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Home Pete Toms LWIB (Part II): Are the Wilpons and Katz Keeping the Mets? Plus Tidbits

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LWIB (Part II): Are the Wilpons and Katz Keeping the Mets? Plus Tidbits PDF Print E-mail
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Pete Toms Article Archive
Written by Pete Toms   
Wednesday, 08 February 2012 12:14

Last Week in Bizball by Pete Toms

This week, a second edition of “Last Week in Bizball”. Can Wilpon and Katz keep the Mets?, plus the tidbits.


Where to start with the Mets woes? Irving Picard, representing the victims of Bernie Madoff, is attempting to extract close to $400 million from Mets owners Fred Wilpon and Saul Katz (aka Sterling Equities). The Mets operating losses over the past 2 seasons are reportedly $120 million. In November, the Mets arranged a bridge loan from BofA for $40 million. MLB also loaned the club $25 million and both are expected to be repaid next month. The baseball club and Sterling’s RSN, SNY, combined, have a reported $375 million coming due in a few years. Attendance and ticket prices at Citi Field have dropped dramatically the past few seasons. This upcoming season will see the Mets slash year-over-year payroll by $50 million plus and the team is expected to stink. They also folded a minor league team this off season. Last month it was reported that the Mets had retained the services of “turnaround specialists” CRG Partners. CRG was one of the key players in the bankruptcy auction of the Texas Rangers. David Einhorn agreed to invest $200 million in the Mets, but the deal collapsed. But, unlike with Tom Hicks and Frank McCourt, MLB hasn’t wrested the Mets away from Wilpon and Katz. Oh well, we cynics think, eventually being an FOB won’t be enough to save the Mets owners. They‘ll soon go bust and the creditors will take over.

But, LWIB there was buzz amongst sports industry insiders that Wilpon and Katz aren‘t leaving MLB any time soon. In this SportsMoney video segment, big time sports banker Sal Galatioto of GSP (no, not MMA) predicted that the many reports of the Mets “near bankruptcy” are “greatly exaggerated”. Galatioto foresees the Mets current efforts to raise $200 million via the sale of 10 minority shares in the team @ $20 million per succeeding. He also sees a lot of value in the Mets media rights. Sterling owns approximately 70% of the RSN (SNY) which broadcast Mets games. TWC and Comcast own the balance. The banker notes the guaranteed value of these cable rights deals, “...when you have a media deal, like a cable rights deal, you’re going to get paid, whatever your rights fee is whether the product is good or the product isn’t good.”

LWIB, Richard Sandomir reported in the New York Times that the Mets are close to finalizing the sale of the $200 million in minority shares. Richard confirms the earlier LA Times report that Steven Cohen (also bidding for the Dodgers) is set to become a Mets minority investor. But Richard’s scoop, and the more interesting development, is that the Mets aforementioned partners in SNY will invest $80 million in the baseball franchise. Howard Megdal explained that TWC and Comcast are motivated to help Sterling maintain control of the club for a few reasons. First, because Sterling owns both the team and a majority of SNY, the RSN lowballs the club’s rights fee, which is good for TWC and Comcast. And, if Sterling is forced to sell the team there is no guarantee SNY would continue to control the Mets local TV rights. Losing the Mets would make SNY worthless because they don’t own the rights to any other properties of significant value.

LWIB, Bill Madden wrote that the expected $2 billion sale price of the Dodgers will be a big help to the Mets owners. According to Bill’s unnamed “industry insider”, if the Dodgers are worth $2 billion, the Mets must be worth $3 billion. “What that means,” said the insider, “is that the Wilpons can now go back to their banks, point to the value of the team, and say: ‘Lend us more money.’”



  • The Economist is the latest to weigh in on the debate over whether or not MLB’s introduction (imposition?) of their amateur draft in Puerto Rico in 1990 is directly responsible for a dramatic decrease in the number of players recruited there. This is a topical debate because MLB is considering doing the same in the Dominican Republic, the largest producer of players outside the US. Is MLB dismantling the “buscone” system, and if they are, will they regret it? This is a good piece.
  • There are unconfirmed reports that Tampa Bay Lightning owner Jeffrey Vinik is interested in buying the Rays and building a new ballpark. Evidently this would be part of a larger plan to salvage a failed 230,000 square foot retail development that is the centrepiece of an entertainment district near the Lightning’s arena. I read this in Paul Waldie’s report.
  • I’ve blogged a handful of times here about the challenges that the rapidly growing secondary ticket marketplace have brought to MLB. Put bluntly, too many clubs are seeing too many of their tickets sold at well below face value on the secondary market, cannibalizing primary sales. Most recently I’ve been looking at how clubs are in the initial stages of selling limited inventory via a paperless option. While the introduction of paperless ticketing was no doubt inevitable given our growing reliance on all things digital, I, like many, also believe that clubs are moving to paperless to limit the amount of inventory on the secondary market. Paperless tickets are much more difficult to resell. LWIB, the Red Sox announced that some bleacher tickets to 30 games will be solely available via the paperless option. I’m not sure what to make of this because the Red Sox are not one of the teams seeing their primary sales cannibalized by the secondary market. TicketNews.com reported that the Red Sox “authorized reseller” Ace Ticket wouldn’t comment on the team’s paperless offering. Most interesting to me, particularly given that MLB’s secondary ticketing partnership with industry leader StubHub expires at the end of this upcoming season, was this note: “The digital tickets went on sale February 1, 2012. The plan is part of a digital ticketing initiative that will be implemented across Major League Baseball in 2012.” Hmmm…
  • I noted here last month that the CA Supreme Court upheld the state government’s decision to abolish redevelopment agencies. Redevelopment agencies are frequently used to funnel money into the construction/renovation of sports stadia, including ballparks. LWIB, Angela Woodell reported that the absence of redevelopment money has officially killed any proposal to build a new waterfront ballpark for the A’s in Oakland (aka, the Victory Court site). Oakland will attempt to move forward with a plan for, “…revamping the O.co Coliseum complex with retail, restaurants, hotels and new sports facilities for the Raiders and Warriors. The plan would include a new ballpark for the A's if the team stays in Oakland.” Ballpark Digest thinks that, “All of this puts San Jose one step closer to acquiring a new A's ballpark.” because their plan isn’t dependent on redevelopment money.
  • Ed Sherman reported that the White Sox are expanding their use of dynamic pricing this season. “Virtually every seat at U.S. Cellular Field (excluding those claimed by season ticket holders) will be subject to dynamic pricing.” I’ve lost track of how many clubs are using dynamic pricing but I’m betting that all of them will be within the next few years. Ed doesn’t mention this but I suspect that one of the principal reasons dynamic pricing is being widely adopted is to compete with the secondary ticket market.
  • I’ve mentioned here recently that this upcoming season will see the debut of the Budweiser Patio in the right field bleachers at Wrigley. LWIB I learned that Budweiser and concessionaire Aramark are sharing the projected $500,000 - $1 million cost of constructing the “Budweiser Bowtie Bar” in the right field corner at PNC Park. I learned from Don Muret that Bud sponsors similar spaces at Angel Stadium, Fenway Park (the area atop the Green Monster), Minute Maid Park, Target Field and the soon to open, Marlins Park. Also from Don, “The Bowtie Bar continues the trend across baseball for developing more casual destinations outside of the traditional suite model. “One thing missing from most parks like ours that were built in the late 1990s and early 2000s is a bar-like atmosphere but with a good view of the park,” Coonelly said.” (Frank Coonelly is the club President of the Pirates)
  • I didn’t look at them, but you might. Here are 96 recent pics of the Marlins new digs, including fish tanks.
  • On May 19 San Quentin State Prison will host a baseball game between an All Star squad of inmates and the San Rafael Pacifics of the North American League. Ballpark Digest reports that, “The game is expected to take place approximately between 9 a.m. and noon, with the East Gate to the prison opening at 8:30 a.m.”

You can follow me on Twitter @PeteToms

Pete Toms is senior writer for the Business of Sports Network, most notably, The Biz of Baseball. He looks forward to your comments and can be contacted through The Biz of Baseball.

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