning. Also, celebrating in a fitting and suitably large way the importance of the 100th anniversary of Fenway Park, and ensuring that the new leadership meshes together." Lucchino also mentioned that he believes that MLB is "as competitive as ever." He said, "There’s a new wave of teams that are out there now, teams with sizable new TV packages, teams with new leadership and ownership. I think the AL East is a very talented and difficult division, and there are other teams which have emerged as powerhouses like Texas, the Angels, Tampa Bay, Detroit" (BOSTON GLOBE, 3/18).
TEAM OUTING: In Boston, Cafardo & Abraham noted the Red Sox "rented out the Bass Pro Shop in Fort Myers for a team outing" after yesterday's game against the Rays in Port Charlotte, Fla. The team was scheduled to have dinner followed by "competition in such events as crossbow shooting, fishing, air rifle, and kayak racing" (BOSTON GLOBE, 3/18).