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The Wilpons get a new loan that could lead to a higher Mets payroll . . . eventually

Jan 31, 2014, 7:47 AM EST

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The Wilpons’ financial crunch, brought on by being taken in a Ponzi scheme by their friend Bernie Madoff, almost cost them the team a couple of years ago. It did cause them to take loans with restrictive terms, both from banks and from Major League Baseball. That in turn pushed payroll way below that which a team in a market like New York should be. It’s been something of a depressing slog, frankly.

But now, according to the New York Post, there’s some reason to hope of a financial thaw. It comes in the form of a new $250 million loan which will refinance an existing loan that had a massive principal payment looming early this year. The interest payments will remain about where they were before but (a) no principal payment will be due for seven years; and (b) payroll restrictions built in to the current loan will be gone.

This doesn’t mean that the Mets will suddenly sport $150 million payrolls, but it does give the team breathing room to add players who actually make some money at some point.

Of course, it also means that the Wilpons will not be forced to sell the team due to a cash crunch, paving the way for the Mets’ own version of Magic Johnson to swoop in and make a broke franchise immediately flush. And I know many Mets fans who really, really wish that would have happened.

  1. dan1111 - Jan 31, 2014 at 7:58 AM

    Refinancing a loan to delay paying it off even longer because they couldn’t afford the current terms doesn’t sound like “end[ing] the Mets’ money problems” to me. It sounds like dragging out the money problems even longer.

    And, specific language in the loan terms or not, I would not be optimistic about payroll going up if the team has to wheel and deal just to meet its financing obligations (and lost money last season).

    • eshine76 - Jan 31, 2014 at 1:26 PM

      It sounds like Bobby Bonilla’s agent also does some work with the Wilpons’ bank.

  2. sdelmonte - Jan 31, 2014 at 8:07 AM

    The Wilpons didn’t lose much, if any money, to Madoff. IIRC, they managed to negotiate something that let them off really lightly.

    The problem is their overall debt, especially on the new stadium. While there was public money used for some of Citi Field, the Wilpons paid for much of it, and did so by issuing bonds. The debt service on those bonds is pretty high and will be for a long time. From what I can tell, everything else grows from that. It’s good that I am not in debt from the city building the new park for the Wilpons. But the fact that most other teams are still suckering cities and counties into footing the entire bill for stadiums and the Wilpons didn’t puts them at a disadvantage.

    There is certainly room to question the Wilpons’ overall strategy. I think they thought that a new park along with the new cable channel would be a printing press. And maybe before the Great Recession it would have been, even without great teams. But I still don’t think they are bad owners. I much prefer building from within and careful spending on free agents over any other route. I’ve seen the polar opposite from the Knicks, and it’s a lot more painful, even if it’s another sport.

    • Old Gator - Jan 31, 2014 at 9:01 AM

      I was going to ask what happened to that lenient deal they negotiated with the Madoff trustee, so thanks for clarifying that.

      On the other hand, when you think about it, how much confidence in the Wilpoons does that inspire going forward, when the owners who supposedly made their money in real estate in the first place managed to hamstring themselves with their stadium deal while Scrooge McLoria, a kitsch…er…art dealer, hardly nicked himself and totally buggered his host community with his stadium deal?

  3. randygnyc - Jan 31, 2014 at 9:35 AM

    Being in “high end” NYC real estate for the last 25 years, I can tell you that neither the Wipons nor the Scrooge are capable of formatting these complex RE transactions. These deals are only as good as their least talented advisor(s).

    • Old Gator - Jan 31, 2014 at 9:40 AM

      And if your least talented adviser is Mephistophiles….?

  4. chill1184 - Jan 31, 2014 at 9:53 AM

    Hey too bad that Lord Selig was so focused on his witch hunt with A-Rod and squawking his “best interested of baseball” BS while ignoring the real issues that affect teams.

    Fred Wilpon owning the Mets despite being involved in one of the biggest financial scandals since the Enron collapse

    Jeff Loria essential given a mulligan after destroying the Expos and done really nothing to improve it.

    The Oakland A’s to San Jose/Giants territorial rights dispute, what are we in year five at this point when it comes to this group that Selig put together?

    Baltimore Orioles owner Peter Angelos getting quite the cut in TV revenues of his NL rival the Washington Nationals.

    • jimmymarlinsfan - Feb 1, 2014 at 12:04 AM

      The people of Montreal not showing up to games when they had a good team is what destroyed the Expos. Not Loria. Expecting Gator’s Scrooge comments any second now

  5. cackalackyank - Jan 31, 2014 at 10:07 AM

    Hmmm. Another way to read this, I think, is that 7 years of time has been bought. Then, s**t really gets real when that principle starts being repaid. However, Craig may have a point that instead of finding a buyer during that time, it gives the Wilpons another 7 years to run the team into the ground.

    • xdj511 - Jan 31, 2014 at 10:20 AM

      I agree. From what is here it sounds like all they’re doing is kicking the can down the road. My financial experience is that people taking out loans to repay loans is a red flag and puts creditworthiness into serious question.

      That being said… is there any chance that we can sign Stephen Drew now?

      • dan1111 - Jan 31, 2014 at 10:49 AM

        Word has it they are working on a “rent to own” deal for Drew.

  6. cruuuzcontrol - Jan 31, 2014 at 10:16 AM

    I think we should start referring to these types of arrangements for the Mets as “Bobby Bo-nomics”. Just stupid… Let that interest compound over the next 7 years… Then what happens?? The future is bright with the prospects they have on the way, but they really need to put a serious contender out there soon.

  7. DonRSD - Jan 31, 2014 at 12:47 PM

    Dammit. Was hoping the Wilpoons would sell.
    Meh.

    LETS GO METS!!!

  8. mtr75 - Jan 31, 2014 at 4:03 PM

    This is not reason to hope. This is the end of hope for me and every other Mets fan who wants to see these clowns gone. This is like reverse Christmas. This is worse news than Harvey’s elbow.

  9. bbk1000 - Feb 1, 2014 at 7:20 AM

    The Wilpons suck….plain and simple…..

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