Mets finally escape the hole Madoff dug them
Bernie Madoff is dead and the Mets are alive.
There was a time, not so long ago, when the reverse was true. A short-term memory is all that is required to recall the days when Fred and Jeff Wilpon were licking their financial wounds while the club was stuck on a small-market treadmill.
The Madoff scandal was the indirect cause of many a strikeout and muffed ground ball. After Madoff ’s arrest in December 2008 for purposefully mishandling a monstrous $17.5 billion in investment funds, the Mets finished fourth in the National League East four times in a row, and seven times over the next dozen years. Player contracts and winning streaks grew smaller and smaller, along with batting averages and ticket sales.
These were the bad old days. The Wilpons and Saul Katz were fighting claims from a bankruptcy trustee, Irving Picard, who demanded as much as $1 billion in their alleged profits from Madoff ’s infamous Ponzi scheme. Picard called them enablers, not victims, and said they helped recruit celebrities like Sandy Koufax for Madoff.
Koufax actually fell for it. Madoff had a better curveball.
While the lawsuits dragged on, the Wilpons grew exponentially stingier. The team payroll was the second-highest in baseball in 2008, at $137.8 million. It was down to fifth place in 2010 at $132.7 million; 14th place and $93.4 million in 2012; 23rd place at $73.3 million in 2013. The money, of course, was not the only thing to blame for all the baseball losses. There were bad managers, bad general managers, and even worse players. But it all started at the top, where the Wilpons were hitting bottom.
Eventually, the Wilpons were forced to pay back “only” $162 million to the Madoff victims’ fund. The team’s payrolls recovered somewhat. But the family was never as rich as most other league owners — that was clear from the start.
In many ways, Madoff was responsible for both the Wilpons’ purchase and sale of the team. Madoff and Fred Wilpon were long-time pals, self-made New Yorkers whose families would hang out with each other at vacation homes in Florida.
In a New Yorker article by Jeffrey Toobin (another name,
another scandal), Wilpon talked about getting a senior movie discount with the Madoffs.
“It was the first time I ever got in as a senior citizen,” Wilpon said. “We were going to meet them at the movie theatre in West Palm. And I remember going to the booth to buy the tickets. And Bernie was of senior-citizen age at that time, too, but I didn’t think (Madoff ’s wife) Ruth was. So I bought three senior citizens and one regular, and we laughed about it.”
In 1985, Wilpon and his brother-in-law, Stan Katz, reportedly invested $3 million in Madoff ’s firm. Many larger investments followed. The Wilpons used those early returns to help fund their partnership with Doubleday to purchase the team in 1986, then more profits to help finance full ownership in 2002.
This led to a symbiotic relationship in which Madoff issued high returns on investment to the Wilpons and Katz, who in turn used their high profiles to recommend Madoff ’s services to friends and acquaintances. To be fair, there has never been any indication that the Wilpons or Katz knew that Madoff was swindling any investors with his scheme.
Early on, Fred Wilpon often signed players to contracts with deferred payments so that he would be able to invest more in Madoff ’s company. The greatest example has always been the Bobby Bonilla pact, originally signed in 1991. The Mets eventually agreed to pay Bonilla $1.19 million per year for 25 years, beginning in 2011, with a guaranteed 8% interest rate. Fred figured he would earn more than that
rate with Madoff.
The public bitterness toward the Wilpons in New York grew exponentially over the years, even after they helped to design and deliver Citi Field. The animosity rivaled the perennial loathing aimed at Knicks owner James Dolan at Madison Square Garden. If the Mets had won a championship somewhere along the way, that might have changed everything. But a title never arrived, and there was a real sense in New York that the team could not win big unless a savior arrived with real money.
That happened last September when multi-billion-dollar, hedgefund king Steve Cohen purchased the Mets. Cohen has been treated by fans and a large segment of the media as a godsend, though he’s been sued by an ex-wife for racketeering, investigated by the Securities and Exchange Commission for insider trading, and denounced by small investors for his role in the GameStop short squeeze on Wall Street.
What many Met fans care much more about is that Cohen signed Francisco Lindor to a $341 million contract that the shortstop never would have sniffed with the Wilpons in charge. After all, George Steinbrenner, the late owner of that other New York club, was hardly a saint during his tenure. Steinbrenner somehow managed to get suspended twice from baseball, and it had nothing to do with steroids.
Now Madoff, the swindler, is dead. The Wilpons are irrelevant. A zillionaire is in charge of the Mets.
This better not be another pyramid scheme.