MLB loaned the Mets 25 million

[Kuzzy Powers]

Reports: MLB loaned cash-poor New York Mets $25 million - ESPN New York

PORT ST. LUCIE, Fla. -- The embattled owners of the New York Mets received a loan from Major League Baseball in November in order to cover operating expenses, the team acknowledged Friday.

"We said in October that we expected to have a short-term liquidity issue," the team said in a statement. "To address this, we did receive a loan from Major League Baseball in November. Beyond that, we will not discuss the matter any further."

The New York Daily News and The New York Times pinned the amount at $25 million.

Mets owner Fred Wilpon, brother-in-law and team president Saul Katz and various family members and entities related to Sterling Equities are facing a lawsuit seeking $1 billion. The legal action by Irving H. Picard, the trustee recovering funds for victims of Bernard Madoff's Ponzi scheme, alleges Mets owners knew, or should have known, about the fraud. Total losses in the Ponzi scheme are estimated at around $20 billion.

Principal owner Fred Wilpon and chief operating officer Jeff Wilpon recently announced they intended to sell 20 to 25 percent of the team. However, Steve Greenberg, the man they hired to identify investors, since has stated the percentage sold could be higher. The Wilpons nonetheless adamantly maintain they intend to retain a controlling interest in the team.

Asked a week ago how he could be so confident in his ability to retain controlling ownership of the Mets given the uncertainty of the legal proceedings, Fred Wilpon insisted: "I can only tell you we have the resources in other businesses. Every one of our other businesses are going very well. And this business has to be straightened out -- no question about it."

Less than two weeks ago, Moody's Investors Service lowered its outlook on the company that operates the ballpark used by the New York Mets because of the litigation. The ratings firm cut the outlook on Queens Ballpark Co. LLC to "Negative," but maintained its "Ba1" rating on the company's bonds.

Is this normal? Ive never heard of it before.

 

[EmpireWF]

WSJ story on the matter:

Why the New York Mets Took a $25 Million Loan from MLB - WSJ.com

PORT ST. LUCIE, Fla.—In November, as the New York Mets were facing a cash crunch, Major League Baseball loaned the team $25 million, according to a person familiar with the matter.

The loan underscores the extent of the Mets' financial problems. The team's owners are carrying about $400 million in debt and are being sued for up to $1 billion by the trustee representing the victims of the Bernie Madoff Ponzi scheme.

The person familiar with the situation said the loan is expected to be repaid within a matter of months. In a statement released Friday, a Mets spokesman said: "We said in October that we expected to have a short-term liquidity issue. To address this, we did receive a loan from Major League Baseball in November."

The statement is referring to comments made by Mets principal owner Fred Wilpon, who said during an Oct. 4 news conference that the Madoff scheme "took some liquidity away" from the baseball team. But the secret loan indicates that the Mets' cash problems were far more significant than the owners have let on. It also shows that the league office was aware of the team's financial situation well before commissioner Bud Selig met with Wilpon and Mets president Saul Katz on Feb. 1.

A baseball spokesman did not return a call Friday evening.

The Mets announced on Jan. 28 that they would consider selling up to 25% of the team because of the "uncertainty" created by the trustee's lawsuit, which was filed in December.

The news that the team had received the MLB loan in November suggests the "uncertainty" Wilpon alluded to predated the lawsuit.

It is not unprecedented for baseball to issue a loan to a team in financial distress. The Texas Rangers borrowed money to stay afloat during bankruptcy proceedings in 2010.

The Wilpons have said emphatically that they will not sell a controlling interest in the team. But with the Mets facing the prospect of decreasing attendance at Citi Field and the possibility of paying several hundred million dollars to the trustee in the Madoff case, an infusion of capital from a minority investor appears crucial.

Sports business experts have expressed doubts about the Wilpons' ability to sell a minority stake in the team without including part of their 65% stake in the regional cable network SportsNet New York.

Last week, Wilpon said there had been a strong interest level so far from potential investors. He also predicted he would be "vindicated" in the lawsuit.

Irving Picard, the Madoff trustee, is seeking up to about $1 billion from Wilpon, Katz, their partners, relatives and entities related to their real-estate investment firm, Sterling Equities Associates. Picard has alleged the Mets owners and their business partners failed to investigate direct warnings and evidence that Madoff was running a Ponzi scheme, while reaping hundreds of millions of dollars in fictitious profits. He is seeking more than $300 million in fictitious profits, as well as up to $700 million in principal they withdrew since 2002.

Earlier this month, a federal bankruptcy judge appointed former New York Gov. Mario Cuomo to mediate the legal dispute.

Picard has alleged that the Mets withdrew more than $94 million in fictitious profits, which were used to help fund the team's "day-to-day operations," including covering payroll and paying for stadium operations. Wilpon and Katz have said none of their businesses depended on Madoff returns.

Madoff, who had a more than 25-year relationship with Wilpon and Katz, is serving a 150-year prison sentence after admitting in 2009 to carrying out a decades-long fraud.

 

[NAHSTE]

^^ Not to mention the MLB's temporary ownership of the Expos/Nationals.

 

[Kuzzy Powers]

^^ Not to mention the MLB's temporary ownership of the Expos/Nationals.

Well thats well known obviously. It just seems very weird for a big market team like the Mets to need a loan from the league.

 

[NAHSTE]

Well thats well known obviously. It just seems very weird for a big market team like the Mets to need a loan from the league.

Well the Mets have always been financially reckless (see: Mo Vaughn contract, Carlos Delgado/Beltran contracts, etc.), even before getting sucked into one of the largest ponzi schemes in American history.

 

[EmpireWF]

Well the Mets have always been financially reckless (see: Mo Vaughn contract, Carlos Delgado/Beltran contracts, etc.), even before getting sucked into one of the largest ponzi schemes in American history.

huh? Giving out large free agent contracts has nothing to do with the fact they lost liquidity last year thanks to the ponzi scheme fiasco.

If you're calling them reckless because of those deals, every team is reckless. Even Oakland at times.