The Wilpon group still has Bud Selig, at least
It's hardly been a good off-season for Fred Wilpon and his partners.
Back in December, the Mets owners acknowledged taking on another $40 million in debt, a bridge loan from Bank of America, to pay an approximately $25 million debt due on Citi Field and other offseason expenses.
With approximately $1.5 billion in combined debt on the team, their television network and their stadium, and little reason to expect a turnaround in revenue anytime soon, Standard and Poor's reduced their rating on the stadium's bonds to a step below investment grade with an outlook of "negative."
And last week, the team acknowledged hiring CRG Partners, a turnaround firm, though it did not elaborate on why it did so, other than to deny that the company had been brought in to “provide bankruptcy services."
Add to that the difficulties finding any takers for the ten minority shares in the Mets that Wilpon and his partners are trying to sell for $20 million apiece, necessary simply to raise capital for the upcoming year's debt service and operating expenses, and the upcoming March trial in the $386 million lawsuit brought against Wilpon and his partners by the trustee for the Bernie Madoff victims.
In these circumstances, Fred Wilpon could sure use a friend.
That's why Tuesday's news that Major League Baseball commissioner Bud Selig, who'd previously said he'd retire in 2012, is staying on for at least two more years is such a positive development for the current Mets ownership group. Selig can't necessarily save them from having to sell the team, but his presence in the commissioner's office, and the actions he's taken, have already prolonged their tenure. In fact, Selig's actions went a long way toward enabling Fred Wilpon to gain outright ownership of the Mets in the first place, according to Wilpon's former partner, Nelson Doubleday.
Flash back to 2002, when Doubleday and Wilpon, each of whom owned 50 percent of the team, were negotiating a deal that would allow Doubleday to cash out and Wilpon to take full custody of the Mets. In an effort to determine a fair price, Doubleday and Wilpon let Richard Starkey appraise the value of the team, an appraiser recommended by Selig.
Though the two had received an offer from Cablevision that valued the team at $500 million the year before, and Forbes put the Mets' value at $482 million, Starkey came back with a value of just $391 million. Doubleday cried foul, Wilpon sued, Doubleday countersued, but Doubleday eventually settled, bound by his agreement. To rub salt in Doubleday's wounds, the Red Sox wound up being sold that same year for approximately $700 million.
Selig and the commissioner’s office have stood by Wilpon over the past few years as well. After Wilpon's group used up their entire line of credit with M.L.B., the league provided another $25 million loan due back last year. When Met ownership failed to pay it back, M.L.B. simply extended the due date on the loan.
The reassurances from Selig about Wilpon reached their absurd extreme during the playoffs this past October, when Selig said: "I don't have any concerns. I've talked to Fred a lot about it, and they seem to be making good progress at what they're trying to do. He feels comfortable with it, and I really don't [have concerns] at this point. They've made no demands or anything. They seem to be moving along in the right path."
In his very next answer, he said there was no timetable for the Mets to repay the loan, nor had he even spoken to Wilpon about it. Exactly how Wilpon reassured Selig about the loan without specifying how or when it would be repaid isn't clear.
This isn't just about Selig's feelings. Based on his judgment that they "seem to be moving along in the right path," the commissioner is allowing the Mets to continue operate in violation of the maximum amount of debt allowed for a franchise. That in itself is not a unique circumstance: Nine of M.L.B.'s teams were in violation of that rule as of last June. But when one of those teams, the Los Angeles Dodgers, was forced to take out a $30 million loan simply to make payroll, the league ordered the team's owner to sell.
It is fair to wonder what payments the Mets might have missed absent that $25 million from M.L.B., or what payment they would miss if M.L.B. at last demanded the past-due loan be repaid. Fortunately for Fred Wilpon, the man who will be in charge for a while longer doesn't seem inclined to find out.