Mets received $25 million loan from MLB
The Mets got a $25 million loan from Major League Baseball in November to cover their short-term operating costs, said a person with knowledge of the situation.
The revelation of a loan from Major League Baseball is the strongest sign to date that the team's finances may be tenuous as team owners Fred Wilpon and Saul Katz face a lawsuit from the trustee for victims of Bernard Madoff that seeks to recover as much as $1 billion.
The trustee, Irving Picard, said in court papers that the Wilpons and Katz were warned by financial advisers that the huge investment returns they were getting from Madoff were suspicious. Picard said they turned a "blind eye" to what was going on.
The Wilpons and Katz have said they were victims of Madoff and did not know about his massive Ponzi scheme.
Wilpon and his son, Jeff, the team's chief operating officer, have said repeatedly over the past two years that the more than $500 million they claim to have lost when Madoff's fraud came crashing down in 2008 had not affected the Mets' financial health.
The Mets issued a statement Friday saying: "We said in October that we expected to have a short-term liquidity issue. To address this, we did receive a loan from Major League Baseball in November. Beyond that, we will not discuss the matter any further."
The Wilpons and Katz went public last month with their search for minority owners to offset the "uncertainty" brought on by the lawsuit against them and their partners in real estate powerhouse Sterling Equities. They are exploring options to sell about 25 percent of the team, which was valued at $858 million by Forbes magazine last year.
Major League Baseball provides teams with a line of credit of as much as $75 million annually, though there is a precedent for the league helping teams in need to get more than that amount.
Forbes has reported that the Mets have $375 million of debt on the franchise and owe $695 million on Citi Field.
The league issued the $25 million loan in November, weeks before Picard filed the lawsuit.
An industry expert said Selig had little choice but to fulfill the Mets' request for the loan.
"The reason why Major League Baseball has to do this is because they don't want the Mets' value to drop, because that affects the value of all the other franchises tremendously so," said New York University professor Robert Boland, who also is a labor, antitrust and criminal lawyer and a former sports agent.
The Wilpons' finances has been a theme at spring training. Major League Baseball Players Association executive director Michael Weiner visited the team's facility in Port St. Lucie this week and said he received assurances from the commissioner's office that the Wilpons will be able to make payroll every two weeks.
The Mets are expected to have a payroll of about $140 million this season, one of the highest in baseball. Boland said teams do not often have much cash flow during the offseason, which could have been a reason for the Wilpons' loan request.
Attendance dropped significantly last season as the Mets flopped in the National League East standings.
The Wilpons have maintained their goal is to retain control of the team.
With David Lennon