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Home Maury Brown Mets Ordered to Pay $83 Million. Can Revenues Meet Expenses?

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Mets Ordered to Pay $83 Million. Can Revenues Meet Expenses? PDF Print E-mail
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Written by Maury Brown   
Monday, 05 March 2012 12:50

MetsA federal judge on Monday ruled that the owners of the New York Mets must pay an $83 million judgment and go to trial as part of the legal process involved in the Bernie Madoff Ponzi scheme scandal. Federal Judge Jed Rakoff ordered Sterling Equities to pay the amount. The Mets had sought to get the case thrown out. While Rakoff did send the case to trial, comments in his ruling lend one to believe that the additional $300 million in principle that Irving Picard, the trustee for the Madoff victims is seeking by saying that Sterling willfully ignored information regarding the Ponzi scheme, were suspect. As reported by Newsday:

"Conclusions are no substitute for facts, and too much of what the parties characterized as bombshells proved to be nothing but bombast," Rakoff wrote. "Nevertheless, there remains a residue of disputed factual assertions from which a jury could infer either good or bad faith, depending on which assertions were credited."

The ruling comes at a time when the Mets are under continued financial burden due to the Madoff case and declines in attendance. According to a separate report by Newsday, revenue for the Mets has declined 30 percent since 2009 when Citi Field opened. Those revenues are needed to make the annual $43 million construction bond payment on Citi Field. The information obtained by Newsday showed the annual $20 million stadium naming rights deal with Citigroup, along with $26 million in other signage and sponsorship revenues. Player payroll is projected to be down to approx. $90 million on Opening Day. The Mets ranked 7th in total player payroll by Opening Day last year at $118,847,309. According to the report, Premium seating revenues have been earmarked to cover the bond payment.

"This is the defined revenue stream pledged to back up the bonds," said David Howard, the Mets’ executive vice president for business operations.

The financial records filed also show:

  • Concession revenue alone dropped 28 percent since 2009 to $10.9 million in 2011, and parking alone fell 37 percent to $7 million in 2011.
  • Ticket sales for 10,635 premium stadium seats, about 25 percent of the 42,000-seat stadium, declined from $99.3 million in 2009 to $50.6 million through the end of the 2011 season.
  • The Mets pay $1 million annually to lease the stadium.
  • Expenses for Citi Field have stayed between $85 million and $88 million since the ballpark was built.
  • The Mets are projecting an increase in premium-ticket sales revenue, from $50.6 million last year to $56.5 million in 2012. Concession sales are expected to increase, from $10.9 million at the end of September last year to $14.3 million this year, according to the Mets' projected 2012 budget. Meanwhile, as luxury suites come up for renewal, revenue there is budgeted to drop to $6.7 million from $7.7 million in 2011.

Howard attributed the drop in premium ticket revenue to cutting prices by as much as 40 percent since 2009, which he said was in response to the economic downturn and on-field performance.

In the midst of this sits the additional $83 million that the owners of the Mets must now pay. The trial to determine if the additional $300 million must be paid by the Mets to the Madoff victims is set scheduled for March 19.


Maury BrownMaury 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. He writes for Baseball Prospectus 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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