What may have seemed like a weekend at Bernie’s has turned into something far larger for the Wilpon family and the New York Mets. Bernie, is of course, Bernie Madoff, who was involved in the largest stock market ponzi scheme in US history. The Wilpons, through their Sterling Equities, funneled more than half-a-billion dollars in investments through Madoff. But, according to a suit filed by one Irving Picard, a trustee seeking to recover money lost in the Madoff ponzi scheme, Sterling saw a net gain of $48 million, as opposed to a loss in their investments.
The weight of that, and possibly other aspects such as sagging attendance and other debt service, has forced the Wilpons to now put up a stake of the club up for sale.
Fred Wilpon, Chairman and Chief Executive Officer of the Mets, and Jeff Wilpon, Chief Operating Officer of the New York Mets, issued a statement saying, “As Sterling Equities announced in December, we are engaged in discussions to settle a lawsuit brought against us and other Sterling partners and members of our families by the Trustee in the Madoff bankruptcy. We are not permitted to comment on these confidential negotiations while they are ongoing.”
The two added, ”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 of potential 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.”
It is unclear what percentage of the club is being sold, but according to Fred and Jeff Wilpon, they will be looking to retain a controlling interest.
“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.”
The question then becomes, who might be interested in being a part of such a structure. One or more silent partners might view the Mets as a solid investment over time.
According to Forbes, the club has never ranked lower than the third most valuable franchise in baseball when looking at information back to 2001. The Mets were approaching the $1 billion mark in 2009 ($912 million) when Citi Field opened, but saw a 6 percent decline for 2009 because the club cut ticket prices after seeing a backlash due to high seat pricing during the down economy. According to Forbes, “The move to Citi Field was a huge upgrade from Shea Stadium. The 54 new luxury suites and 7,600 club seats generated $95 million which was three times the premium seat revenue at Shea.” The club also has the most lucrative naming rights deal to date, a $400 million, 20-year deal with Citigroup that sees $20 million annually. The following shows the value of the Mets, according to the Forbes reports.
What seems clearer is who would likely not be interested. While there has been considerable discussion about whether current Dallas Mavericks owner Mark Cuban would be approved as a managing partner of any MLB club, Cuban would seem to not have an interest in playing the part of minority owner of any club – he is not the silent partner type.
Finally, maybe the person smiling the widest today is author Erin Arvedlund, who said in 2009 that Fred Wilpon would be forced to sell the team because of losses related to the Bernie Madoff scheme. While that isn't technically true (it is the legal proceedings that will determine that), it is an interesting thing to watch given that it was 2009. Dave Howard, the Mets' executive vice president of business operations, went on Fox Business Network, and said that the club would not be sold -- minority or otherwise -- grilling Arvedlund on the matter. Here's the clip from 2009: