The New York Mets required a cash infusion of $25 million from MLB lines of credit last November after the team faced a cash-flow crisis and had tapped out its other sources of capital, leaving many to wonder how long Fred Wilpon and Saul Katz can keep control of the ailing franchise.
That the Mets were in need of funds from MLB (essentially, a lender of last resort, meaning the team had tapped out its other credit sources) in a move that wasn’t disclosed to the MLB Executive Committee until last month is bad news for Mets ownership: the team is already heavily in debt (some $400 million) and it may take more than new owners buying equity in the team to turn things around. The Mets were nonplayers in the free-agency bazaar this past offseason, and are hamstrung with a $140 million payroll.
An effort to sell a minority chunk of the team, valued at $858 million by Forbes Magazine, isn’t drawing much interest, either; only 12 or so individuals or groups have applied to MLB to review the Mets’ books, the first step on the way to a sale. The team and Sterling Equities are operating under a cloud these days: The Wilpons and the Mets were all investors in funds managed by Bernie Madoff, but the funds weren’t legit — they were part of a huge Ponzi scheme that ended up causing thousands of clients to lose their investments, but apparently the Wilpons actually profited from their investments. So-called “clawbacks” are filed by a bankruptcy trustee against those who actually received more proceeds from the Ponzi scheme than they invested, on the theory that they were sharing in the proceeds of the fraud. A bankruptcy trustee has indicated he may seek up to a billion dollars from Sterling Equities.
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