Well, not really, but you’d think by reading these alarmists tweets and blog posts about Sterling Mets (aka Fred and Jeff Wilpon, accompanied by the always lovely, always talented Saul Katz) looking for “strategic investors,” that it was.
I’m here to tell you that…this aint that big a deal.
Sure – it looks bad. And I’m not here to sugarcoat things. This isn’t pretty. However, this is more in response to the whispers (or vocal minority Tea Party-like activists) speculating as to why the Mets weren’t spending any “money” this offseason, when they a) didn’t cut their $130+ million payroll, and actually invested wisely for once and b) brought in a Dream Team of Front Office Executives who, you know, work for free (that’s a joke – they are all getting paid as far as I know).
What the Wilpons are doing is what we like to call “hedging our bets” in business lingo.
Let’s examine the evidence.
Yes, we know that Fred Wilpon and Sterling Equities was taken to the cleaners by Bernie Madoff, well, I’m not sure that’s accurate, since they actually took their investments out and made money…on money that certainly wasn’t there. So that means, they were being sued by the victims of Madoff families Again, this was not private knowledge.
The bad news for Freddy and Jeffy and Uncle Saul is this: Sterling Equities is a real estate investor. The Sterling Mets and entertainment arm is just an arm of their umbrella conglomerate. The Mets weren’t the only subsidiary of theirs to get hit by this. Sure, they were affected, but their other investment units were as well.
The Mets are the “sexiest” division of Sterling Equities to try to divest. And divest is a kind term, because they aren’t selling the whole team/unit/baseball operations, according to today’s news. They are looking for “strategic partners” to “invest.” Keep in mind, once upon a time, small time private equity investor Fred Wilpon was 5% owner of the Mets. We didn’t hear a peep from him till Nelson Doubleday drank away his savings and his publishing dynasty was sold, leaving the Mets free and clear for a 50/50 partner.
The Mets are the most attractive investment opportunity for any potential investor out of a company that is being sued, potentially in the arena of multi-millions of dollars (probably more).
Please keep in mind that I don’t think this has prohibited the Mets from spending this offseason. There’s certainly more to the big picture. From the baseball standpoint, they were a 4th place team when Omar Minaya took over in 2004, and they are a 4th place team now with a significantly higher payroll and NOTHING to show for it.
Attendance, as a result, has dropped off so dramatically, that they need to bring in all sorts of perks, MVP programs, and reduced ticket prices for season ticket holders to draw in the crowds. Therein lies the problem. The Wilpons – like their decision to invest however much with Bernard Madoff at one point – are the victims of their own bad decision making. We’ve seen it for years in Flushing, that they put the wrong guys in charge of the operations. I have no doubt they’ve finally owned up that they need to do better by us fans(and let’s be fair – to their wallets as well).
But that doesn’t excuse them from not doing this sooner. In fact, I would argue they should have sold a portion of their baseball operations years prior to the whole Madoff situation. The reason being is that they were just plain dumb with their baseball investments, and it trickled down to the effect on the fan.
Matt Cerrone, and several people on Twitter and everywhere else, were saying that the Steinbrenners actually hold the largest percentage, as a family entity, in the Yankees, but have several “silent” investors (I don’t know the structure, but think like 5 investors, 5% here, 10% there – I could be under- or over-estimating). The Steinbrenners are still majority owners in that they make more of the decisions as a cohesive unit, the investors just, you know, want to make money. And it’s probably why they’ve had the luxury of being over the luxury tax threshold and can spend with reckless abandonment. The Yankees don’t have a problem with making money. The Mets do.
The fact is the Mets have spent like drunken sailors over a course of over 20 years at this point. They have zero to show for it and a fan base that’s become disinterested. The Mets are a sexy investment opportunity. On top of this, a downturn in their primary investment opportunity (real estate), the lawsuit of the “survivors” in the Madoff situation, and lackluster return on the Mets has finally having them cry uncle. I say, it’s about friggin time.
My mother is going to be so proud that I am using my skills from my MBA and my love of baseball together…I’m not trying to sugarcoat this whole thing, but there’s more to it than meets the Madoff /Mets eye. It’s not going to be pretty but seriously, we’re not doing ourselves any favors by all this speculating about how bad it’s going to be.
By Taryn Cooper