BOB:  More Mets sale news

More Mets in the news

The New York Mets and their owner, Fred Wilpon are once again in the news. Last week it was because it was leaked that the Mets received $25 million in loans last fall to deal with a cash shortfall. This goes to show you that there was some kind of lead up to the news that broke last month that the Mets’ owners were going to be held accountable for some of the losses incurred in the Bernie Madoff scandal.

In this weeks’ news, we delve a little deeper into how the trustee overseeing the lawsuit against Wilpon and company came to determine that the Mets’ owners should be held responsible even when they too saw their accounts go to zero. At issue is the fact that the Mets’ owners pulled out more than their initial investment prior to the news breaking that Madoff was one of the biggest scammers ever. On Thursday, the Mets’ owners will get to attack the methodology that the trustee in the case is using to try to get $1 billion from the Mets’ owners Their opponents will be the trustee, Irving H. Picard, and none other than the Securities and Exchange Commission. Stay tuned because this could be a big week in determining what could happen with the Mets.

MLB blocks Fox/Dodgers television proposal

With the divorce in the not too distant past, the supposedly cash strapped Los Angeles Dodgers owner, Frank McCourt, needs to find a way to keep the team afloat. The latest idea stemmed around a $200 million loan from Fox to the Dodgers with the collateral being the team’s television rights. If the team can’t pay Fox on time, then the deal would have extended Fox‘s current television contract by as many as four years.

While someone should earn some points for creativity, the league didn’t like the precedent it was setting and Commissioner Bud Selig himself rejected the idea. Now McCourt is exploring other options to keep the team afloat.

Contraction is back??!!

I side more with Neil DeMausse on the issue of contraction. Odds are, it’s not going to happen but that doesn’t mean it’s not fun to talk about. That’s why a lot was made of a story by Ken Rosenthal who discussed contracting the Oakland Athletics and the Tampa Bay Rays. It’s funny how he talks about how contraction will probably never happens, but then goes on to discuss it in length.

The best quote from Rosenthal’s piece is where he indicated that any talk of contraction would result in an all-out war with between the union and the owners. Right now, baseball is on some pretty solid footing, especially with lockouts looming in the NBA and NFL. The economy is still a little shaky, so I don’t think anyone wants to mess anything up now. My guess is, the biggest news out of the collective bargaining agreement negotiations won’t be that we’re going to have 28 teams, but that they might go with just a four-year, or even three-year, deal rather than ground breaking five-year deal that was peacefully negotiated the last time around.

Fenway Park to stand for another 50 years

Next year, Fenway Park will do something no other major league ballpark has done and that is to celebrate 100 years of hosting a major league team. In the last 10 years, the team has spent $285 million on Fenway Park and Team president Larry Lucchino is now on record as saying that because of that money, the ballpark should stand for another 40-50 years. Also in the piece, there’s some talk about bringing soccer to Fenway Park. The Liverpool team is also owned by the Red Sox ownership group and the hope is to bring the team over for a game in 2012.

Minor League teams adjust to their stars

Way back in 2007, I interviewed Pat Day, the general manager of the Lansing Lugnuts. In our chat, he mentioned that very rarely are they able to promote a single player because the big unknown is you never know how long they’ll be with the team. It’s hard to plan bobble head night for player X a month in advance when there’s a chance he won’t even be with the team by then.

That’s why the Hagerstown Suns have quite the boon because that’s where Bryce Harper, the top pick in the 2010 draft, is slated to start the season. In Ben Hill’s latest Minoring in Business, he talks about how Hagerstown is going to take advantage of having a big name player on their roster and while he’s with the team, it’s going to be called Harpertown. Promotions include food items based on what Harper does on the field and the team has already seen an increase in season ticket sales. Hill goes on to talk about how they have a field guide for this kind of thing because pitching phenom Stephen Strasburg made a couple of stops in the Washington National minor league system, and those teams were able to take advantage of the situation.

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  1. Brad Johnson said...

    That $25 million will be extracted out of the Mets franchise eventually even if it has to be like Bobby Bonilla’s contract.

    As Brian noted, what Selig is most afraid of is the precedent of allowing such a deal. While the deal might make sense from every angle when the Dodgers are doing it, it could ultimately hurt other teams who emulate the plan. Other explanations? Selig would like to see a new ownership in LA. Selig doesn’t want to give delinquent owners (think Hicks) more ways to cling to and starve a franchise. Etcetera.

  2. bob skinner said...

    Irrespective of precedent, Attachment #22 to the current CBA concerning Debt Service would probably disallow the Dodgers taking on $200 mil of additional debt, as they are already heavily leveraged from the buyout of FOX by the McCourts!
    There is a difference between borrowing $25 to cover seasonal working capital needs versus possibly violating the CBA by taking on $200 mil of long-term debt.  One’s personal feelings toward Bud Selig do not need to cloud the thought process!

  3. Coladar said...

    So MLB has no problem loaning the Mets $25 mil, an amount clearly not enough as they seem desperate for far more to pay salaries and keep the team afloat the last few days. Oh, and then there’s the $25 mil Huey have to pay back. Because we all know that’ll happen,

    Then you have the Dodgers, a team not facing a billion dollar lawsuit, not already owing their team and stadium to debtors including MLB. They want a loan from their ownership group, Fox. They realize they may not be able to pay it back, so obviously Selig is just looking out for the team so they aren’t placed millions in the hole.

    Oh wait, what? The loan is set up so that if they can’t pay it back, Fox gets an extra four years of broadcasting rights? No harm, no foul? Perfect situation, no risk of owing a ton of money they cant pay back plus interest, for when try need the money to keep going this season. With the insanely inventive broadcasting backup payment plan.

    And Selig says no?!? While allowing the Mets $25 mil they’ll never pay back? Can someone explain that to me, or is it just Selig playing favorites in a delusional world where he doesn’t see the Mets are on the brink of filing for bankruptcy? Selig

  4. Lorenzo said...

    There are two problems with allowing Fox to extend their television contract for four years at $50 million per year in lieu of McCourt paying the $200 million loan. 1. the Dodgers get no TV revenue for those 4 years, and 2. the TV package is worth much more than the $50 million per year Fox is paying now.

    When McCourt bought the Dodgers, he put up his Boston real estate holdings as collateral. He never paid Fox, so they foreclosed, and made a tidy profit selling the real estate. McCourt has a record of borrowing and not repaying the loans, giving up value in the process. MLB should not let him use Dodger assets to enable his business practices.

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