This article in the New York Post has uncovered that Fred and Jeff Wilpon are in a much greater financial bind than they said last week.As a Mets fan for nearly 40 years, I have learned to never take the Wilpons at their word. If its true that the Mets are 700 million dollars in debt, then the Wilpons may indeed be trying to sell the Mets outright at the highest possible price.
May only wish is that the next owner has extremely deep pockets and would refuse to play second fiddle to the Yankees.
That would be a Mets fans dream.
The New York Post reports that the New York Mets owners are in a much tighter squeeze than they are letting on, The Post has learned, and they may be forced to sell a controlling stake in the team.
Fred Wilpon and his ownership team have been shopping a minority stake in the Amazin's to Wall Street titans and other deep-pocketed investors for at least three months, said a source who was approached.
Potential investors stand to get little or no say over the team, despite the high debt load and hefty asking price. "Why would I put up a couple hundred million and get no rights?" said one prospective buyer who passed on the offer.
Wilpon said Friday in a conference call announcing that the owners were seeking to sell a 20 to 25 percent stake that "it is prudent for us to explore our options at this point," implying that the process had just begun. In reality, the process has been going on for months, sources told The Post.
The team, owned by Sterling Equities, which is controlled by Wilpon and his son, Jeff, is worth between $750 million and $1 billion, once source said.
Forbes last year pegged the value at $858 million.
But the team has roughly $700 million of debt, and that should be subtracted from the valuation when calculating what an owner's stake is worth, sources said. Using the $858 million valuation and the $700 million in debt, a 25 percent stake in the free equity amounts to just $39.5 million -- not the $200 million asking price.
While Sterling's 60 percent stake in its cable network, SportsNet New York, could be worth hundreds of millions, it cannot be used to attract minority investors to the team, sources said.
Sterling would have to distribute any proceeds from the sale of its SNY stake to lenders under the terms of their credit agreement, according to three sources close to the situation.
Also, it cannot borrow any more against the team or SNY under the loan agreements, said a source with direct knowledge of the team's finances. The Wilpon family already raised more than $200 million this summer by borrowing against the Mets and SNY, sources said.
The Wilpons have been trying to replace roughly $750 million they lost by investing with convicted Ponzi schemer Bernie Madoff, a source said. In addition, they are now in settlement talks with Irving Picard, the trustee for the Madoff estate, who claims Sterling is a "net winner" that withdrew $48 million more from two Madoff funds than it invested.
Looking to raise several hundred million but hemmed in by debt, the Wilpons may be forced to sell a larger stake than they wish.
"If they can't find a buyer, they will need to sell a majority stake six months from now," said a source.
The Mets declined comment.
