Today’s RDM Rewind was written by Kingman 26 back on 2/5/2011. The title was “Opinion: It Clearly Is Time To Face Reality On The Wilpon Situation“.
It appears that the RMS Met Titanic is taking on water faster than the original.
It is becoming clearer and clearer that not only have the Wilpons been basically lying about everything since the WFAN appearance at the end of 2009, but much of the entire structure of the current Met organization was very possibly not only backed by Madoff’s non-existent profits—those profits may have even largely made Wilpon control of the team possible in the first place.
Information suggests that Fred Wilpon received the necessary loans to buy out Nelson Doubleday based on his Madoff-based wealth.
The Wilpons have long stated that their personal holdings, the Mets, and Madoff-related issues were unrelated.
This was the biggest lie of all.
Major league baseball supplies a generous line of credit to all teams for various purposes, and now the Mets have used up theirs.
There are suggestions that not only are the Wilpons in debt well beyond their eyeballs, but the current situation points to their potential inability to continue to meet loan payments on their gargantuan debt. One phase of this debt is apparently nearly $50 million a year in Citi Field-related bonds. There is also another roughly $25 million a year in other Met-related debt. So this is about far more than just a Madoff settlement.
When these same eventualities hit Texas Ranger ownership, the team was put up for sale and changed hands.
We may very well be far into very similar waters with the Wilpon-owned Mets.
Fred Wilpon right now is fighting for his entire empire.
The entire Met financial structure has been directly tethered to the Madoff empire of deceit.
Documents state that Madoff accounts were often used for withdrawals during the season to meet Met-related expenses. They also suggest strongly that multiple sources made clear to Fred Wilpon and associates that Madoff’s returns were impossible–that the math did not add up; one large financial house advised them that they would have nothing to do with something as questionable and risky as the Madoff empire.
The Met response to this has been that it does not prove anything. Perhaps true, but it is also very damning as well. The reality might in fact be that the Wilpons may have indeed known–or at least had an idea–that something was rotten in the kingdom of Madoff, but once they realized, Met finances were far too deeply tied in with Madoff to extricate themselves from his world.
If the Wilpons cannot make debt payments, have exhausted their MLB credit line, and face the likelihood of years of litigation ultimately requiring them to pay a nine-figure penalty while at the same time having to continue to pay down their existing debt, the pressure will soon be on them (if it is not already) to sell their entire stake in the team.
Major league baseball surely has been worried about the Met situation, as Selig’s overt pressure on the team to hire Alderson showed. Who knows what the topic of the recent Wilpon-Selig meeting was?
As they have been lying about all aspects of the case, it is reasonable to speculate that the current attempt to sell 25% of the team is not only to build a war chest for a future settlement; it might also be needed to service current debt and simply meet operating expenses. Fans may be forgiving in some cases, but bankers surely never are.
Met financing has seemingly largely come from the backing of Madoff and then MLB; without those sources and with the recent economic situation clearly not favorable to Fred’s other businesses, this move to sell a share could indeed simply be a maneuver to keep the whole empire afloat a while longer.
Regardless, the days of pretending that Madoff did not affect the Mets and that the situation has little to do with on-field realities are now over. Alderson even recently commented on the team’s current payroll being significantly higher than management would like it to be. What should this tell is?
Unfortunately, that it is entirely possible that Met operating expenses are a major concern as well.
It is clearly time to speculate on the future.
One intriguing name is that of Mark Cuban. The Mavericks have become one of sports’ most consistent winners under his leadership. He made himself hugely successful and wealthy at a very young age on the merit of his own intelligence and hard work.
Yes he can embarrass himself, but he also can be very honest and self-deprecating.
In a sport with no salary cap and with a team with the revenue potential of the Mets and SNY, Cuban might be one of the few people who could come in and buy the Mets as a single owner, and be expected to possibly rival the Yankees in spending.
Such speculation may be premature, but what is not premature is taking a cold, hard look at the very slippery man at the helm of the Mets and the very questionable way that he has apparently built his immense fortune.
It is not an exaggeration to say that the entire Wilpon Met era may have been built on deceit. If it turns out that the money to buy out Doubleday, as well as Citi Field financing, were largely made possible due to Madoff pseudo-wealth, and if the end of the Madoff era and its resulting troubles have caused debt payment to be jeopardized, then it is very, very possible that the house of cards which has begun to crumble will indeed come tumbling down.
And if all of this does turn out to be true, Fred Wilpon will be a man for whom few tears are shed.