And now, the Mets' rebuilding plans depend on JPMorgan Chase

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Jeff and Fred Wilpon. ()
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The New York Mets' media blitz on Monday, in conjunction with extending the contract of manager Terry Collins, produced the kind of headlines the team was presumably hoping for.

"Terry Collins officially back, and Mets seem ready to spend," and "Alderson: Mets set to spend this offseason" and "Jeff Wilpon, Sandy Alderson say it's time for Mets to stop talking and start winning."

And why not? As Alderson pointed out on Monday, the Mets have $25 million in salary commitments for 2014, David Wright's $20 million and Jon Niese's $5 million. Even if they bring everybody back who is arbitration eligible, that's another 11 players, at an estimated $22.3 million. That's just north of $47 million. 

And back in June, Alderson said the Mets should have a $90-100 million payroll, so the team could add "enough to be competitive because we can use the money on position players, which is our problem right now.”

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Soo what's the holdup?

Oh, right. The crippling debt.

The New York Post reported on Tuesday that Fred Wilpon and his partners are reaching out to banks now, attempting to re-finance the $250 million loan due against the team in June 2014 without having to pay any more of the principal due.

There's some really useful information within that news, so let's break it down.

For one thing, it allows us to account for that $160 million the Mets owners got last winter, borrowing from the last bit of equity they had in their ownership stake of S.N.Y. Annually, the Mets have been servicing their debt to the tune of roughly $90 million, between the loan against the team coming due, the loan against S.N.Y., now greater than $600 million, due in 2015, and the twice-annual debt balloon payments on Citi Field.

That the other $70 million went toward paying down that loan, from $320 million to $250 million, means the last of the money is almost certainly gone.

The Post also reported that the Mets lost only $10 million in 2013, down dramatically from the $70 million loss in 2011. But that difference of $60 million is a reflection of decreased payroll spending, not of increased revenue. (The Mets have seen revenue drop significantly over the past few years, thanks to fielding a team degraded by lack of resources.)

Now, the Mets have a winter to survive without selling minority shares in the team (been there, done that), or by tapping their equity in S.N.Y. (also been there, done that). It is noteworthy that when they did the latter last winter, they managed to get only an additional $160 million, even though the value of S.N.Y. doubled from $1 billion to $2 billion since the Mets owners originally borrowed $450 million against it back in 2010. It is also noteworthy that during this re-financing, the term of the loan didn't change: it's still coming due in 2015.

But first the Mets need to get past that $250 million due next year. Whether they can is entirely up to JPMorgan Chase, which essentially needs to weigh things like whether by delaying, they stand a better chance of getting their money, or if they are better off forcing a sale now, when they are at the front of the line, chronologically. This seems to matter to JPMorgan Chase, as it did both when they refused to let David Einhorn ahead of them in the repayment line during negotiations in the summer of 2011, or by forcing the Mets to reduce the amount due to David Wright between the day he signed his extension and June 2014.

Hypothetically, they could give up this chronological position, and also determine that delaying without asking for any principal is best, and even be comfortable with the Mets spending on free agents this winter to help improve the chances of the Mets becoming profitable again. But there's been no indication that they're happy to do any of these things before now, which has led to the years of austerity.

There's another problem, beyond even getting the loan refinanced, extended, and avoiding any principal payment: the Mets' owners then need money to spend on the team. Remember, they've managed to cover team losses and finance their debt, not with incoming capital each of the past two years, but by selling the asset of minority shares for 2012, and borrowing against S.N.Y. for 2013. With these options closed to them now, exactly how they raise the money to cover any 2014 losses, let alone finance their debt, remains another problem to solve.

And once that's taken care of, then, and only then, can they conceivably move forward with some kind of budget for 2014. Every dollar spent on a free agent might well be a dollar ownership needs to cover losses and debt service, just as has been the case in prior winters, but without the infusion of capital from minority share sale or additional loan against S.N.Y. It's all got to come from somewhere.

It's been darkly amusing to watch the Mets, 18 months after the trustee suing them determined they were circling the financial drain, make statements of good financial health absent any change or reason to believe them, even within the context of taking basic steps merely to survive. They've done so again. Now it'll be up to the good people at JPMorgan Chase to determine how closely those statements can hew to reality.

It isn't any wonder that the vision of competitiveness back in June from Sandy Alderson has given way to this kind of hazy conversation. We want to believe their promises. But what the Mets do won't necessarily be up to them.