The big news this weekend, as usual, had nothing to do with the Mets acquiring a shortstop, and once again had everything to do with Fred Wilpon and finances. Except this time, the news is that Fred Wilpon has been selected by Commissioner-elect Rob Manfred as the new chairman of the finance committee, as first reported by Bill Madden of the New York Daily News.
On the surface, appointing an owner who was caught up in the biggest Ponzi Scheme in history to chair a financial committee is not a great public relations move. Especially if that owner is now buried up to his eyeballs in hundreds of millions of dollars in debt that he has no real way to get out from under.
One has to wonder what was going through Manfred’s mind when he took arguably the last owner he should have picked and named him the chairman of the finance committee. It’s hard to argue that there wasn’t some shred of cronyism in his decision, as the Wilpon appointment was part of an almost-total retooling of baseball’s executive council.
Hal Steinbrenner of the Yankees, Jim Pohlad of the Twins, Stu Sternberg of the Rays, Ray Davis of the Rangers, Bob Nutting of the Pirates, Terry McGuirk or the Braves, and Tom Ricketts of the Cubs, who join Bill DeWitt of the Cardinals, Manfred’s biggest supporter during the voting last August.
Jerry Reinsdorf of the White Sox, John Henry of the Red Sox and Bob Castellini of the Reds – none Manfred supporters – came off the council, as did Wilpon and Royals owner David Glass. Glass was appointed the chairman of the business committee, and Wilpon – of course – got the same position with the finance committee. Both were strong Selig and Manfred supporters.
So at least we have a theory as to Manfred’s motivation – he wants baseball’s hierarchy to consist of those who helped elect him commissioner. But that still leaves the burning question of how Manfred could think that Wilpon would be a good chairman for a finance committee, unless he wants corruption and incompetence to reign free.
Wilpon made millions by investing with someone in Bernard Madoff whom he knew was engaging in shady practices. If one has any doubt about that, Howard Megdal was happy to quash any skepticism by tweeting out a simple photo Sunday morning when Madden broke the news. The photo was an email sent by Ashok Chachra, the chief investment strategist at Sterling Stamos Capital Management to a redacted email address.
Here is the full text of the message, dated December 13, 2008:
You should have received this email yesterday.
Sterling Stamos does not have any exposure to any funds managed by Madoff and never has had any exposure.
In fact, we turned down the Madoff Funds more than 6 years ago and told many of our investors including the Wilpon and Katz families about our concerns.
Notwithstanding our concerns, the Wilpon and Katz families continued to invest with Madoff Securities.
Please let me know if you would like to discuss this further as we are trying to inform all our investors that our due diligence process rejected Madoff but, unfortunately, the Katz and Wilpon families maintained their investment independent of our advice.
Best regards,
Ashok
There is the evidence that Wilpon was given advice as early as 2002 that Madoff was not somebody with whom he should be investing, and he ignored the advice and kept on reaping the profits. That’s not quite as bad as actively duping innocent people, but knowing that you’re profiting millions as the result of a fraudulent operation is pretty low.
So why would Manfred appoint this man to be the chairman of the finance committee? We may never know.
It seems like Wilpon’s new position has no power. He was removed from the committee that really did have influence. It’s possible that this was a gesture by Manfred to remove some of the sting from being cast out along with those that did not support Manfred in his candidacy.
To me, the real question is not why he’s the chair of the new committee (however ludicrous it may be) but rather why he was given the boot from the Executive Committee?
Did he not do enough in Manfred’s eyes to support his candidacy? Or does Manfred not believe Wilpon belongs at the adult table among MLB owners? If the latter is the major part of the reasoning, my opinion of Manfred goes up.
Isn’t Jeff Wilpon on some decision making committee also?
This comes from his official bio at Sterling Equities:
“He also serves on the boards of the MLB Network and Major League Baseball Enterprises”
http://www.sterlingequities.com/about/leadership.php#JeffreyWilpon
The same bio mentions he was drafted by the Expos but gives no indication that this was a courtesy pick and that he never played a single inning of pro ball.
My guess is that he does indeed serve on these boards. But we have no idea if these boards hold any real influence and if they do – how much influence Wilpon truly has here.
More fun with Jeff Wilpon’s bio:
I can not claim to be an expert in the organization of MLB so take this as the understanding of an interested bystander and not anything more.
It is my understanding that the board of MLBN over sees the corporate management of the network and its finances. However the day to day operation and its contracts are managed by new president Rob McGlarry who replaced Toney Pettitti who in tern took Mansfred’s old post.
MLB Enterprises mainly focuses on managing the listening, corporate partnerships and so on. the fact is only sites on the boards day to day I’d guess he has no impact. In a great many situations board members meet quarterly and just keep the 20 thousand feet view.
It seems to me they have put Jeff in places he can’t screw up.
Could also be interesting in is if this effects any kind of bridge loan the team might receive from the league, or the conflict of interest this would present in the case that it might be necessary. They’ve gotten a loan like this – then several extensions to pay it back – before, and it might be an issue in the future with hundreds of millions of dollars in debt still to pay. Moreso for me, it’s the wrong guy to be putting in that position. Pick an owner with a less shaky financial history as the chairman of your finance board. Gets the new administration off on a clownish note.
The more embedded Wilpon becomes within MLB the harder it will be for his fellow owners to remove him.
Fans on twitter put it best:
“Fred Wilson is now the chairman of MLB finances. In related news, Bartolomeo Colon was appointed chairman of health and nutrition”
Here’s how this can all work out beautifully:
1-Wilpon sets up a scheme where revenue sharing money gets funneled to the Mets.
2-The Mets use that money to improve the team, resulting in several pennants and World Series championships.
3-Wilpon’s scheme takes years before it’s discovered.
4-When it is discovered, Wilpon is forced out.
Win-Win-Win! LOLMets!
Kind of like Richard Pryor in “Superman III”
I like your thinking, Charlie.
And he gets a cell next to Bernie! How’s that for the perfect ending!
What remains interesting about this is that Manfred does not take over until January 25th 2015, and Bud Selig is still technically in charge. I am certainly not a conspiracy theorist, but it seems that Selig appointed Wilpon into this position in hopes that he could keep a job before Manfred might have thrown him out.
I don’t think this is going down that way. Manfred has been announcing these changes in personnel and mlb organization I’ve gotten the sense that he is making the moves. Kind of the Baseball version of the president elect naming his administration and a new congress starting conformation before inauguration day.
The new commish is reorganizing and baseball is getting the reorganization dune before ST starts. I could be wrong but I think Fred and Jeff are now at the places the new Commissioner wants them and don’t forget Bud gets the 6 mil a year Commissioner emeritus retirement gig so its not like he is really gone.
It’s all corrupt I’z tellz ya!
“appointing an owner who was caught up in the biggest Ponzi Scheme in history to chair a financial committee is not a great public relations move. Especially if that owner is now buried up to his eyeballs in hundreds of millions of dollars in debt that he has no real way to get out from under.” Joe you summed it up perfectly.