The minor league players have left the clubhouses and the major league season is heading towards the playoffs. There’s plenty of coverage here from the other writers regarding what will go on in October, so I’m going to move down to the end of the dugout and revisit a subject I wrote in length about on my old blog.
It’s important for every fan to fully understand the current financial situation of the Mets. We’re not talking about the Bernie Madoff mess, which is old news for the bean counters on Roosevelt Avenue. No, this is a ‘money in, money’ out analysis of a business that is currently prevented from competing against their competition who have more assets rather than debtors.
For starters, I ask all of you to read Howard Megdal’s outstanding e-book, “Wilpon’s Folly: The Story of a Man, His Fortune, and the New York Mets”. Click on the link to purchase at Amazon. As a Mets fan, it’s the best $10 you can spend.
My credentials to write this series of posts are simple: I held various positions in my 32-year broadcasting career including managerial positions for radio stations in New York City, Philadelphia, Pittsburgh, and Dallas-Ft. Worth. I was VP-broadcast liquidation/acquisitions for GE Capital, Executive Vice President of Sales for Capstar Broadcasting, and owned and operated seven of my own radio stations under two companies.
I understand business and was well known as a ‘workout artist’ similar to the kind of work Mitt Romney did for Bain Capital. My job was simply… turn a profit and set up a business for a resale in a flourishing economy. This made me and my partners a lot of money during good times, and cost us everything twice, first in the 80s, and lastly, this past slowdown. People like me don’t have pension plans. We double down and eat dinner at The Palm when things are good (or, as in the case of this Labor Day, I had two hot dogs and some old salsa dip that was turning in the refrigerator).
Fred Wilpon bought a one-percent stake in the Mets in 1980, when Charles Shipman Payson sold the team, with Doubleday & Co. holding the remaining interest. In 1986, Doubleday president Nelson Doubleday, Jr. sold off his company, and he and Wilpon each bought a 50 percent stake in the Mets to become full partners. In 2002, the Wilpon Family purchased the remaining 50% of the Mets from Doubleday for $135 million[i]
(By the way… how would you like to become the 100% owner of a major league baseball team that wins the World Championship the same year of your purchase?)
As fans, we have now seen four playoff seasons since the purchase, two ugly near-misses in 2007 and 2008, 10 managers, and what seems like countless players, but, up to the Madoff scandal, there always seem to be hope.
In 2004, hope seems to turn to gold when Omar Minaya returned to the Mets as General Manager. Minaya seemed to have the ear of Wilpon and convinced him that the team had to compete, salary wise, with their cross-town rivals, the New York Yankees. He came out of the box with the free agent signing of P Pedro Martinez and OF Carlos Beltran. The Mets almost made the playoffs in 2005 (83-79) and fans could see the light at the end of the tunnel.
It got even better in 2006. Beltran brought in more red meat: Closer Billy Wagner, 1B Carlos Delgado, IF Jose Valentin, OF Endy Chavez, UT Julio Franco and C Paul Lo Duca. He also pulled off successful trades for OF Xavier Nady and then unknown P John Maine. The Mets won the National League East by 12 games and who cared who owned the team?
And then, on 1-29-08 came ‘The Trade’: Minaya’s predecessor, Steve Phillips had warned him that “prospects can get you fired”, so Minaya traded four of the Mets top ones (Carlos Gómez, Philip Humber, Kevin Mulvey, and Deolis Guerra) to the Minnesota Twins for what most baseball pundits thought was the top pitcher in baseball, P Johan Santana. Mets weenies went bat-shit saying the organization was cleaned out (they were!), but Minaya had a plan and Santana would be the last piece.
What followed was unpredictable: in no particular order, the collapse of the 2007 season, the collapse of 2008 season, Madoff, the Jason Bay contract, the economy stupid, the J.J. Putz deal, all of which led to Minaya being fired and replaced by Sandy Alderson.
Still, through all this, people turned turnstiles, turns on network broadcasts, bought hot dogs and took pictures of the old Shea Stadium while Fred and Company poured money into the plan and construction of his “new Ebbets Field”. The entrance would like just like the old place on Bedford Avenue, pictures of Jackie Robinson and old teammates would be in the rotunda and, hell, even old Dodgers like Fred’s old schoolmate, Sandy Koufax would be around during the kickoff (me?… well, I thought this was the New York Mets home, and the feature guy should someone like Tom Seaver or Straw, but what do I know?).
But looking like a stadium that was demolished 51 years ago wasn’t the problem. The problem was the fact that, after two mayors had two different plans to help fund this venture, the Wilpon family had to officially pluck down $420mil to begin the construction of the stadium that would take them through their lease that expires in 2049.
You add to this the approximate $700mil Wilpon lost in the Madoff scandal, the interest on the bills and bank debt that remained unpaid, the money under the table to the people that work at that level in the New York construction business, and the $162mil settlement in the Picard lawsuit (balanced off by the minority selloff of shares to individuals like Bill Maher and Jerry Seinfield) and you have a man and family that simply no longer has the financial capability to operate a business that isn’t turning a profit.
So, are the Mets ‘turning a profit’?
Stay tuned for Part 2 – Yikes, The Dikes!