Mets Borrowed 25 Million from MLB

Posted on February 26, 2011 by Joe Janish

Honestly, I thought we could go a week without another off-field bombshell … but unfortunately, the latest news that the New York Mets borrowed money from the MLB coffers as recently as December cannot be ignored.

Major League Baseball provided $25 million to the owners of the Mets as they struggled to deal with a cash shortfall last fall and a looming lawsuit seeking hundreds of millions of dollars for victims of Bernard L. Madoff’s vast Ponzi scheme, according to two people briefed on the arrangement.

The direct intervention of Commissioner Bud Selig to help sustain the operations of the franchise — confirmed by the Mets on Friday — is perhaps the most striking evidence yet of the financial distress that for many months has plagued the team’s owners, Fred Wilpon and Saul Katz.

So it’s not bad enough that the Mets are in the middle of the Madoff scandal — they’re also in dire financial straits. Hmm … dire straits … money for nothing … oh me and my silly puns …

Seriously, this information would explain the Mets’ sudden need to obsess over payroll, after years of spending freely. You can talk all you want about the payroll budget being too high and it not being necessary to field a winning team, but that was never the point. The point was that the Mets, over the past few years, repeatedly claimed that the payroll was flexible, and in fact said there was still room after signing Jason Bay last winter. That tune changed swiftly this past fall.

The Mets have exhausted baseball’s standard bank line of credit, tens of millions of dollars that Mr. Selig and the sport’s owners make available to teams for a variety of reasons in the course of a year. The owners also have more than $400 million in debt on the team. Thus, the additional money provided by Mr. Selig — done in secret last November — might have been crucial in keeping the club functioning.

Is it a coincidence that the Mets took this “secret loan” from Selig at around the same time Sandy Alderson — who was recommended by Selig — was named the Mets GM?

By the way, Fred Wilpon is not denying that there was a loan — but the rest of MLB didn’t know about it until recently:

“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. Beyond that, we will not discuss the matter any further.”

One team executive in baseball said that the Mets had not yet repaid the loan, and that Mr. Selig had informed baseball’s executive committee of the loan only last month.

Sooo … the Mets owe some $400M to banks for various debts and another $25M to MLB. That said, selling a 25% stake in the team — about $200M or so — isn’t going to cover even HALF of their total debt. It appears that the Wilpons will need to sell a much more substantial piece of the team. Add in the fact that it also appears that the team currently has trouble getting money via traditional avenues and you realize that the Wilpons have very little leverage in making a sale.

“The fact that the loan is coming from baseball would be a jarring event because, as with the Texas Rangers, the league is effectively a lender of last resort,” said Marc Ganis, a sports industry consultant. “It would indicate the team cannot get loans from normal commercial sources, which could be taken as a sign of very significant problems.”

There’s one more fly in the ointment that isn’t going to please the banks and won’t help the Mets’ line of credit:

Baseball, in involving itself with struggling franchises, enjoys a powerful status. In the event of a bankruptcy, it gets its loans repaid first — ahead of banks, and perhaps even Mr. Picard, the Madoff trustee.

I would imagine that a baseball team is similar to any other privately funded business, in that its ability to acquire loans and have “good credit” is critical to keeping things going and in future success — particularly in distressed economic times, when revenues are lower. These factors certainly play into a prospective buyer’s decision process as well as at the negotiating table during a purchase. Which would explain why there has been so little interest in finding buyers for the team.

One last quote from that NYT article:

According to one person briefed on baseball’s involvement with the troubles of the Mets, the club has faced cash shortfall issues for at least a year.

If that’s true, it suggest that the team is having trouble generating revenue even after opening one of the newest, most expensive, fully featured ballparks in the largest market in the country. Again, not a piece of info that attracts potential buyers.

This team is in deep financial doo-doo, independent of the Madoff suit. And things won’t change until new ownership takes over the team.

Posted in 2011 Spring Training | Tagged , , | 7 Comments

Offseason Changes: Phillies

Posted on February 24, 2011 by Joe Janish

In: Cliff Lee

Out: Jayson Werth, Jamie Moyer, Greg Dobbs, Mike Sweeney, Chad Durbin

The biggest news of the offseason in Philly, of course, was the acquisition of Cliff Lee and the departure of Jayson Werth. Not much else changed about the Philadelphia roster, and that could be considered a good thing or a bad thing, depending on your perspective.

On the one hand, by signing Lee the Phillies have assembled the best four starters on one club since … well, since maybe forever. It’s all on paper, though — it will remain to be seen whether Roy Halladay, Cliff Lee, Roy Oswalt, and Cole Hamels stay healthy and take 32 starts each. If they do, and they perform reasonably as well as expected, it will be a long year for NL hitters.

However, will the Phils score enough runs now that Werth is gone? Rookie Domonic Brown is supposed to be up to the task of replacing Werth — in a platoon role with Ben Francisco — but it’s hard to imagine the youngster posting a .900+ OPS in his first year. I’m a little surprised that GM Ruben Amaro didn’t acquire a veteran bat to guard against Brown flopping and/or further decline by Raul Ibanez — though, it probably makes more sense to see what happens in the first few months of the season, and make a deal if necessary before the trading deadline.

In addition to the big gain and big loss of the winter, the Phillies made a few under-the-radar moves, signing a few intriguing players to minor-league deals with invites to spring training. Specifically, Jeff Larish, a power-hitting corner infielder who was a top prospect for the Tigers not long ago. Larish has never been given ample opportunity to prove himself at the big-league level, and may now be a “AAAA” player. He hit 20 HR in 334 AAA at-bats last year, posting a .910 OPS, so he has some pop — he could grow into the old Greg Dobbs role of pinch-hitting and filling in at 3B. The Phils also signed outfielders Brandon Moss and Delwyn Young, as well as second basemen Pete Orr and Josh Barfield — all of whom have MLB experience. I’ve always liked Young and found Barfield interesting — though they likely would have had a better chance of making the Mets rather than the Phils.

Finally, the Phillies signed LHP Dan Meyer, who had a breakout year with the Marlins in ’09 but missed most of last year due to a sword-swallowing accident … er, check that, wrong Dan Meyer … I mean, a serious calf injury. In all seriousness, the NJ native was impressive in ’09, and if he can regain that form in 2011, the Phillies may have obtained one of the best bargains of the offseason.

Posted in 2011 Spring Training | Tagged , , | 4 Comments

11 People Who Won’t Own the Mets

Posted on February 24, 2011 by Joe Janish

With the Wilpons in hot water over this Ponzi scheme litigation, and looking to sell off a “portion” of the team, several suitors have either come forward or been suggested as possible future owners of the Mets.

Let’s take a quick look at some people who won’t be buying in.

1. Mike Bloomberg
Being owner of the Mets would make it kind of inappropriate and uncomfortable to attend Yankees games.

2. Carlos Slim Helu
The billionaire from Mexico is too disgraced and offended by the presence of fellow countryman Oliver Perez.

3. George Steinbrenner
First off, he’s dead. Second, Bud Selig would never allow Steinbrenner to buy the Mets with the sole intention of moving them to International League.

4. Charley O. Finley
He’s dead too, but more importantly, between the animal rights activists and the New York City Board of Health, there’s no way a donkey would be allowed set hoof in Citi Field.

5. Donald Trump
Bud Selig would never let him into his private “boys club”, for fear that Trump would find a way to fire him.

6. Bernie Madoff
As Bernardo Provenzano can tell you, it’s not impossible to run a business from behind bars. Unfortunately, Bernie was going to use the money he “made” via his Ponzi scheme to fund the purchase. Ironic!

7. Sir Richard Branson
MLB would never allow him to rename the team to “New York Virgins”.

8. Lorne Michaels
SNL is already inundated with enough bad jokes.

9. Jerry Seinfeld
Because the Mets are just not funny … they’re sad.

10. Lenny Dykstra
He would’ve been a frontrunner three years ago. Unfortunately, his financial empire was about as solid as Madoff’s funds.

11. Warren Buffet
Buffet got where he is today by investing in solid, well-run businesses that show the potential to profit and succeed in the future. Need I say more?

Coming soon: people who COULD own the Mets!

Posted in 2011 Spring Training | 6 Comments

Offseason Changes: Nationals

Posted on February 23, 2011 by Joe Janish

Following with our brief series on offseason changes around the NL East, today we look at the Nationals.

In: Jayson Werth, Tom Gorzelanny, Adam LaRoche, Henry Rodriguez, Rick Ankiel, Chad Gaudin, Chien-Ming Wang, Jerry Hairston, Jr., Todd Coffey, Matt Stairs, Alex Cora, Cla Meredith, Corey Brown

Out: Adam Dunn, Josh Willingham, Justin Maxwell, Wil Nieves, Joel Peralta, Willie Harris, Adam Kennedy, Miguel Batista, Kevin Mench, Tyler Walker, Scott Olsen

The Washington Nationals certainly were busy this winter; if nothing else, the team will be different.

The big news, of course, was Jayson Werth’s 7-year, bazillion-dollar contract — which seemingly overshadowed the departures of Adam Dunn and Josh Willingham. Werth is a solid player and an offensive force, but will he make up for the exit of Dunn?

Werth will get offensive help from first baseman Adam LaRoche, who gets little respect despite posting consistent, admirable numbers year in and year out. LaRoche is no star, and tends to be a second-half hitter, but he’s reliable and will hold his own as a #5 or #6 hitter.

I’m not sure where Rick Ankiel and the other veteran bats fit into the equation, but it appears as though the Nats will have a solid, experienced bench. I’m guessing Ankiel and Hairston are insurance against Michael Morse and/or Roger Bernadina not making forward strides.

After Werth, the pitching additions are the most exciting for Washington. Tom Gorzelanny steps into a rotation that has always needed stability. Chien-Ming Wang isn’t really an “addition” since he was rehabbing with the club last year, but if he can make a comeback it could be key to Washington’s chances of climbing out of the cellar. Henry Rodriguez — acquired in the trade that sent Willingham to Oakland — is a young, hard-throwing righthander who touches triple digits and seemed to turn a corner with his control in 2010. I also like the signings of Chad Gaudin, Cla Meredith, and Todd Coffey, veteran relievers who could win spots in middle relief. Gaudin in particular is intriguing, as he once made 34 starts for the A’s and should benefit by getting out of the AL East; whether he gets the chance to break into the Nats rotation remains to be seen. Meredith also could benefit by leaving the Beast; he was a strong performer for the Padres previously, and his 2010 performance was likely impacted by bone chips that were removed from his elbow after the season.

Finally, I’m happy to see Matt Stairs still hacking. His all-or-nothing approach and flair for the dramatic as a pinch-hitter is fun to watch — as long as he’s not hitting game-ending homers against the Mets.

Posted in 2011 Spring Training | Tagged , , | 2 Comments

Durbin, Bonderman, Millwood Still Available

Posted on February 22, 2011 by Joe Janish

While researching something else, I noticed that veteran righthanders Chad Durbin, Jeremy Bonderman, and Kevin Millwood are still on the free agent market.

The 33-year-old Durbin has been Continue reading →

Posted in 2011 Spring Training | Tagged , , | 1 Comment

Might Emaus

Posted on February 22, 2011 by Joe Janish

No, I didn’t forget to finish the headline … though, it could’ve gone “Might Emaus Win the 2B Job?”.

Instead, I’m going to tab rookie Brad Emaus with a nickname, right here, and right now: “Might Emaus” … as in, “Mighty Mouse”.

Baseball needs more nicknames these days, and the moniker fits. After all, Emaus is similarly well-muscled and has been described as “… short and kind of squat…” by one onlooker, which is sort of how one could describe Mighty Mouse. And, Emaus did kind of come out of nowhere / drop out of the sky; if he “flies in” to take the second base job, it will be due to a heroic effort. I’m not sure if he has X-ray vision or telekinetic skills, nor if he has a girlfriend named Mitzi, but I bet he can beat up Oil Can Harry Boyd.

Brad “Might” Emaus – will he save the day?

Posted in 2011 Spring Training | 5 Comments

Sterling Filtered Madoff Funding

Posted on February 22, 2011 by Joe Janish

NOTE: pass on this article if you are tired of all the Madoff talk; we’ll return to baseball stories soon.

Yes, I’d really like to focus on the baseball stuff right now, being that the players are out on the field and running around in the sunshine of Florida.

Unfortunately, I for one cannot stick my head in the sand and ignore what’s happening with the Madoff situation — because it has already, and will continue to, affect the team on the field and ultimately our fan experience of the Mets (i.e., “consumers of the product on the field”).

So, while I won’t linger over small developments in the case, I will react when bombshells drop — such as the one reported by The New York Times yesterday. Continue reading →

Posted in 2011 Spring Training | Tagged , , | 10 Comments

Offseason Changes: Marlins

Posted on February 22, 2011 by Joe Janish

In: Omar Infante, John Buck, Javier Vazquez, Edward Mujica, Ryan Webb, Michael Dunn, Dustin Richardson, Shawn Hill, Greg Dobbs, Joe Thurston, Ruben Gotay

Out: Dan Uggla, Cameron Maybin, Ronny Paulino, Andrew Miller, Will Ohman, Chad Tracy, Jorge Sosa

The Fish made two big trades in the offseason, sending slugger Dan Uggla to Atlanta and enigma Cameron Maybin to San Diego. On the surface, it appeared that the Marlins were bested in both deals, but when you look at it from the perspective of flexibility — and looked at the other moves made by them in the winter — it all made sense.

Though losing Uggla would seem to be a huge blow, you have to consider that Omar Infante is a pretty good all-around ballplayer, and the trade freed up money to sign heavy-hitting catcher John Buck and starting pitcher Javy Vazquez. Vazquez had a predictably poor year in New York, but has been stellar when competing in the NL East. Buck’s homerun power helps defray the exit of Uggla, and you must also remember the Fish have slugging youngsters Mike Stanton and Logan Morrison pushing themselves into the lineup.

The Maybin deal was more of a head-scratcher, considering that Florida doesn’t have much depth at the centerfield position. However, they’re assuming that natural infielder Chris Coghlan can cut the mustard out there, and they were able to acquire two sorely needed, solid relievers in return for Maybin — Edward Mujica and Ryan Webb.

Along the way, the Marlins also picked up two lefthanders who may help in the bullpen — Michael Dunn and Dustin Richardson. The 25-year-old Dunn was a top prospect in both the Yankees and Braves organizations and seems to have more upside; Richardson is similar to the man he was traded for (Andrew Miller), in that he is tall, lefthanded, and a disappointment thus far. Who knows, maybe a change of scenery will help him out.

As for their spring training invitations, the name Ruben Gotay jumps out at me, as he was a favorite Met of mine back in 2007. Ruben hasn’t been in MLB since ’08 but has posted OPS totals of .845 and .879 in AAA the past two seasons. Former Nats hurler Shawn Hill gets another crack at a big league job, but it seems that injuries have ravaged his career. Standout pinch-hitter Greg Dobbs is in camp, as is DeWayne Wise, who is best remembered for the remarkable catch he made to preserve Mark Buehrle’s perfect game; Wise is summarily forgotten for his career .260 OBP / .645 OPS.

Posted in 2011 Spring Training | Tagged | 1 Comment