Mets sale to Cohen excuses decade of Wilpon errors
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Wilpon insisted that the money lost to Madoff’s Ponzi scheme wouldn’t have any effect on the Mets. But that wasn’t remotely true. The Mets had enormous debts: They had to pay the city of New York millions of dollars in interest on the bonds that had been sold to build their new ballpark, Citi Field. The team itself regularly lost $50 million to $75 million a year, according to someone who has seen its books. Wilpon owned the SportsNet New York (SNY) regional sports network, which was profitable but also carried a hefty debt load.
To stay afloat, the Mets took an emergency $25 million loan from Major League Baseball in 2010. The following year, the team borrowed $40 million from Bank of America. To repay those loans, and to generate some cash, Wilpon sold 4% stakes to 12 limited partners in 2012 for $20 million each. Even so, the team and the TV network still carried a combined debt load of some $500 million, according to The Wall Street Journal.
Did the team’s troubled finances affect its performance on the field? Of course. In 2008, the year the Madoff fraud was exposed, the Mets had the second-highest payroll in baseball. By 2013, the Mets’ payroll ranked 23rd and was less than a third of their crosstown rivals, the Yankees. (By 2020, the Mets payroll had climbed back to fifth place.) Time and again, the team failed to bid for prominent — and expensive — free agents.
In recent years, the Mets had one terrific season, 2015, when they lost in the World Series. But overall, the team has had a miserable decade. Since 2009, the Mets have had only three winning seasons and two postseason appearances. In the pandemic-shortened
2020 season, the Mets came in last place in their division.
Today, the Mets’s finances are as precarious as they have ever been. The team is likely to lose $200 million — yes, $200 million — on the 2020 season. It has dipped heavily into a $250 million revolving loan from JPMorgan Chase. And the team owes $45 million in Citi Field bond payments.
You would think that when a seller of an asset is in such dire straits, potential buyers would try to pick it up on the cheap. But that’s not happening. Cohen’s winning bid is reported to be an astonishing $2.45 billion — which, if Major League Baseball approves the sale, would be the largest amount ever paid for a sports franchise in the U.S. And that doesn’t include SNY, which Wilpon has kept out of the sale.
So let’s recap: A man who should have known better stupidly uses a Ponzi schemer as his banker. When the Ponzi schemer gets caught, the man’s businesses, including his baseball team, lose gobs of money. In most subsequent seasons, he mostly fails to field a competitive team. The team loses money year after year. Debt piles up. Yet this team that was worth $400 million when he took control 18 years earlier is going to be sold for $2.45 billion.
Is there any other business on earth where an owner can be as incompetent as Wilpon and come away richer than ever? As a plaything for the 1%, nothing compares to a sports franchise — and when a franchise becomes available, price becomes no object.
There is no guarantee that baseball’s owners will vote to let Cohen in the club. But my guess is that they will. Cohen has something that Wilpon hasn’t had since 2008: lots and lots of money.