The settlement between Irvin Picard, the trustee for the Bernie Madoff victims, and the Wilpon/Katz group doesn’t eliminate the financial issues that hover over the New York Mets. As Howard Megdal points out at Capital New York, there is still $430 million of outstanding debt against the team due in 2014, $450 million debt against SNY due in 2015, and roughly $600 million still due the City of New York on Citi Field, along with shorter-term debt such as the $40 million bridge loan taken out last November, and the $25 million the team still owe Major League Baseball. None of the long-term debt was eliminated with the $162 million dollar settlement, but the Wilpon ownership group was given some time to get their house in order. That, however, doesn’t eliminate the financial storm clouds that still are ahead, nor give the Mets the necessary capital to improve the current club that is severely lacking in depth and pitching. That’s why the celebratory tone by members of the media and the fans is premature.
Since Bernie Madoff was arrested in December of 2008, there has been speculation about how much it’s impacted the team. Originally, it didn’t appear to at all since they invested in big-money free agents such as Francisco Rodriguez and Jason Bay. Over time, it was apparent the team was hurt as poor performance on the field led to decreased attendance, which put an already cash-strapped ownership group in a bind. The Mets were no longer a big market team that could withstand losing money. The team needed to stop bleeding money, which Sandy Alderson claimed was in the $70-million dollar range last year. That led to this past offseason payroll purge, which is the biggest in baseball history.
It was clear the more money the Wilpons owed to Picard and spent on lawyers, the less likely they would be willing to invest in the ball club. Just recently there were reports the team couldn’t trade for Nationals starter John Lannon since his $5 million dollar salary was too much. The Mets payroll projections have also decreased by about $30 million over the last twelve months.
The prevailing opinion is this decision frees up cash to reinvest in the team. Does this mean they will be players at the big free agent table this offseason? I doubt it. Does it finally allows them to spend the additionally $10-$15 million in veteran pieces that could provide them with the necessary depth to compete with their current roster? Again, my guess is probably not.
Remember, even with a $50 million dollar payroll drop this year, the Mets would have to draw the same amount of patrons to Citi Field to have a chance at breaking even. Do you think, even in best case scenario, they will sniff the same 2.3 million fans they drew a year ago? Can they draw 1.7? Some have suggested they need about 3.2 million coming through the gates to handle all the team debts. That figure may not be realized for quite some time.
The judgment also doesn’t erase two onerous contracts (Bay, Santana) that total $40 million dollars through the end of next year. It’s very like that Bay’s 2014 option will vest, putting another $17 million on the books for 2014. The news today doesn’t give them additional revenue to reward David Wright with a contract extension, or even the funds to pick up his $16 million dollar option for 2013. As a matter of fact, Wright’s abdominal injury gives Wilpon the biggest out of all- an excuse not to re-sign one of the best positional players in franchise history, even if he returns to form. Don’t think they will do that? Come talk to me at the end of the season.
The Mets will spin this as a win, but in reality it just stops a very long losing streak. Think of the Wilpons as a team that has been on a 15-game losing streak. They come up with a win against a superior first division club to snap the streak. It feels good, for a day, but when they wake up tomorrow they still aren’t contenders. They are a second division ownership group that can’t leverage a New York zip code in order to play in the same financial arena as Boston, Philadelphia, Los Angeles or Chicago. Right now, they can’t play in the same financial world as St. Louis, Milwaukee or Atlanta.
Any positive news will be considered a triumph by these owners. None of us know their personal finances, but the public facts don’t paint a rosy picture. I don’t think many Mets fans have celebrated after breaking a long losing streak during one of the team’s lost season. They shouldn’t celebrate or spend too much time feeling good about today, either. This ownership group doesn’t deserve that benefit of the doubt.