Prospectus Hit and Run... (02/04)
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February 6, 2011 One-HoppersMeet the MessEver since word first broke two years ago that the Mets' owners, Fred and Jeff Wilpon, had been heavily invested in Bernie Madoff's Ponzi scheme, I've been getting occasional questions along the lines of "What will this mean for the Mets' payroll?" And my reflexive answer has been: "Not much." Just because the Wilpons' personal bank account was taking a beating, my reasoning went, that shouldn't change whether it made financial sense to sign a top-tier free agent to try to boost wins and thus ticket sales—any more than it mattered to the Yankees when George Steinbrenner's ship-building business went kablooey. And, indeed, the Madoff scandal didn't stop the Mets from throwing lots of money at Jason Bay in the hopes that he'd get Met fans dreaming of a World Series. (That Bay ended up reminding them of a different 1980s flashback is another story.) All that changed, however, with the news that the trustee trying to recoup Madoff's stolen money is seeking to have the Wilpons return up to $1 billion of allegedly ill-gotten gains. This is effectively a cash call, and—not unlike the McCourt divorce battle unwinding in Los Angeles that has helped hamstring the Dodgers' spending—is likely to be a very big deal indeed. It's the difference between finding out that your 401(k) is worth half as much as you thought and abruptly finding you've maxed out your credit card: Neither is much fun, but only one is going to make you go on an all-ramen diet. Ultimately, though, Madoffgate could be less harmful to the Mets franchise than L'Affaire McCourt has been to the Dodgers, if only because the money at stake is so stupifyingly huge—one billion dollars, people—that it seems likely that the Wilpons will have to very quickly move to sell all or part of the team. The Wall Street Journal's Matt Futterman says if they lose the Madoff suit, the Mets might not even make it through the year with the cash they currently have on hand, meaning that any ownership turnover would have to happen fast—too fast, presumably, for the Wilpons to bother with any interim fire sale of the kind some fans are hand-wringing about. (And that's even if you think the Mets have that many assets they could strip; given their outsized contracts, Carlos Beltran and Oliver Perez are less candidates for a quick cash-in sale than for being freecycled.) The question Mets fans should be asking, then, isn't what this will mean for payroll, but who'll be the next captains of the Flushing ship? I have zero inside scoop here, and on the whole feel like it's not worth worrying about which particular rich guy is the one bankrolling your team, with one exception: Cablevision, which has already tried to buy both the Mets (and the Yankees—the Dolans aren't choosy), and would no doubt love a second shot at them. For New Yorkers familiar with Cablevision's stewardship of the Knicks and Rangers, the prospect of them landing the Mets as well brings up all kinds of nightmare scenarios, up to and including using control of the Mets' SNY cable channel to try to extort fans into signing up for their cable service—remember, this is the company that decided to hold an entire newspaper hostage for similar reasons. Or they could just decide to make Isiah Thomas their third-base coach. Either way, it wouldn't be pretty. A Cablevision takeover of the Mets is probably unlikely: Consider that Bud Selig already arm-twisted the Red Sox to take a lower sale price in order to keep James Dolan from ending up in the MLB owners' club. And there are sure to be plenty of other rich guys around who'd love to land one of the three most valuable teams in baseball. Depending on how successful the Madoff trustee is with his lawsuit, and how soon the Wilpons run out of cash, Selig might need to scramble a bit to ensure the whole mess doesn't end up in bankruptcy court, where his superpowers to decide winning bids would have less sway. But given past precedent, it's always a safe bet that Bud will find a way to keep the wrong lizard from getting in.
Neil deMause is an author of Baseball Prospectus.
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A couple of points:
1. I don't see the resolution to this as likely to come particularly quickly. I expect the Wilpons to fight tooth and nail in the courts, which could take years to resolve.
2. I'm not sure I see this a less harmful to the Mets' franchise than the McCourt divorce has been to the Dodgers. With the McCourts, you've got two rich, spoiled assholes taking money out of the team and fighting each other in public, but basically, the peripheral damage to others is relatively small, and there's no criminal wrongdoing at the center off the case.
The Madoff situation, on the other hand, has wrecked lives, and the suit against the Wilpons alleges that they consciously disregarded signs of fraud and that they profited from tainted money. That's a whole lot worse, and probably harder to overcome on the PR front.
I guess I'm making a distinction here between damage to the Mets franchise and damage to the Mets ownership. The Wilpons' name is going to be mud, no doubt, but if a sale happens relatively quickly after the lawsuit is resolved (whenever that is), then the new owners could very quickly absolve themselves of the Madoff stench and be anointed saviors of the Mets by the New York media.
I don't see a scenario, in other words, where the Mets have to trade David Wright or something in order to make payroll. There's no crisis until the lawsuit is resolved, and once that happens, they have to sell in relatively short order. So there's less risk of a drawn-out McCourt-style doldrums, anyway.
"Quick sale" isn't a term that exists in the MLB vocabulary, and because all of this is going to drag on for awhile, it's going to damage the Mets' brand, affecting both the Wilpons and the general perception of the team inside the game and out for the next year or so. I don't see the Mets selling off Wright, but I'd guess Reyes is gone by the end of the year (which may be warranted).
Furthermore, I have to laugh at the suggestion (not yours) that the team would be in a position to sign Pujols if/when he comes up for free agency, or that he'd choose to join this circus, since the chances of a new, controlling ownership being in place by, say, November would seem to be pretty slim. Which is what I mean about the damage to the brand - the ability to attract marquee free agents is part of that.