Mets reportedly get cash from cable network, with details to come

The mayor, Mr. Met and Fred Wilpon. (Dana Rubinstein)
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Fred Wilpon and his partners, owners of the New York Mets, have completed a refinancing of their debt against their regional sports cable network SportsNet New York, according to the New York Post.

SNY is ownership's final profit-generating asset, and only apparent source of untapped collateral.

The details of the deal weren't shared with the Post, so what it means for ownership's hold on the team, or its ability to spend money on payroll, isn't clear yet. The asset is formidable, but Wilpon and his partners have many needs at the moment.

Essentially, ownership is leveraging its 65 percent stake in SNY, the sports network which holds a long-term deal to broadcast Mets games.

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That's a big deal. By comparison, during its recent sale, YES, the New York Yankees' equivalent, was valued at just over $3 billion. Even conservatively placing an SNY value at $2 billion, a 65 percent stake in the company should theoretically produce $1.3 billion in value to borrow against.

However, the 65 percent isn't held free and clear. The Wilpon group had already borrowed $450 million against it, with that money due back in 2015. In the event they chose to sell the stake, Comcast/Time Warner, the minority partners in SNY, have right of first refusal on it. That limits how much a majority stake would earn in any sale, compared to simply putting it up for highest bid.

Nor is the SNY loan the only major debt hurdle facing Wilpon and his partners. They still owe approximately $320 million in debt against the Mets, with that loan due back in 2014.

Then there is the small matter of getting through 2013. Financial losses were mitigated somewhat last year by a huge slashing of team payroll, but the Mets still ended up in the red. If the team debt has simply been absorbed in SNY debt, the interest on one debt disappears but balloons on the other, meaning the interest payments haven't gone anywhere. And there's still two debt-balloon payments due annually on Citi Field, one in June and one in December, with less expected revenue available to cover them, according to Standard and Poor's.

So the key questions about ownership's ability to hang on and field a competitive baseball team that need to be answered are: Did the refinance eliminate that $320 million due in June 2014? Is the presumably far larger debt against SNY still due in 2015, or has that due date been pushed back as well? And in the meantime, is there enough money left over in the refinance to pay day-to-day expenses and service ownership's ample debt, and if so, for how long?

The annual debt service will be helped dramatically by Major League Baseball's new television contract, which puts approximately $50 million in new annual revenue into every owner's pocket beginning in 2014. But it's still not clear how the Mets can meet their coming debt obligations in the next two years, having cashed out their final asset.

It could be that Wilpon and his partners are just playing for a bit more time. Or, if this deal gets them something more than that, maybe they can buy themselves an outfield, too.

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