Friday, January 28, 2011

Wilpons Looking for Minority Owners

UPDATE (1/28/2010 at 9:50 p.m.):  According to Ken Belson of the New York Times, the federal government is seeking $1B (yes, that's billion) in "claw back" money due to them being considered "net winners" in the Bernie Madoff scheme.  This explains why the Wilpons seem to be so eager to sell off a portion of the team.  They need money...badly.

UPDATE (1/28/2010 at 3:46 p.m.):  According to Mets advisor Steve Greenberg (via ESPN's Adam Rubin), there should be a "robust level of interest" at a 20-25% stake in the Mets.  Interesting.  I just happen to be setting the over/under on the Wilpon's ceding control of the team at 20-25%.  Weird coincidence...

Original Post (1/28/2011 at 1:23 p.m.):  You had to know this was coming.  As many of you may've known, Mets majority owner Fred Wilpon was taken for quite a ride by Bernie Madoff.  In the years since, many have speculated about the financial situation surrounding both the Mets and the Wilpon family.  Only now, are we starting to see how dire the situation may be.  In a statement released today, the Wilpons announced that the team was looking for "strategic partners" (read: minority owner or owners) to help ensure that the Mets organization has enough resources (read: cash) to be able to compete and win (read: hopefully reach .500).
"Fred Wilpon, Chairman and Chief Executive Officer of the New York Mets, and Jeff Wilpon, Chief Operating Officer of the New York Mets, issued the following statement:
As Sterling Equities announced in December, we are engaged in discussions to settle a lawsuit brought against us and other Sterling partners and members ofour families by the Trustee in the Madoff bankruptcy. We are not permitted to comment on these confidential negotiations while they are ongoing.
However, to address the air of uncertainty created by this lawsuit, and to provide additional assurance that the New York Mets will continue to have the necessary resources to fully compete and win, we are looking at a number ofpotential options including the addition of one or more strategic partners. To explore this, we have retained Steve Greenberg, a Managing Director at Allen & Company, as our advisor.
Regardless of the outcome of this exploration, Sterling will remain the principal ownership group of the Mets and continue to control and manage the team’s operations. The Mets have been a major part of our families for more than 30 years and that is not going to change.
As we have said before, we are totally committed to having the Mets again become a World Series winner. Our fans and all New Yorkers deserve nothing less."
Personally, I think Mets fans gave up on the idea of winning another World Series long ago, but that's besides the point.

In the short-term, this move has little impact.  The Mets will continue to operate as usual, and the team should be able to bring in more than enough revenue to cover the team's payroll and operating costs.  In the long-term, this could mean an organization-wide change.  As someone on Twitter pointed out earlier, teams who try to sell minority stakes in their franchises rarely end up being successful.  In many cases (see Tom Hicks with the Texas Rangers), they end up ceding ownership and control of the entire team.  If that scenario were to come to fruition, it might actually benefit the franchise long term.  The Wilpons have long been criticized for being too "hands on", and I have a hard time trusting anyone that keeps Omar Minaya employed for six years.

Needless to say, it's been an exciting couple of years in the world of baseball ownership.  Between the high profile divorce cases with Dodger and Padre ownership, and the bankruptcy cases with the Rangers and Cubs, never before has it looked so risky to own a baseball team.

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