10:37 am Mar. 16, 20123
The last thing we heard from the New York Mets ownership group about their fight for financial survival--not counting the increasingly complicated legal portion of that fight--was Fred Wilpon's anecdotal progress report on the team's attempts to sell ten $20 million minority stakes in the team to pay short-term debts had been finalized.
The owners say they have finalized commitments for seven of the shares. Of those seven, four are from the Mets-affiliated cable network SNY, another two are from Wilpon's son Jeff and Wilpon's brother-in-law Saul Katz, and the seventh is SAC Partners hedge-fund guy Steven A. Cohen, whose real end-game appears to be buying not a minority share of the Mets, but a majority stake in the Dodgers.
A $40 million bridge loan from Bank of America, taken out late last November, is due back this month. The minority stakes would also go toward paying a past-due loan of $25 million due back to Major League Baseball, and a portion--likely at least $100 million--of the $430 million debt against the team due back in June 2014.
But while Wilpon assured reporters, yet again, that those other sales were imminent, we are now more than halfway through March without any news on that front. A spokesman for the Mets reiterated this week that CRG Partners, a turnaround firm hired by the team this winter, has yet to perform any bankruptcy preparation. But a Forbes article this weekend on Cohen included this tidbit about the Mets:
"The Mets are praying that their season ticket sales will look good enough by the end of April that they can restructure $430 million of debt due in two years. If not, two sports bankers familiar with the team’s finances I have spoken with believe it is likely the Mets will follow the Dodgers into Chapter 11."
Whether or not this includes a minority sale is unclear, just as the timetable, which has repeatedly shifted, is not currently viewed as a topic for discussion by the Mets.
But if April truly is the final chance for New York to display its financial health to its creditors, things haven't been set up particularly well.
At the moment, it doesn't look like attendance is anywhere close to even the depressed levels of 2010-2011. Many, many tickets are still available for even Opening Day, a game that routinely has sold out for the Mets in good times and bad. And Stubhub is selling tickets to seven of thirteen April games for less than ten dollars, suggesting that demand for these games is quite low as well.
So the question then shifts from whether the Mets are currently on pace to have something positive to show creditors, which they're aren't, to what they can do to turn that around. And the on-field developments don't bode well for a hot start, either.
David Wright revealed Wednesday that he has a torn muscle in his rib cage. He said all the right things about getting ready for Opening Day, but the injury is identical to the one suffered by Ryan Zimmerman of the Washington Nationals last year. Like Wright intends to do, Zimmerman tried to rehab it, failed, and ultimately had surgery on it, missing 60 games.
The Mets will also be without Scott Hairston, it appears, for the start of the season, denying the team its only reasonable backup outfielder and main right-handed power threat off the bench, and Tim Byrdak, the team's only reliable left-handed reliever. So the team's depth, a huge problem area, will be tested early, even if no other injuries strike, and Johan Santana manages to avoid setbacks from shoulder surgery.
The Mets, thanks to their greatly reduced payroll, are no longer the sort of team that can withstand injuries to their remaining good players.
Then there's the schedule. The Mets face the Phillies, Giants and Braves, all of whom finished with winning records last year. They face the greatly-improved Marlins and Nationals, both of whom are expected to finish with winning records this season. The first game that could reasonably be expected to go easier on them comes April 29, when they play at Colorado.
Just as the legal and financial battles facing the Mets appear to be an uphill climb, so too does this baseball season. Unfortunately, this isn't a coincidence.
Howard, the most troubling thing outside of the fact the Wilpons cannot pay back MLB $25 million is the fact that they have said for months the investors deals are closing. werent they originally supposed to close in December? i get that these things take time and there are delays out of your control with banks, lawyers, etc. plus with the amount of money changing hands but it is disturbing how many delays they have had on the closures of the investors.
-Scott
-Pilam76 on Twitter.
I'm constantly amazed how these people stay in business. They all seem to owe so much money, yet have the wherewithall to pay these ridiculous salaries? I almost long for the days when, if a club couldn't make a go if it, they would fold up their tent mid-season. Of course that was back in the '80s -- the 1880s.
The Wilpons should find it troubling that nobody wants to bite on their $20M minority offers (with a huge 3% interest and chance to get in for more). SNY, Jeff and Saul are insiders already. Steve Cohen is the only outsider, and he's only in for one share. He's the odds on favorite to buy the Dodgers, too, so he'll be cashing out sooner than later. These are just ponzi offerings anyway. Inject short term cash to pay the most pressing debt payments, rinse and repeat. Obviously, these guys can supposedly blindly fall for ponzi schemes, but they're having a hard time running one.