12:57 pm Aug. 17, 20121
Without the financial assistance of Major League Baseball, Fred Wilpon's tenure as owner of the New York Mets would almost certainly have ended by now.
After exhausting its line of credit with the league to help weather a debt-related storm brought about by ownership's Bernie Madoff-related holdings, the Mets asked for, and received, another $25 million loan from Major League Baseball at the end of November 2010 to help meet a December payment on Citi Field bonds.
The loan was to be paid back by the end of the 2011 season, according to both M.L.B. and the Mets. When it wasn't, M.L.B. simply pushed back the date of the loan. Finally, once the Mets secured $240 million in minority partnership money, M.L.B. was paid back.
Five months later, the Mets are taking in even less revenue than they did in 2011, a year in which the team lost $70 million. The short-term and long-term debts faced by ownership are as daunting as ever, with some significant bills due in the immediate duture, and some of the largest loans coming due in less than two years.
But if Fred Wilpon and his partners are to survive another winter in charge of the Mets, it appears they'll have to do it without M.L.B.'s help this time.
"I can't imagine that we would be providing such assistance," M.L.B. executive vice president of economics and league affairs Rob Manfred said in an email Friday, when asked if M.L.B. would be a source of any financial assistance for the Mets over the remainder of 2012.
Manfred also confirmed that the Mets haven't received any financial assistance from Major League Baseball since March 2012, when the loan was repaid.
In other circumstances, this would be good news: Teams that don't need financial help, after all, wouldn't have received any from Major League Baseball.
But the Mets are going to need additional money from somewhere. The $240 million they received from selling off minority stakes in the team back in March is already accounted for: at least $110 million to pay off a portion of what was a $430 million debt against the team due in 2014, $25 million back to M.L.B., $40 million to pay off a bridge loan from Bank of America that allowed the team to pay operating expenses last winter, at least $43.7 million in bond payments on Citi Field due in June and December, a revenue-sharing bill due to M.L.B. that totaled $20 million in 2011, $20 million in interest on a $450 million debt against S.N.Y. due in 2015, and at least $20 million in interest on the remaining $320 million or so in debt against the team.
Depending on the team's losses this season, that puts the end of the $240 million right around the December payment against Citi Field. And ownership still faces the very same cash crunches in 2013 on a money-losing team, interest against the large debts on the team and S.N.Y., and Citi Field debt payments as well.
That leaves Wilpon and his partners with few options: essentially, hope the debtholders give him more time, even if he cannot make a payment on even the interest on his debts, or find another source to loan him money to pay the financing on his already outstanding debts.
The chances of this happening were viewed as dim by the trustee for the Bernie Madoff victims, Irving Picard, back in March, leading him to settle the case for effectively nothing, rather than pursue his guaranteed floor of $83 million awarded to him in summary judgement prior to the trial date.
As Picard wrote in an affidavit filed at the time of the settlement: "Based upon financial information provided by Defendants since the [agreement], and on the advice of my counsel, we have become satisfied that Defendants' cash flow and lender covenants would not have enabled me to recover more for the BLMIS customer fund in the forseeable future by litigating to the point of judgment."
In other words, this wasn't an educated guess. This is the state of things according to Wilpon and his partners themselves, and fully verified by the trustee.
The Mets politely declined to comment on the question of whether they'd be trying to lobby M.L.B. for any additional funds.
In the meantime, the owners are left to utilize what may turn out to be commissioner Bud Selig's last gift to the franchise—the 2013 All-Star Game—to try and spur season ticket sales. The Mets have been heavily promoting the chance to purchase tickets to the game and surrounding events as a perk for season ticket holders, while moving the renewal date for current holders ahead several months compared last season, to August 31.
How that pursuit turns out, along with ownership's ability to persuade their debtholders for more time, will determine whether the Mets' cash crunch becomes a critical one. Because it looks like the league, at least, won't be throwing them any more lieflines.