Lots of bad news for New York Mets ownership: the team lost $70 million last season, and this morning a judge ruled they must repay $83 million in profits from the fraudulent Ponzi scheme run by Bernie Madoff.
The judgement today from Manhattan Federal Judge Jed Rakoff is a response to bids for summary judgement from both sides in the case, where trustee Irving Picard is seeking $386 million from the Wilpon family and their partners in Sterling Equities, which owns the Mets, among other holdings. The initial ruling, upholding Picard’s ruling for summary judgement, says Sterling must repay $83 million in profits distributed from Madoff.
The ruling also held that the trial will proceed on March 19 on a larger issue: whether Sterling must pay $300 million in penalties for knowingly being participants in Madoff’s fraudulent activities, though he was skeptical of the trustee winning. In other words, the Wilpons and partners must prove they were ignorant of what Madoff was doing and didn’t question the high rate of return on their investments.
“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 decision comes after a public accounting of the finances of Queens Ballpark Company, which runs Citi Field. Declining attendance at Mets games led to declining revenues to the point where the team lost $70 million after registering a $51 million loss in 2010. From The New York Times:
Ticket revenue from the stadium’s most expensive 10,635 seats fell 21 percent last season to $50.6 million, and concession revenue dropped nearly 20 percent to $10.9 million. And while parking revenue decreased 21.5 percent to $7 million, revenue from luxury boxes rose 32 percent to $7.7 million largely because of hikes built into multiyear contracts.
The report also shows some of the strain caused by attendance declines. The team said it lost $70 million last season, after a $51 million loss in 2010. Before slashing player payroll for the 2012 season, the team borrowed $25 million from Major League Baseball and $40 million from Bank of America last fall. The team also owes hundreds of millions of dollars to banks.
Sterling is in the process of selling $200 million in equity to outside investors.
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