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As Frank McCourt prepares for an Aug 16 hearing, where the topic of whether the Dodgers can auction off their television rights will be argued, part of his focus is a coast away with another beleaguered MLB club.
Yes, the Mets are in financial trouble through the Wilpons and Saul Katz’ association to Bernie Madoff. A judge has ruled that the case against Sterling Equities (the Mets ownership) should not be dropped, and with that (and declining attendance), the Mets are running deeply in the red.
McCourt will say that MLB plays by different rules. That the cozy relationship that Commissioner Selig has with Fred Wilpon has allowed the Mets to take in a $25 million loan from MLB’s credit facility, and that the Mets should be under watch as closely as the Dodgers.
It’s an apples to oranges comparison, but none the less, it’s likely something that will be brought up. JPMorgan Chase sent a letter to the Mets last month in which they said that the club had breached their $500 million loan 13 different ways. JPMorgan wants the Mets to restructure that deal before they make any deal with David Einhorn, the hedge-fund investor who is looking to invest $200 million in the Mets to purchase a 33 percent minority interest. The deal that has yet to be fully consummated (it was supposed to be completed by the end of June, but has dragged on well past that point) would have Einhorn paid back in three years with his minority stake reduced to about 16 percent. If not paid off in that time, Einhorn has sought a provision in which he could purchase controlling stake in the Mets for $1.
Where McCourt might really try to use the Mets situation against Selig and the league would be if the Mets were to fall into default. According to the New York Post article, JPMorgan did not put the team in default, but the letter sent prior puts it on notice so the bank could more easily pursue that course in the future, a source said.
McCourt (and Selig) will be watching the Mets closely… if they aren’t already.
Maury Brown is the Founder and President of the Business of Sports Network, which includes The Biz of Baseball, The Biz of Football, The Biz of Basketball and The Biz of Hockey, and is a contributor to Forbes SportsMoney blog.. He is available as a freelance writer. Brown's full bio is here. He looks forward to your comments via email and can be contacted through the Business of Sports Network (select his name in the dropdown provided).
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