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The Business of Hockey Discuss the financial and business aspects of the NHL. Topics may include the CBA, work stoppages, broadcast contracts, franchise sales, and NHL revenues.

OT: MLB had to secretly loan $25M to NY Mets

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Old
02-25-2011, 05:42 PM
  #1
kdb209
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OT: MLB had to secretly loan $25M to NY Mets

A League secretly helping keep a franchise afloat - hmmm - move the Mets to Hamilton.

Although this situation could impact the (unlikely) scenario of the Mets/Wilpon building an arena near Citi Field and/or buying the Isles.

http://www.nytimes.com/2011/02/26/sp...ll/26mets.html

Quote:
Baseball Gives $25 Million Lifeline to Mets
By MICHAEL S. SCHMIDT and DAVID WALDSTEIN
Published: February 25, 2011

Major League Baseball provided $25 million to the owners of the Mets as they struggled to deal with a cash shortfall last fall and a looming lawsuit seeking hundreds of millions of dollars for victims of Bernard L. Madoff’s vast Ponzi scheme.

The direct intervention of Commissioner Bud Selig to help sustain the operations of the franchise is perhaps the most striking evidence yet of the financial distress that for many months has plagued the team’s owners, Fred Wilpon and Saul Katz.

The trustee for victims of Madoff’s fraud has accused Wilpon and Katz of having turned a blind eye to warnings about the suspect nature of Madoff’s multibillion-dollar investment operation while using the profits they reaped from their own investments with him to enrich themselves and fuel their business empire. The trustee, Irving H. Picard, is seeking roughly $1 billion from the team’s owners and their various business partners.

The Mets have exhausted baseball’s standard bank line of credit — at least $75 million Selig and the sport’s owners make available to teams for a variety of reasons in the course of any year. They also have more than $400 million in debt on the team. Thus, the additional money provided by Selig — done in secret last November — may well have been crucial in keeping the club functioning. Three weeks ago, after months spent denying that they were in any significant financial trouble, Wilpon and Katz announced that they were willing to sell 25 percent of the club, a franchise valued by Forbes magazine at $858 million. In recent days, the men indicated they were willing to sell even a larger share of the team, but they have insisted they do not want to give up majority ownership. Selig’s decision to give what amounts to extraordinary assistance to one of the sport’s most prominent and highly valued teams — one owned by Wilpon, a man Selig has long regarded as a close personal friend — could anger other team owners, who might well wonder why their money is being used to rescue a team with a $140 million payroll.


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02-25-2011, 05:47 PM
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Tinalera
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I'll be interested to see what (if any) the fallout is of this-and certainly the implications about possibly buying the isles.

Just wonder, are scenarios like this (Leagues loaning large amounts of money to teams) exceptions, or do they perhaps occur more often than we might realize (ergo, how many other "Mets" situations are there? Wasn't there something similar that went on with one of the Florida teams as well (Marlins?)

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02-25-2011, 05:56 PM
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Acesolid
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I dont see this helping the Islanders at all.

And this also shows that the NHL isn't the only league with some teams who are having trouble druing the current financial crisis in the States.

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02-25-2011, 05:58 PM
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Steve55
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Quote:
Originally Posted by kdb209 View Post
A League secretly helping keep a franchise afloat - hmmm - move the Mets to Hamilton.

Although this situation could impact the (unlikely) scenario of the Mets/Wilpon building an arena near Citi Field and/or buying the Isles.

http://www.nytimes.com/2011/02/26/sp...ll/26mets.html
Vast majority of the Mets specific debt is due to the Citi Field.

http://erinarvedlund.wordpress.com/2...ure-estimates/
The Mets

Owes: $430M in debt

Pays: $30M a year in interest

Citi Field

Owes: $700M for construction

Pays: $50M a year to city

SportsNet NY (broadcast arm)

Owes: $450M in loans

Pays: $20M in interest

Profits: $100M a year; Wilpon gets $65M

Total debt = $1.58 Billion (assuming Wilpon’s exposure in lawsuits ranges from $300M to $1B)

But also the Mets are controlled by Sterling Equities, a large real estate firm within NYC who have shown interest to develop Willets Point.

http://www.willetspoint.org/2010/05/...-point-in.html

Thursday, May 13, 2010
Last year, 29 potential developers formally filed paperwork with the New York City Economic Development Corp. to redevelop Willets Point. While Wang was not one of them, Sterling Equities, the Wilpon family's umbrella company, was, the EDC confirmed Tuesday...
New York City officials have said they are not contemplating the idea of the Islanders, or Wang's $3.8-billion Lighthouse project, heading to Queens, because an arena isn't part of the approved plans for Willets Point.


About the Mets parent company Sterling Equities:

http://www.sterlingequities.com/comp...ican_property/

Sterling American Property, Inc. represents the real estate investment funds formed and operated by affiliates of Sterling Equities and American Securities LP. Since 1991, Sterling has successfully established and operated five investment funds. To date, these Funds have acquired over $4.6 billion of real estate and real estate related assets.

My opinion is that the Sterling Equities are trying to focus more on the Willets Point project which would be at least 3 billion dollars where an arena next to Citi Field beside WP have been discussed as an arena is not part of the WP approved plans.


Last edited by Steve55: 02-25-2011 at 06:05 PM.
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02-25-2011, 06:03 PM
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Tinalera
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Is it me, or is that really an eerie possibility of the Yotes possible finances if they manage to put through that financial house of cards to keep the team? Just seems too close for comfort.

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02-25-2011, 06:08 PM
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Originally Posted by Tinalera View Post
Is it me, or is that really an eerie possibility of the Yotes possible finances if they manage to put through that financial house of cards to keep the team? Just seems too close for comfort.
The Wilpons may want to sell a 50% stake in Citi Field, the Mets and SNY (all debt free assets that can lead to over 500 million dollars in cash) to get rid of some financial burden and invest some of that money into the WP project.

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02-25-2011, 06:14 PM
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That's huge news. Mets are a flagship franchise - this ain't no "lost in the wilderness" franchise.

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02-25-2011, 06:15 PM
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That's huge news. Mets are a flagship franchise - this ain't no "lost in the wilderness" franchise.
"Flagship" ... I don't know ... they have always been the red-headed stepchild of the Yankees.

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02-25-2011, 06:25 PM
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Originally Posted by MountainHawk View Post
"Flagship" ... I don't know ... they have always been the red-headed stepchild of the Yankees.
Oh, for sure, the Yankees are in a class by themselves.

But I would certainly put the Mets in that second tier of half-dozen or so highly prominent teams. No, I'm not going to name them, that would just start another food fight.

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02-25-2011, 08:41 PM
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kdb209
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Originally Posted by MountainHawk View Post
"Flagship" ... I don't know ... they have always been the red-headed stepchild of the Yankees.
Not always - the Mets outdrew the Yankees from 1964 thru 1976 and from1984 until 1992.

I grew up in New York in the 70s & 80s. The Mets were as or more popular than the Yankees - although there was a significant geographical split in the fanbases.

It wasn't until the Yankees started to win again in the mid-90s that they became the definitive #1 team. Large crowds and sellouts at Yankee Stadium didn't become common until about 10 years ago.

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02-25-2011, 10:15 PM
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Quote:
Originally Posted by Acesolid View Post
And this also shows that the NHL isn't the only league with some teams who are having trouble druing the current financial crisis in the States.
Yeah, but this is totally different, the Mets got caught in a scam. They are the third most valuable team in MLB behind the Yankees and Red Sox’s, obviously if they had some financial trouble MLB would bail them out and would be right in doing so. If the Montreal Canadiens, New York Rangers or Detroit Red Wings had some financial issues I would hope the NHL would provide assistance to those teams because they would get their money back eventually, unlike some other markets that shall not be named .

This is like comparing apples and oranges.

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02-25-2011, 11:18 PM
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Crazy_Ike
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What is with characterizing this as "secretly" doing so? The leagues all maintain a cash pool for its teams in case of emergencies or necessities. They aren't obligated to inform the public of its use.

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02-26-2011, 11:36 AM
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Giuseppe Franco
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Quote:
Originally Posted by kdb209 View Post
Not always - the Mets outdrew the Yankees from 1964 thru 1976 and from1984 until 1992.

I grew up in New York in the 70s & 80s. The Mets were as or more popular than the Yankees - although there was a significant geographical split in the fanbases.

It wasn't until the Yankees started to win again in the mid-90s that they became the definitive #1 team. Large crowds and sellouts at Yankee Stadium didn't become common until about 10 years ago.
This. Also, the Mets were ranked by Forbes as being the second most valuable franchise in 2009. Not sure how this mess affects their value though.

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02-27-2011, 03:08 AM
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vivianmb
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Quote:
Originally Posted by kdb209 View Post
Not always - the Mets outdrew the Yankees from 1964 thru 1976 and from1984 until 1992.

I grew up in New York in the 70s & 80s. The Mets were as or more popular than the Yankees - although there was a significant geographical split in the fanbases.

It wasn't until the Yankees started to win again in the mid-90s that they became the definitive #1 team. Large crowds and sellouts at Yankee Stadium didn't become common until about 10 years ago.
i'll agree with that.the mets traded "the franchise"tom seaver, and then the yanks won the world series twice (77/78) and then the mets won it.(86) ...real see-saw battlew till the mid 90's....since then the yanks have owned the NYC area. shame.

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