Amazin’! Mets owners refi $450M in loans
“While the financial terms could not be learned, some of the proceeds are expected to go toward funding the cash-strapped team’s day-to-day operations.”
I have no idea what to think about the Mets financial situation anymore. Is it better or worse? Is this a good sign that the lower credit rating by one organization didn’t stop them from getting a new loan? Is it a bad sign that the Wilpon’s needed this loan just to survive? Is it a good sign that they now have the freed up cash from Wright, Bay and now the refinance to sink in day to day operations or is it a bad sign that coupled with the fact they have this money and they still haven’t spent any of it that they are still just hanging by a thread? Do we believe that they have the money to spend and are just choosing not to because the players don’t fit the plan or do we believe that it’s just a front and the Wilpon’s can no longer afford to operate in NY and are putting off the inevitable?
Again. I know already what some believe and at this point I am not sure I could disagree with either side anymore. As SRT and NJ both mentioned on MMO, as I quote SRT: “There’s a plan in place. You and many other Met fans may not like it, but the plan is there and they’re working towards it. Only time will tell how successful it will be.”
49 comments
TX
1/3/2013-9:47am at 9:47 am (UTC -4)
How is a refi a bad thing? It’s done every day by businesses and individuals alike.
Now I will say that the lack of activity, even for an actual proven BP guy or an OF guy (flipping sign Hairston already so I can stop hearing about everyone complaining about the Mets not signing any major leaguers…), is annoying, it doesn’t mean that they didn’t try. We’ll never know. They could have called up Ludwick, Ludwick’s agent could have say “uh, no.” and that was that.
I say they should sign Alvarez, Capps, and I guess Young, though that makes me a little sick to my stomach to say that.
TRS86
1/3/2013-10:18am at 10:18 am (UTC -4)
My issue isn’t with the refi, I am saying it could be concerning because of this statement:
““While the financial terms could not be learned, some of the proceeds are expected to go toward funding the cash-strapped team’s day-to-day operations.””
So the fact that it’s possible that they need this refi, just to get by period.
TX
1/3/2013-10:44am at 10:44 am (UTC -4)
Expected, but not for certain.
And yes, if they are holding on with a death’s grip, then 2013 is going to be the year of the kids (because it will need to) and we can only hope they can fill in better in 2014 with all the cash coming off the books.
HobokenMetsFan
1/3/2013-9:51am at 9:51 am (UTC -4)
We really shouldn’t be surprised by this as it’s been clear over the past 3 years that the Wilpon’s will do anything they can to retain ownership, even if it means being universally loathed by the fanbase they serve and the city they reside in.
The tough question is, however, wouldn’t we all do the same?
Obviously none of us are happy to see Fred and Princess still at the helm, but there isn’t too much we can do right now unfortunately.
Its a double edged sword as I really want to get out to Citi this year and watch the young kids (its like 45 minutes on the subway from hoboken if you catch the trains right….silly not to go out there), but it also makes me sick to give money to the Wilpon’s.
Ugh..
srt
1/3/2013-9:56am at 9:56 am (UTC -4)
‘…Wilpon’s will do anything they can to retain ownership…’
This.
IMO, the only thing that’s going to save the Wilpons retaining ownership is a winning team. Question becomes will they field that winning team before the Mets completely run out of money and can’t meet the bills?
HobokenMetsFan
1/3/2013-10:04am at 10:04 am (UTC -4)
That’s the million dollar questions! (haha sorry, I had to)
One would think the Wilpon’s know this, and make an attempt to put a team on the field that has an actual OF just for this very reason.
“Got to spend money to make money”
TRS86
1/3/2013-10:21am at 10:21 am (UTC -4)
But got to have money to spend money to make money….
Like I said, I think sometimes life backs into a good circumstance.
I think the Mets needed to rebuild and change their approach, it doesn’t matter to me that the finances are what caused the change if the end result benefits the team. Now that being said, yes when those players are ready they have to spend and spend well. The Phillies are a good model of this.
TRS86
1/3/2013-10:23am at 10:23 am (UTC -4)
Just to further this: The Phillies payroll.
2012: $172,093,902
2011: $165,976,381
2010: $138,178,379
2009: $113,004,046
2008: $ 98,269,880
2007: $ 89,428,213
2006: $ 88,273,333
2005: $ 95,522,000
2004: $ 93,219,167
2003: $ 70,780,000
2002: $ 57,954,999
2001: $ 41,663,833
2000: $ 46,900,000
srt
1/3/2013-10:34am at 10:34 am (UTC -4)
I 100% agree that you don’t need a payroll approaching 200 MIL to compete, not even in NY. Maybe circumstances with the Wilpon’s Mets forced the issue of looking at their organization and making changes top to bottom – but that probably would have happened sooner or later. Omar’s plan wasn’t working. Even w/o Madoff, I don’t believe Omar would have been around much longer.
As for the Phills, they’re entering the phase we were in circa 2009. They spent, they traded prospects for proven MLs and they enjoyed a 5-6 run at post season. Problem was, they pretty much ignored the going-back-down-the-hill once they reached the top.
And I’ll be enjoying the heck out of watching them scramble.
HobokenMetsFan
1/3/2013-10:44am at 10:44 am (UTC -4)
“But got to have money to spend money to make money….”
Yup, spot on here. However its the fringe moves that were *not* made this year (or at least haven’t been made yet) that are the most damning.
This is a great read (if you haven’t already) by Howard Megdal which illustrates my point a little better
http://mets.lohudblogs.com/2013/01/02/andrew-brown-right-and-wrong-for-the-2013-mets/
TRS86
1/3/2013-10:52am at 10:52 am (UTC -4)
Sorry but after how badly he botched the Madoff issues I don’t give a damn what he thinks.
Prismo
1/3/2013-11:11am at 11:11 am (UTC -4)
What did he do with Madoff?
srt
1/3/2013-11:26am at 11:26 am (UTC -4)
Prismo: Think trs is referring to Megdal’s book. ‘Wilpon’s Folly’.
Prismo
1/3/2013-11:43am at 11:43 am (UTC -4)
Thanks 4D, I’m just curious as to how he botched it. I just haven’t heard about this before.
I know he wrote that book and the Mets got pissed at him and took away his beat writer privileges.
TRS86
1/3/2013-12:33pm at 12:33 pm (UTC -4)
Joe D did a lot of the research I think but basically he went out of his way to say a bunch of stuff as fact that was absolutely false just to push his own agenda.
Stick
1/3/2013-12:50pm at 12:50 pm (UTC -4)
that chart matches the Mets, and i remember looking at some other teams, and it is a common trend.
payroll lags the peak of success most of the times. You build the team that finally clicks, add a few pieces, win, then end up (over)paying a lot of the young core as they become aging veterans. And/or go all in on a few high priced mercanaries. In the phils case, they did both.
Stick
1/3/2013-1:51pm at 1:51 pm (UTC -4)
boken, of course we would all do the same. Every business owner pretty much would do the same.
It is a little misleading to say that the Wilpons are trying to “save” the team for themselves. Really what they are doing is trying to make the team financially stable. something that a new owner would also be concerned with!
srt
1/3/2013-2:01pm at 2:01 pm (UTC -4)
Well, maybe ‘save’ is the wrong word.
‘Hold onto’?
Not a doubt in my mind the Wilpons are moving towards having the team pay for itself. Problem is….will that happen (increased revenues?) before some of these big bills owed to the stadium and the like kick in?
Prismo
1/3/2013-10:22am at 10:22 am (UTC -4)
I think it’s just too hard to speculate on this without the details of the refinancing. Of course, it wouldn’t shock me to learn they took some cash in the short-term to keep the Mets afloat while agreeing to take a bigger hit in the long-term. That would be bad.
TRS86
1/3/2013-10:25am at 10:25 am (UTC -4)
It is very hard to speculate on the impact, like I said I am torn. Did they do the Bay, Wright and Dickey deals because they couldn’t afford to do otherwise or because it was what was best for the team or to free up money for this year….
Prismo
1/3/2013-10:34am at 10:34 am (UTC -4)
To free up money to operate the team for this year. That should be blindingly obvious by now.
srt
1/3/2013-10:35am at 10:35 am (UTC -4)
Yeah, I pretty much agree with this as well.
TRS86
1/3/2013-10:51am at 10:51 am (UTC -4)
To operate an 80M payroll or a 100M?
Prismo
1/3/2013-11:12am at 11:12 am (UTC -4)
To operate an 80M payroll and call it a 100M payroll.
darknova306
1/3/2013-11:58am at 11:58 am (UTC -4)
Until we know firm details of the refinancing, it’s hard to know how to react. Honestly, if you have the chance to refinance debt so you pay less on it, you do it unless you’re a moron or just hate money. If it turns out the refinancing was just to restructure the debt the way they restructured Wright’s contract, so they pay less now but more later, then the entitled NY/NJ/LI area fans that think “an NY team has to spend tons of money because we deserve it” are going to be disappointed for years to come.
As with everything else the Mets do, this is probably a bad sign of things to come, but that’s still just speculation.
gategem
1/3/2013-6:10pm at 6:10 pm (UTC -4)
Without knowledge of all the details I’ll speculate that this may be another positive step from a wiser and smarter Wilpon ownership. How can you criticize refinancing at today’s interest rates? But as I give the subject more thought it is the Wilpons and Mets fans will continue to suffer the curse of the Wilpons.
TX
1/3/2013-12:02pm at 12:02 pm (UTC -4)
Anyone know the date when Super 2 won’t apply to TDA or Wheeler? Is it 20 games into the season?
Prismo
1/3/2013-12:26pm at 12:26 pm (UTC -4)
I did some research and it looks as if they’ll need to sit out the first ~50 days of the season to likely be eligible. So we’re talking 2nd half of May.
I don’t think Wheeler comes up that soon anyway unless there’s an injury to the rotation in place or someone is just performing horridly.
TRS86
1/3/2013-12:37pm at 12:37 pm (UTC -4)
Good luck:
http://kingsofkauffman.com/2012/10/23/blake-wood-and-fun-with-super-two-calculations/
Prismo
1/3/2013-12:45pm at 12:45 pm (UTC -4)
Yep that’s pretty much what I did.
A total year is 180 days of service time.
It seems that ~130-140 is the cutoff for Super 2 status, which means they’d have to miss 40-50 days to qualify. If we start the season April 1 to keep things simple, 40-50 days bring us to smack in the middle of May.
Stick
1/3/2013-12:48pm at 12:48 pm (UTC -4)
give it a couple weeks to make sure, and target 6/1 for the future to arrive!
TX
1/3/2013-1:02pm at 1:02 pm (UTC -4)
I agree that we should not see them come up prior to the Mets gaining an extra year of control. Even barring something major, like 2 SPs going down, I would think some form of McHugh, Hefner, etc. will be there prior to Wheeler coming up.
Stick
1/3/2013-12:46pm at 12:46 pm (UTC -4)
in a vacuum, if it is lowering the cost of the debt, it is a good thing.
from the various reports over the years, the way I piece it together, what is killing them is they borrowed way too much, basing it on the poor assumption that attendance would stay at ~ 3mill. Oops.
But, they also had a lot of ST huge debt payments (stadium bonds? something like that) where they owed whopping payments ($50mill 2x year for 4 years? ).
so, the huge cash crunch (and without uncle Bernie to dip into).
so, and I bet this was always part of the plan (at least as the back up), as the big payments come due, they will be refinanced to smooth out the cash flow.
so all these deferals, refis, etc. are not exactly to cover day to day operating expenses. They are needed because of the huge sucking up of $$ that the debt load is doing. Get that down to a manageable/normal level, and most likely operating expenses are a big non issue.
In some ways, it is like the government. When you are spending 1/2 your income on debt service and interest, it does not leave much for living expenses!
gategem
1/3/2013-6:16pm at 6:16 pm (UTC -4)
Now if only the Wilpons could print money. Well, actually they can and it could result in the Wilpons sharing a cell with their buddy Bernie.
wanny
1/3/2013-2:23pm at 2:23 pm (UTC -4)
1. who wouldn’t refinance debt to have more cash in hand? a non-issue.
2. jason frasor must have really wanted to go to Texas. I can’t imagine that even the Mets wouldn’t have beaten 1 yr at 1.5m. he had to have better offers….
srt
1/3/2013-2:53pm at 2:53 pm (UTC -4)
OT: Marty Noble thinks we ought to do more than kick the tires on trading for Stanton:
Mets should try to make a play to acquire Stanton
http://mlb.mlb.com/news/article.jsp?ymd=20130103&content_id=40839564&vkey=news_nym&c_id=nym&partnerId=rss_nym
greggofboken
1/3/2013-3:05pm at 3:05 pm (UTC -4)
He’s losing me with referring to Stanton as the “Dave Kingman of our times”.
I’m with some of the other sentiment expressed here on this topic. A deal like this would be premature on the Mets part. Noble seems to completely ignore what it would cost the Mets to obtain him. It’s one thing to mortgage the future…but in the Mets case, they’re still trying to build it. A farm system that just crept into the top 20 b/c of deals done a month ago isn’t dealing from any position of strength.
wanny
1/3/2013-3:14pm at 3:14 pm (UTC -4)
Ditto.
This is surprisingly hack-like from Noble. He doesn’t once consider the acquisition cost. Sure, the Mets should go after every big name and big talent. But whether it makes sense in light of the cost is the real question.
HobokenMetsFan
1/3/2013-3:21pm at 3:21 pm (UTC -4)
I was surprised by the story as well. I’d love stanton in the outfield, but not at the expense of a wheeler/d’Arnaud/harvey, etc etc.
HobokenMetsFan
1/3/2013-3:22pm at 3:22 pm (UTC -4)
…when taken in context of our current MiL system, like Gregg said above.
Stick
1/3/2013-4:43pm at 4:43 pm (UTC -4)
a team like Texas though, that might make a ton of sense. More win now ready, and sees way more loaded with top shelf prospects. and of course, more money to buy pitching with!
srt
1/3/2013-5:31pm at 5:31 pm (UTC -4)
As much as I’d like to see Stanton patrolling RF at Citi, I have to agree with this.
The only way it would make sense for the Mets would be if they could fleece Loria and not give up Wheeler or D’Arnaud or Harvey. I know Loria is crazy but he’s probably not stupid.
darknova306
1/3/2013-7:58pm at 7:58 pm (UTC -4)
If I ever see Stanton in a Mets uniform, I’ll cry. He’ll either have cost the entire farm system or he’d be a high priced 36-37 year old declining star. No thanks.
Stick
1/3/2013-9:59pm at 9:59 pm (UTC -4)
well, the simpler answer is, just do a better job at scouting and drafting and development, and your own damned Giancarlo for peanuts.
might be hard to believe, but he was only a 2nd round pick. #76 in the draft. 1 pick after the immortal Denny Almonte, and 1 pick before the Mets took the awesome Scott Moviel. And if you really want to cry, that was 1 pick prior to Freddy Freeman.
if you want an example of why the draft is imprecise at best (if not a crap shoot) Stanton is it.
Oh, and a big reason why the Braves and Marlins always seem to be producing top talents and the mets suck.
Stick
1/3/2013-10:03pm at 10:03 pm (UTC -4)
now I am depressed. I looked at the first round too.
Braves in 2007 took Freeman and Heyward in the first 2 rounds.
Mets had 4 picks, and took Vineyard, Kunz, Rustick and Moveil.
and you wonder why Omar got fired, and the minors were crap.
srt
1/4/2013-1:20pm at 1:20 pm (UTC -4)
Saw this link over on AA:
N.Y. Mets Owners Said to Obtain at Least $700 Million in Loans
http://www.bloomberg.com/news/2013-01-03/ny-mets-owners-said-to-obtain-at-least-700-million-in-loans.html
This can’t be good.
AA’s comment: ‘It’s well past the time where Bud Selig should have stepped in at this point.’
Can’t say I disagree with this.
Prismo
1/4/2013-1:29pm at 1:29 pm (UTC -4)
Holy Baerga that’s a lotta dough!!!!!!
Prismo
1/4/2013-1:31pm at 1:31 pm (UTC -4)
Maybe they should’ve obtained an 800 million loan and signed Josh Hamilton.
Stick
1/4/2013-1:55pm at 1:55 pm (UTC -4)
sounds worse than it is. Copied this from the brief article:
“The owners of the New York Mets obtained at least $700 million in loans to refinance debt, according to a person with knowledge of the matter.
The financing will be used to replace existing credit lines and provide additional funds to the parents of the Major League Baseball team”
basically, like I said was always the plan, they are refinancing the massive 1 shot debt payments coming due. maybe the original hope was they would have the cash to lump sum pay them off. But since they obviously don’t, they just took out a longer term loan to make the payment ans smooth out the repayment.
Sounds like someone that took out a balloon mortgage, and when it came due, did not have the cash to pay to balloon so they took out another mortgage to pay it off.