Jeff Wilpon and the myth of a free-spending Mets winter to come
Jeff Wilpon, chief operating officer of the New York Mets, was back in the news Wednesday, about a week after he conceded the 2013 season to Mariano Rivera.
This time, Wilpon visited Binghamton, the Double-A home of the Mets. Whether this was a previously scheduled visit, or a public relations response to the Wall Street Journal piece which reported a primary factor in the Mets getting stuck with Las Vegas as a Triple-A affiliate was Jeff Wilpon, is unclear.
Wilpon was there to preach patience. He said some hard-to-fathom things about general manager Sandy Alderson taking "two or three years to get the plan into effect, and we have to see and wait it out."
Wilpon spoke the truth, but not quite in the way he intended. Waiting out Wilpon's ownership, devoid of the resources to field a good major league team, will require even more patience than Mets fans have given so far, for a major league team that's won progressively fewer games each year since 2010.
So for a fan base that has already written off 2013 as surely as its owner did, the view has turned to this winter. The hope, and increasingly, the conventional wisdom, is that with a number of large contracts coming off the books, the Mets will spend money on new talent the team desperately needs, and which isn't coming through the minor league system just yet.
The problem with this theory comes from treating the Mets, and their ability to spend money, as an independent function of the team's payroll alone. This winter promises to be far more complicated than that, and ownership's ability to spend will hang in the balance while Wilpon and his partners attempt to stave off the debt reckoning barreling toward them. Remember, this is fundamentally different than paying the annual interest on their debts, which has financially crippled the team annually, and forced things like a minority sale in March 2012, and a large loan this past winter.
So measure the impact of these two things, if you wish: Johan Santana's $31 million coming off the books, along with Jason Bay's $21 million. This is more complicated than it sounds, in terms of freed-up money, since $15 million of Bay's $21 million was deferred, the Mets just choosing to call that money part of 2013 payroll (likely to inflate the 2013 number for public consumption), while $5 million of Santana's 2013 salary was already deferred, and another $5.5 million of that $31 million is a buyout of Santana's 2014 option, not due until the end of the season. So functionally, Bay and Santana earned $32 million this season, not $52 million. How that supposedly stopped the Mets from improving the team last winter would be a mystery, absent other information.
But naturally, we have other information. And a cursory look at the obstacles ahead quickly makes thinking of how the Mets will spend this winter in terms of Bay and Santana look like the red herring it is.
Mets' ownership is still financing an enormous debt load, took another $160 million in loans against their S.N.Y. ownership stake last winter, all part of their year-by-year effort to keep the ball in the air. They owe $320 million in a loan against the team, due in June 2014. And their debt total against S.N.Y., including the new loans last winter, are up over $600 million, and due in 2015.
Getting their creditors to sign off on major new outlays of money isn't easy. JP Morgan Chase objected to the proposed deal with David Einhorn back in the summer of 2011 at first, because the original Einhorn-Mets deal put Einhorn in line among Wilpon creditors ahead of the team loan. And the same need to keep J.P. Morgan Chase happy led to the heavily deferred contract with David Wright, signed last winter, actually reducing the amount the Mets owed Wright between the date it was signed and the June 2014 due date for the team loan. It is unlikely the Wilpon and his partners would have been allowed to make the offer otherwise.
Accordingly, the Mets have seen money come off the books before, like after 2011, when Carlos Beltran, Francisco Rodriguez, Oliver Perez and Luis Castillo no longer clogged the team's payroll. Back in early 2011, Jeff Wilpon preached a single year of patience. But it's not up to him. Those creditors are why it isn't just money in, money out on payroll. It's about getting their creditors to go along with new spending.
So now consider the real winter ahead for the New York Mets owners. They have less than a year to either find a way to pay J.P. Morgan Chase $320 million, or convince the bank to give them more time. And they'll have to do so with more than just a Fred Wilpon press conference sunnily declaring his money problems a thing of the past. If the bank believes, unlike Standard and Poor's, that the Mets are on the cusp of profitability, or that a forced sale now will produce less revenue than giving ownership more time, then a stay of execution is possible.
But it's more complicated than that. Any additional time built into this loan needs to also pass muster with the group holding the more than $600 million in debt against ownership's S.N.Y. holdings in 2015. The structures of the two loans, both held by ownership's parent company, will need to be reconciled.
At that point, can the Mets spend money to sign new players? In theory, if J.P. Morgan Chase decides that an infusion of new talent is worth seeing a bunch of money go to, say, Shin-Soo Choo ahead of the bank to help turn the Mets profitable. And if the S.N.Y. creditors agree.
While all of this is resolved, one way or another, 29 other teams, flush with new television money that will put an additional $50 million in their coffers in 2014, but without the need to go through a Queen of Versailles-style gauntlet to spend, can also bid on Choo and other free agents.
So the Mets certainly have holes, between an outfield in need of three starters next season (Marlon Byrd's recent hot streak notwithstanding), possible starters at shortstop, first base, even catcher, depending on the progress and recovery of Travis d'Arnaud.
But Jeff Wilpon is right: Mets fans really need to be patient. Wilpon and his partners have lots to do before Sandy Alderson's plan can include anything like spending money on baseball players.