Looking for the holiday gift for the person on your list who’s got it all? How about buying them a piece of the Mets? For just $20 million, you can put 4 percent of the team under the tree. You can probably even get Mets owner Fred Wilpon to wrap it for you. This is what it’s come to for the beleaguered franchise in Queens. While other fans sit back and dream of their team signing Prince Fielder or even Carlos Beltran, Mets fans now hope their team can sign up 10 people interested in owning a little bit of the team.
Actually, Mets fans are more likely wishing the Wilpons would just sell the team outright and put an end to this saga. Even if Fred Wilpon and Saul Katz, the Mets principal owners, sell the $200 million worth of shares they are looking to offload, there’s no guarantee that’s going to fix longer-term problems. In October, Fred Wilpon’s son Jeff said sales were going well but would not elaborate. Since then, silence.
“I think they will make every effort to hold on to the team,” says Howard Megdal, a Mets blogger and author of the recently released e-book “Wilpon’s Folly: The Story of a Man, His Fortune and the New York Mets.”
“But whether they need to sell in the next few months or years, it’s awfully difficult to see a pathway out of that eventuality.”
The reason, according to Megdal, is debt that’s not going away.
“The Wilpons have a situation in terms of medium-term debt that’s totally unsustainable,” Megdal says. “They owe $430 million in principal against their team, due back in 2014. They owe $450 million in principal due back to (TV network) SNY in June of 2015. And then they owe $25 million every six months against Citi Field. They need these minority investors right now in order to be paying short-term bills that are essentially structured as loans.”
The situation is quite different, for example, to what Yankees minority shareholder Marvin Goldklang bought into in 1979, when he purchased a share of the Yankees that Dr. John McMullen had to surrender when he announced his plans to purchase the Houston Astros.
“I did it because I thought it would be fun,” Goldklang says. “It’s turned out to be an attractive investment, but the economics are less important than whether the Yankees win or lose. I don’t even think I asked for the financials when I made the investment.”
Goldklang continues, “In my view, the New York Yankees are a unique, iconic brand, so it’s difficult to compare to almost anything else in sports. With the Mets, I still suspect different things will motivate different people. Some may be interested in the economic aspects of it. Others may be more interested in just being a part of something that’s exciting, to be a part-owner of a major-league baseball team in a major market.”
Can Wilpon, Katz and Co. get 10 to a dozen people to take that leap of faith? “My guess is that they should be able to do it,” says Goldklang. “Because I think there enough people in the New York market who for varying reasons would like to be a part of a franchise like the Mets. We tend to look at things from a microscopic perspective. How you did yesterday, a week ago or the past year. But if you look at the Mets franchise over the course of its history, it’s still a very attractive picture. It’s a solid sports franchise.”
But if you’re looking for a similar scenario, former Texas Rangers owner Tom Hicks tried to sell minority shares when it became obvious he was losing his grip on his franchise. Ultimately, Hicks had to sell the Rangers to a local ownership group in January 2010.
“The New York Times, when they were looking to divest itself of some Boston Red Sox shares that were valued at $40 million in 2009, it took them the better part of two years to get it done,” says Megdal. “In this case, you’re talking about the Mets owners trying to sell $200 million worth of shares in the span of two months. And the Red Sox were in a very different position than the Mets, who are currently losing money and facing legal exposure from the Madoff scandal as well. It’s an awfully difficult challenge.”
Making matters even more embarrassing for the Wilpons, a list of enticements the Mets are offering potential shareholders were reported by the New York Times earlier this week. Among the perks, a chance to meet Mr. Met, the mascot. Business cards emblazoned with the word “Owner.” A parking spot. The chance to take batting practice and throw out a ceremonial first pitch at Citi Field. And discounts on official Mets merchandise. That’s right, discounts.
It all sounded more like a sales pitch for a kids fan club than a 4 percent stake in an MLB team.
“Minority sports ownership is not about perks,” says Goldklang. “It’s about being part of something that’s successful and demands the attention and support of the community. As far as I’m concerned, as far as so-called perks I’ve gotten from the Yankees, there’s nothing that compares with sharing in the ticker-tape parades up Broadway after the world championships. To be even a small part of that. Money can’t buy that.”
Then Goldklang joked: “Of course, we don’t have a mascot like Mr. Met.”