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Now We Have A Diagnosis

By Howard Megdal ~ January 29th, 2011. Filed under: Howard Megdal, New York Mets.

Ever since we first learned the details of the Bernard Madoff Ponzi scheme- and that the Wilpons were heavily invested- the question of whether the team’s finances would be compromised hung over the team and everything it did. If a free agent didn’t sign, if a draft choice wasn’t made over slot, it became more than just a baseball question. Every move or non-move was a referendum on the financial well-being of the New York Mets.

The truth was, and is, that we simply don’t know the financial condition of the Wilpons or the Mets. But we do know something now that we didn’t prior to Friday’s announcement that the Wilpons will seek a minority stakeholder in the team: the Wilpons need money. Obviously, running this team without an infusion of cash will be either difficult or impossible- we don’t know which yet.

Either way, coming to terms with this reality publicly can serve as the correlation to the public acknowledgment that the baseball side of the organization badly needed fixing- a fact the Mets made clear with the hiring of Sandy Alderson. Unfortunately, while putting Alderson in place allowed the Mets to move beyond the mistakes of the past, fixing the Madoff mistake may not be so easy.

The New York Times is reporting that Irving Picard, the trustee in charge of recovering funds for Madoff victims, may seek up to $1 billion from the Wilpons. If he settles for anything close to that number, even a minority stakeholder wouldn’t offer enough cash to allow the Wilpons to continue owning the Mets. That leaves two options- either the Wilpons find other ways to leverage the Mets and SNY, likely badly compromising their ability to spend money on the team’s competitiveness, or the Wilpons will be forced to sell the team.

We could learn a great deal more on February 9, when the motion filed by the Times and WNBC to unseal Picard’s suit against the Wilpons will be heard. We learned little during Friday’s conference call, and with reason- the Wilpons couldn’t speak about a matter under court seal. Left unsaid, of course, was that the seal came at the Wilpons’ request. If a court believes their reasons are not sufficient, much of the rest of the story will become public inside of two weeks from today.

Either way, though, the basics are clear. The Mets’ finances are sick. The hope that the Wilpons really were unaffected by the Madoff scandal has been permanently dashed. And the “uncertainty” that Fred Wilpon repeatedly cited during Friday’s conference call is the new financial reality, both for the Mets and their fans.

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Howard Megdal is the Editor-in-Chief of The Perpetual Post. He covers baseball, basketball and soccer for Capital New York, MLBTradeRumors.com, New York Baseball Digest and has written for ESPN.com as well as numerous other publications. He is the Poet Laureate for SBNation New York. His book about Jewish baseball players, “The Baseball Talmud,” is available for purchase on Amazon.com and wherever books are sold. His next book, "Taking The Field", is available for pre-order on Amazon.com and will publish in May 2011.

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1 Response to Now We Have A Diagnosis

  1. Stu B

    Reading the article, Picard sounds like a shark trying to extract money from Madoff’s wealthiest victims. If Wilpon knew Madoff was running a fraud, he would’ve been thrown in jail too. Wilpon is not the only party being sued, and Picard, the trustee for the Madoff liquidation proceeding, essentially is accusing people of being in kahoots with Madoff. Not being a lawyer, I’m not qualified to judge if this lawsuit is spurious, but it smells like it.

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