Archive for December, 2011
The State of the New York Mets
Posted by Jody Eisenman | Filed under Uncategorized
With the markets being driven almost entirely by the news out of Europe, I have decided to devote a column to the financial state of my beloved NY Mets. I first became a Mets fan in 1964, when I was 6 years old. For a long time, the team was the laughing stock of baseball, having finished last or next to last every year of their existence from 1962-1968. However, in 1969, the Mets shocked the baseball world by winning 100 games and taking the World Series over the heavily favored Baltimore Orioles. Although they had some success through the years, the Mets did not win another championship until 1986, when they won 108 games and beat Boston in a thrilling seven game series. In the early part of the new millennium, the Mets were rebuilding, and by 2006, they finally had an excellent team again. However, three straight disappointing seasons left the Mets fans frustrated. Around this time, the current owners decided to build a new stadium (name Citi Field after Citicorp bought the naming rights) which opened in 2010. Unfortunately for the Wilpons (the current owners), they were hit with several financial setbacks. First came the recession, which hurt ticket sales. At the same time, the real estate market fell apart, which severely hurt their principal line of business. However, what really catapulted them into the front pages was the Madoff Ponzi scheme. The Wilpons invested hundreds of millions with Madoff, and apparently directed others to invest with him as well. Currently, they are being sued by trustee Irving Picard for over a billion dollars. In addition, as the team has hit hard times, they are continuing to try and raise money to keep their majority ownership intact. It is believed that the team lost around $70mm this past year. Meanwhile, the Mets are in debt for hundreds of millions of dollars, perhaps as much as $650mm. Although it is believed that the Mets would fetch in excess of a billion in at outright sale, the owners are at least this far refusing to consider this, opting instead to sell small units to various parties. Earlier this year, the Mets had an agreement to sell 1/3 of the team to hedge fund guru David Einhorn, but the deal fell through. This leaves the Mets with mounting losses, an expensive ballpark, and a lousy team.
Compounding the Mets’ problems is that they are trying to shrink their payroll at a time when they have unperformed on the field. In 2010, the Mets spent about $140mm. This year, they are expected to come in around $100m, perhaps even less. However, $57mm is already guaranteed to just three players! One of whom is Johan Santana, who underwent shoulder surgery and may not even to able to pitch. They lost three of the best players (Closer Rodriguez, CF Beltran to trades, and superstar SS Reyes to free agency) and have made little effort to replace them. In addition to the $57mm, they are committed to another $22mm to 6 other players. That leaves the Mets with almost $80mm committed to nine players, which means they have, at most, $20mm to spend on the other 28 guys on their 40 man roster. The team has finished under .500 for the past three years, and attendance has plunged from over $4mm in 2008 to around $2.3mm last year, despite the fact they are in a brand new ballpark. Based on their current roster, its’ a good bet they will finish near the bottom of the league in 2012.
It is incredible to me that the current owners refuse to sell a majority interest in a business that continues to lose money every year. Until the Wilpons sell the team, it looks like a lot more misery for us fans. One can only hope that the mounting losses will eventually cause the owners to sell out and begin a new era.
