The New York Daily News 1st reported that according to sources the Mets have repaid their $25M loan to MLB, the $40M bridge loan to Bank of America plus additional club debt and have closed on the selling of 12 minority shares for a total of $240M.
Brian Costa, Jim Baumbach, Andy McCullough and Ken Rosenthal have since reported via Twitter the same news according to sources familiar with the situation. The Mets have made no official confirmation of this as of yet.
36 comments
rustyjr
3/19/2012-8:17pm at 8:17 pm (UTC -4)
Not happy
Mr North Jersey
3/19/2012-8:20pm at 8:20 pm (UTC -4)
I am in that I can finally get past this whole clawback situation hanging over the team like the “Sword of Damocles”.
Hazmet
3/19/2012-9:03pm at 9:03 pm (UTC -4)
Exactly. Sure I’d like different owners but it ain’t happening. So, next best thing: start to get out from under some of the debt and start getting the house in order. Underline on start.
MetsFan4Decades
3/19/2012-9:33pm at 9:33 pm (UTC -4)
This has got to be better for Met fans than a trial, whereby whoever lost would have just appealed and dragged this out for who knows how long.
Mrose
3/19/2012-9:59pm at 9:59 pm (UTC -4)
Not happy? As said below, the Wilpons aren’t going anye
Mrose
3/19/2012-10:01pm at 10:01 pm (UTC -4)
Damnit, not going anywhere but if they can get a competent gm while having money to spend, it may just work out. Look at the gms in power for them when they have had money Duquette, Phillips and Omar.
Let’s let this play out now
TRS86
3/19/2012-10:43pm at 10:43 pm (UTC -4)
I am more than happy, I think.
darknova306
3/19/2012-9:14pm at 9:14 pm (UTC -4)
Get used to the Wilpons as owners. It’s gonna continue like this for a long time. No need to whine about it. They may not be great owners, what with the bad GM decisions *cough*Omar’s extension*cough*, but they spend when they’re not broke. They haven’t exactly treated the team like a small market team unless they were totally broke and had to (sorry to the fools that think they’re entitled because it’s a NYC sports team, STFU idiots).
darknova306
3/19/2012-9:17pm at 9:17 pm (UTC -4)
And no, they’re not out of their dire financial straits yet, what with the paying back the minority shares with interest in a a few years and the actual clawback settlement payments in 4 and 5 years, but it’s likely they’ll be around longer than that. Before then, the kids will be playing to a level that has the Mets above mediocrity and the whiny morons will be back in the stadium paying for tickets and beer because they see a team that’s winning games more often than not.
Hazmet
3/19/2012-9:32pm at 9:32 pm (UTC -4)
One of the lesser things I’ve seen talked about is that they will be looking to recover $178M in losses as Madoff investors as part of future distributions from Picard settling claims. So, they actually could end up clearing more than the settlement they made today. Not likely, but one never knows.
With this whole 12 partial shares I just keep envisioning they are like the movie the Producers where they end up selling 100 twenty percent shares….
darknova306
3/19/2012-9:35pm at 9:35 pm (UTC -4)
Yeah, with all the talk and speculation, I haven’t been able to sift through and figure out exactly what the hell is going down with this settlement. If someone figures out the specific details and could post it in an easy to digest format, that might help this whole discussion.
MetsFan4Decades
3/19/2012-9:56pm at 9:56 pm (UTC -4)
I did a lot of reading today and now my eyes are just about glazed over. LOL…
The gist of what I took out of what I read:
- Way I understand it is they settled out of court for $162.
- They are on record looking to get relief for $178 million as part of the net losers/victim deal.
- Depending on how much they get of that $178 MIL (50 cents on the dollar? 60 cents? more?), they will eventually wind up owing way less than $162 million.
- They don’t have to start paying back the $178 million for a full 3 years.
MetsFan4Decades
3/19/2012-9:57pm at 9:57 pm (UTC -4)
Shoot…
- settled out of court for $162 million.
Have a tablet I was typing this on. I don’t think I’ll ever get used to using that to actually post on blogs. LOL.
MetsFan4Decades
3/19/2012-10:21pm at 10:21 pm (UTC -4)
Sigh…
And I’ve got the judge’s name spelled wrong. But y’all know who I was referring to.
Judge Rakoff
MetsFan4Decades
3/19/2012-9:43pm at 9:43 pm (UTC -4)
Boy, Howard Megdal is apparently one pissed off dude:
http://www.capitalnewyork.com/article/null/2012/03/5510373/wilpon-group-settles-madoff-victims-freeing-them-deal-more-pressing-deb
He might have been better off waiting a day until the dust settled to post his editorial on all this. The fact that the Wilpons now have 12 investors and have promptly paid off these 2 loans makes some of this article seem like….well, a stretch.
I read Megdal’s book. Interesting read especially given the fact that I don’t believe he had all that much inside information and read like a lot was supposition on his part, which he’s entitled to.
But this article is just a tad over the top.
For example:
‘Ultimately, it was the very precariousness of the Wilpon group’s financial position that motivated the trustee to settle…
>>>>yeah, I’m not buying this above.
‘It’s likely Picard would have fared well in front of a jury…’
>>Considering Ratcliff thought Picard would have a difficult time selling willful blindness, not exactly sure why Megdal thinks this is likely, not to mention the fact that the judge was also entitled to overturn the jury’s verdict.
‘That the $162 million ultimately comes from the pool of Madoff net losers should be vaguely galling to the actual net losers, since it means they are paying for Wilpon’s inability to pay.
>>Like it or not, the Wilpons are ‘actual’ net losers as well.
‘But a trial, which might at least have provided some finality to a saga that has gone on for far too long in the eyes of Mets fans—it was scheduled to end on April 3, just two days before the Mets begin the season by hosting the Braves—has been averted.’
>>Come on, no matter who lost, this wasn’t going to be over with on April 3rd as the appeals process would have dragged this on for who knows how long.
Mr North Jersey
3/19/2012-9:55pm at 9:55 pm (UTC -4)
Rather than reporting the story Mr Megdal goes into bouts of speculation on his part with comments like,
“The owners, led by Mets C.E.O. Fred Wilpon, face a huge amount of debt, and any judgment that forced them to come up with any significant amount of money quickly would likely have forced them into bankruptcy or an outright sale of the team, or both. ”
“It’s likely Picard would have fared well in front of a jury. After all, whistleblower Noreen Harrington, who has testified that Wilpon’s partner Saul Katz knew that something was amiss with Madoff, didn’t disappear, nor did the mountain of evidence and 18 witnesses Picard planned to call.”
Today there were no tweets of “Fascinating news” from him unlike last week when Rakoff ruled on the $83M.
My point in all this is that in my opinion Mr Megdal didn’t report the story but rather tried to justify what he felt the story should be which in my opinion was that he felt the Wilpons would lose the case up until today when they wound up settling.
Yet if you read the NY Times Richard Sandomir’s article you come away with an unbiased reporting of the facts in my opinion.
http://www.nytimes.com/2012/03/20/sports/baseball/mets-owners-pay-162-million-to-settle-madoff-suit.html?_r=1&partner=rss&emc=rss
MetsFan4Decades
3/19/2012-10:00pm at 10:00 pm (UTC -4)
‘My point in all this is that in my opinion Mr Megdal didn’t report the story but rather tried to justify what he felt the story should be which in my opinion was that he felt the Wilpons would lose the case up until today when they wound up settling. ‘
This was exactly my take on this as well.
That and he would have been better off waiting until at least tomorrow. Looks a little more foolish b/c they not only have 7 investors, they apparently had 5 more waiting in the wings. And they promptly paid back 2 big loans today. So much of what he tried to spin there to support them likely going bankrupt is off the table.
MetsFan4Decades
3/19/2012-10:05pm at 10:05 pm (UTC -4)
And I just want to add…
He’s of course, entitled to his opinion in all this.
But maybe after I read the book, then those who went after him on MMO which he responded to, and some of the tweets when he went after Cerrone concerning his post on Megdal being barred from the Mets clubhouse, it was a little easier for me to read this with the slant of taking away what I did from this article – which was him almost trying to justify his earlier reporting on the subject by the ‘spin’ in this article today.
IMO, after he published his book, he should have just kept responding: ‘that’s my story and I’m sticking to it’, b/c you’re never going to win any debates with half the posters in a blog type setting.
Hazmet
3/19/2012-10:15pm at 10:15 pm (UTC -4)
He tried to make his bones off the Wilpon-Madoff fiasco and it didn’t pay off, including his losing blogger access or whatever credentials he had. He weighed in too far against the Wilpons and burned his bridges and maybe now it’s a matter of his 15 minutes being over and he’s been robbed of what he thought would be a verdict against the Wilpons and then justification for his position. Could be he’s just venting his last death rattle of vitriol on this matter. Would have been wiser to let the dust settle today to afford himself more perspective on the aftermath.
Paul Festa
3/19/2012-10:33pm at 10:33 pm (UTC -4)
The ideal situation would have been the litigious clobbering of the Wilpons and Katz. That didn’t happen. Instead, we have bad owners getting back on their financial feet. The upshot? Sandy Alderson will eventually have money to spend.
“Prayer, Mr. Saavik. The Klingons don’t take prisoners.”
Mr North Jersey
3/19/2012-10:44pm at 10:44 pm (UTC -4)
Romulan scum
Mr North Jersey
3/19/2012-10:46pm at 10:46 pm (UTC -4)
I always liked that phrase. Don’t know why.
Hazmet
3/19/2012-10:37pm at 10:37 pm (UTC -4)
From the Bob Klapisch article here’s the rest of the debt summary:
The family owes $430 million in principal of a loan against the team, due in 2014. They owe $450 million in principal of a loan against SNY, back in 2015. They owe an estimated $600 million, due in $25 million increments every six months, on the ballpark.
A nice quick summary even I can understand….
TRS86
3/19/2012-10:38pm at 10:38 pm (UTC -4)
How many of those loans can be rolled over into new loans when they come due? Isn’t that a standard practice?
Hazmet
3/19/2012-10:49pm at 10:49 pm (UTC -4)
Very true this could be done and probably will be. Forgot about that after reading so much chit on this today.
Looking at those numbers it also occured to me that with those kinds of debts the only way to get out from under for them is to keep the club. Even if they were to sell for say $800M – $1B they’d still be in the hole for $500 – $700M. Looking at it that way why would they sell? They’re just as well better off holding the team to burn down the debt if they get this turned around.
Stickguy
3/19/2012-11:10pm at 11:10 pm (UTC -4)
I said early on when people were screaming about MLB should force the wilpons to sell that quite possibly it was impossible for the very reason that they were too upside down to get away with it.
No different than someone with a house in Vegas that owes 400K but can only sell for 200K. As long as they can make the payments they can stay in it, but unless they have a major load of cash to cover the shortage, no chance to sell it.
MetsFan4Decades
3/19/2012-10:55pm at 10:55 pm (UTC -4)
The family owes $430 million in principal of a loan against the team, due in 2014.
Wonder how long ago that load was taken out? And was it to help finance the building of the stadium?
This is all too much for my 9-5 job middle class head.
trs86
3/20/2012-8:12am at 8:12 am (UTC -4)
I mentioned this on the other thread but I would assume that loan can be rolled over into another loan. I don’t think any person would be paying off a 430M dollar loan at one time.
Stick
3/20/2012-8:57am at 8:57 am (UTC -4)
that has been mentioned other places. Big companies do this all the time. In effect, I think it gets treated almost like an interest only mortgage.
sounds like a lot, but if you do the math, 400mill at 7% interest is 28/mill year. that does not sound nearly as bad for a company with the revenue (between SNY, the Me tickets and other stuff) they have.
Ceetar
3/20/2012-9:07am at 9:07 am (UTC -4)
Having the team profitable again (depending on how you do the math) also raises their earning potential and helps them get better loans and deals and what not.
It amuses me that people go on and on about the loans without doing research into the other teams. Do the Yankees have this much debt that they just string along? The Nationals? Sure, costs are higher in NY too.
Another thing is that some people talk about the two bridge loans and the $65 like it’s “gone” and now they only have $175 to mess with, etc. But that’s not true either. I’m sure they paid some interest on it, but that $65 went to payroll and operating expense. It’s not like they have to pay Bank of America AND pay the players what they’ve already paid them using that money.
TRS86
3/20/2012-9:22am at 9:22 am (UTC -4)
True but the bigger question is how do you become profitable? If the issue is mostly the fact that the cooperate seats are empty, how do you fill those? Not even the thoughts of a good young nucleus will fill those, considering the economy a winning team might not either.
Ceetar
3/20/2012-9:24am at 9:24 am (UTC -4)
I think cutting payroll 50million goes a long way. That should easily make them profitable at roughly the same attendance as last year.
TRS86
3/20/2012-9:52am at 9:52 am (UTC -4)
Well they lost 70M according to Sandy right?
Ceetar
3/20/2012-10:13am at 10:13 am (UTC -4)
70million is the difference between payroll and ticket sales. Doesn’t appear to include naming rights, SNY, concessions, parking, advertising, etc. (or the costs associated with their own advertising, running the building, etc) But i’m hard pressed to believe that other stuff doesn’t result in a lot of money for the Mets.
TRS86
3/20/2012-10:39am at 10:39 am (UTC -4)
Considering how new the stadium is and all the other interest loans they have to pay, I would imagine that only helps them break even on those loans by themselves.
Stickguy
3/19/2012-11:17pm at 11:17 pm (UTC -4)
Put me in the “good news” camp. I never thought that fred and the boys were going anywhere voluntarily, so if this dragged on it was going to take the team all the way down the drain with them.
I never thought they were terrible owners. That is for a guy like Loria. Dumb maybe, but they cared and spent (wasted of course) plenty of money.
My hope is that Sandy still gets time to implement the sorely needed changes to rebuild the structure of the organization (lay the foundation). But I still don’t expect him to be around more than a couple more years.
And, the best thing as others noted is taking the cloud of uncertainty off the team. Hopefully this will lead to some actual moves toward trying to compete while building the team back up, and spending money in smart areas (such as locking up the young talents).