By: Brian Mangan
A few years ago, we wrote an expose on how the Wilpon family rose to power as the owners of the New York Mets franchise. It is a remarkable story – with Fred Wilpon, over decades, taking steps from being a minority owner, to half owner, to finally wresting control of the franchise away from Nelson Doubleday through his cunning use of a clause in their contract.
The action on the field for the Mets has been no less dramatic, and no less tied to events taking place off the field. Unfortunately, however — whether because of confusion or sheer exhaustion — very few people have been able to connect the dots and see just exactly how unacceptable it is that things have turned out this way for this once-proud franchise.
There is no excuse for the Wilpons personal financial troubles with Bernie Madoff to impact the team. Every baseball team is profitable, and like any business, should not be commingled with the investments or other assets of its owners. The Wilpons’ financial troubles should have always been irrelevant to the organization. Unfortunately, as we all know, the team’s last half-decade has effectively been gutted and mortgaged for reasons not related to baseball.
No owner should be allowed to intrude on baseball operations because their personal finances are a disaster. But for some reason, not only is it allowed, but the outgoing Commissioner of Major League Baseball, Bud Selig, had effectively been protecting the Wilpons (with whom he is close friends) for years.
There is almost no precedent for this in MLB, but in the one instance where an owner did run into similar trouble, Selig took aggressive steps to actively drive that owner out of baseball. It was only a few years ago that Selig and MLB forced Dodgers’ owner Frank McCourt to sell the Dodgers in response to sins which appear to pale in comparison to the Wilpons:
In fact, Bud Selig wanted McCourt out so bad that he appears to have actively interfered with a $3 billion dollar TV contract may have solved the Dodgers’ financial troubles altogether:
The baseball commissioner has already seized control of the club by appointing a trustee to investigate and operate all phases of the organization, and refused to approve a $3 billion television contract with Fox which McCourt insists could ameliorate his financial problems. (ESPN LA)
Not only did Selig and MLB block the Dodgers’ TV deal, but also prevented a loan from a hedge fund which would have been used to meet payroll: “After a hearing on July 20, the judge rejected McCourt’s further use of the Highbridge loan and ordered McCourt to negotiate a loan with MLB.”
Unlike with McCourt, where there was light at the end of the tunnel, there has appeared, for the longest time, to be no end in sight to the Mets’ financial malaise. The tension and frustration among the fans is palpable.
Yet for some reason, in the case of the Mets and the Wilpons, Selig and MLB have either looked the other way or have actively assisted the Wilpons in their attempts to remain in control of the team, providing loans directly from MLB and allowing the Wilpons to dilute their own ownership stake:
But while Selig took a hard line to McCourt, he’s the reason the Wilpon/Katz ownership group has survived this long. He allowed them to borrow $430 million against their ownership stake in the team in 2009, and $450 million against their ownership stake in SNY in 2010, just to keep their heads above water after their Madoff holdings disappeared overnight.
MLB loaned the owners $25 million in 2011, then approved a bridge loan from Bank of America in Nov. 2011 (with the loan from MLB past due), right around the time the team was pretending it could afford Jose Reyes.
Of course, it wouldn’t be fair to write this article without saying that it is possible that there are other things not in the public domain or aware to me which made the Dodgers situation worse than the Mets situation. But, despite following the story for years, there has never been a single reason articulated for the disparate treatment. As you’ll see below, Selig failed to articulate even a single distinction when asked directly to do so.
Is it as simple as the fact that Selig did not like McCourt, while Selig and Wilpon are real-life best friends? Could it be because the Dodgers crisis came first, and MLB wanted to avoid two acrimonious divorces as well? We don’t know, but the facts are the facts, and the Mets are in a deeper, darker hole than the Dodgers ever were. What is most amusing is that, at the time, the Dodgers’ peril was described in almost apoplectic terms:
But for fans and most media alike, McCourt has run his business in such a way as to turn one of baseball’s proudest franchises into an attendance-sagging, security-challenged, budget-strained and turnover-riddled mess, which is why Selig’s intervention has been welcomed so warmly. (ESPN LA)
Sounds bad, right? But when you look at the Dodgers around that time, they didn’t have a single season where they were as uncompetitive as the Mets have been:
- 2008 Los Angeles Dodgers (84-78), 1st, lost NLCS
- 2009 Los Angeles Dodgers (95-67), 1st, lost NLCS
- 2010 Los Angeles Dodgers (80-82), 4th
- 2011 Los Angeles Dodgers (82-79), 3rd
- 2012 Los Angeles Dodgers (86-76), 2nd
In their darkest moment, the Dodgers were two games under .500 — and only for a single season. The next year, 2013, they returned to the playoff with 92 wins. The Mets, by comparison, have not had a winning season since 2008 (!!) and have won a mere 70, 79, 77, 74, 74 and 79 games in the six seasons hence.
Perhaps it’s not the on-field product that people were critiquing. Was it the payroll that was the focus? Was it McCourt’s financial constraints that caused Selig to appoint a trustee and (force) a sale? Dodgers’ payroll numbers did not seem to be lagging that much:
- 2008: $118 million
- 2009: $100 million
- 2010: $102 million
- 2011: $119 million (Source: Cot’s)
In even the single worst of those years, 2009, the Dodgers had the ninth largest payroll in the sport. Let that sink in for a moment, and compare is to the fact that the Mets payroll this season ranked 23rd in the sport at a paltry $84 million. (Additional reading at MetsBlog).
The Mets have been losing, consistently, for years. The Mets payroll has been pathetic, consistently, for years. By every objective measure there is, the Dodgers succeeded through their troubles where the Mets have failed. Yet, McCourt is gone, and Wilpon remains. Why?
Further adding to the difference between the two, unlike with McCourt and the Dodgers, the list of Wilpon sins is public and seemingly endless. I’ll sample just my favorite one – the fact that the Mets got saddled with Las Vegas, the least desirable Triple-A franchise, because of Jeff Wilpon. The Wall Street Journal reported:
Rosenfield was Norfolk’s general manager [when the Mets Triple-A affiliate was in Norfolk]. Only a one-hour flight from New York, Norfolk was perfectly suitable for the Mets. And for decades, the two got along well enough. But Rosenfield said the relationship soured after Jeff Wilpon became the Mets’ chief operating officer in 2002, after which communication with team officials became “virtually nonexistent.”
“When he became involved in everything was when things changed,” Rosenfield said. “I dealt with him on some things and somebody always had to go to him if you wanted to do anything. He had his nose and hands in everything.”
The Mets are being run by their massive amount of debt, as a general matter — and reports indicate that they are even being run by their individual creditors in some cases:
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. (Capital New York)
When Selig appointed the Trustee to oversee the Dodgers, McCourt released a statement which said: “Major League Baseball sets strict financial guidelines which all 30 teams must follow. The Dodgers are in compliance with these guidelines. On this basis, it is hard to understand the commissioner’s decision today.” What exactly are these strict financial guidelines and — how on earth are the Mets within them?
The cherry on top of all this absurdity occurred just recently, when Selig’s farewell/retirement tour brought him to New York City. When asked directly by a reporter about the difference between the Dodgers and the Mets, Selig said the following:
“But, and I don’t want to go back into the whole Frank McCourt situation, because there were enormous ramifications there — many of which perhaps weren’t public. As far as I’m concerned, I’ve said it in the past, and I’ll say it again, I don’t have any problem with the way the — with the Mets’ financing, with what’s going on. As far as all of our economic rules — and we have a myriad of them — they are in compliance with ’em. They’re doing fine. The Dodgers were not in compliance with any of them.”
The Mets are in compliance with ALL of the rules. The Dodgers were in compliance with NONE of them. He even reiterated the exact point when asked by Howard Megdal: “They were out of compliance with every one of our internal economic rules. The Mets are in compliance with all of them. Big difference. Big difference.“
Why did MLB actively move to block the Dodgers from obtaining a loan or consummate a television contract which would have saved them, when the Mets are allowed to a) refinance their existing loans, b) sell minority stakes in the team, c) and leverage their holdings in SNY? Even independent ratings services rate the Mets’ as below investment grade:
The ratings service announced late last month that it was lowering the rating on the bonds issued to finance Citi Field to BB, two levels below investment grade, while continuing to rate the outlook as negative. Standard and Poor’s projects attendance to eventually stabilize around 2.3 million. That’s less than what the Mets drew in 2011, a year when they lost $70 million. (Capital New York)
The Mets franchise is a junk bond. Ownership cannot cover losses. This isn’t my opinion, it’s Standard and Poor’s.
Similarly, the reason that the Mets were able to settle their Madoff lawsuit so cheaply is, simply stated, because the Trustee figured that the Wilpons and Mets were basically insolvent:
On Friday evening, in a court filing that set forth the terms of the settlement, Picard made it clear why he agreed to such an apparently lenient deal: Wilpon and his partners wouldn’t have had the money to pay him anything.
“Based upon financial information provided by Defendants since the [agreement], and on the advice of my counsel, we have become satisfied that Defendants’ cash flow and lender covenants would not have enabled me to recover more for the BLMIS customer fund in the forseeable future by litigating to the point of judgement,” Picard wrote in an affidavit filed with the settlement terms. (Capital New York)
This may be all shouting into the wind, given the fact that the Mets seem primed to re-emerge as a competitive team. But so long as the Wilpons are the owners of the team, there will always be a danger that the Wilpons will interfere with management. There really is no sugar-coating this — this is a problem unique to the Mets.
For instance, former hitting coach Dave Hudgens had this to say earlier this season:
Hudgens continued his media tour on Tuesday, casting further doubt on the idea, hopefully suggested in the past by ownership, that Alderson is free to spend as he pleases. “If they want a winner in that town, I would let the purse strings loose and let Sandy do what he wants to do,” Hudgens told Michael Kay during the first of two interviews he conducted on New York radio. (Capital New York)
There was also a startling report earlier this year that Jeff Wilpon had robbed Alderson of his autonomy and is now directly ordering him to make certain baseball decisions:
It’s been a common thing, as the Mets have struggled, for the team’s C.O.O. to express displeasure with general manager Sandy Alderson. And sure enough, during Monday’s disappointing 5-3 loss at home to the Pirates, Jeff Wilpon sent Alderson an angry text, and followed it up with an angry call. Then, after the game, they had an angry meeting.
But at that meeting, according to a knowledgeable source, Wilpon did something new: He overruled his general manager on a baseball matter, ordering him to fire hitting coach Dave Hudgens, a longtime Alderson friend and colleague.
It is a strange time to be a Mets fan. Although it is possible to be heartened by the news that Bud Selig is retiring and the Mets look to be fielding a competitive team next year, the specter of Wilpon malefeasance and interference always lingers. Will Sandy Alderson maintain, or regain, his autonomy if the Mets field competitive teams in 2015 and beyond? Or will ownership’s personal financial troubles continue to constrain him? Or will ownership continue to meddle in baseball operations as reports have indicated that they have for a decade?
We as fans can only hope that all this wait has not been for nothing, and we must not forget this period. We must not forgive the Wilpons for being duped by Madoff, and we must not forgive the Wilpons or MLB for sacrificing the fortunes of the team in order to save themselves. We must not forgive the fact that for five years, the Mets were an organization that made no effort to compete, but that gladly accepted the money of the fans, and gladly wasted the prime of David Wright’s career. We as fans must not forgive the meddling of ownership that cost us our minor league affiliates, or forgive the comments made by Fred Wilpon in the New Yorker where he went to the press and outright bashed David Wright and Jose Reyes and Carlos Beltran, generational talents who had the bad luck to don the Blue and Orange during the Wilpon tenure.
The team has been, in Fred Wilpon’s words, “a shit team,” but what he fails to recognize or admit that their failures started at the top. Success on the field cannot cause fans to forget, because so long as the Wilpons own the team, there is a chance that history will repeat itself.
Demand a good product and demand that the baseball people be allowed to do their work. Demand accountability from the Commissioner’s Office. Let’s Go Mets.