Source: Cash-strapped Mets borrow another $40M
The Mets obtained a loan in recent weeks, the team confirmed last night, from at least one lending institution. The team, still facing cash-flow difficulties, borrowed $40 million, a source said.
"The bridge loan was approved by Major League Baseball and the syndicate of lenders to the Mets," the Mets said in a statement. "The process for the sale of minority shares in the team continues to go very well.''
The loan marks the latest development concerning the club's finances and raises further questions about the Wilpons' and Saul Katz's ability to run the team for the long term.
The team owes $25 million to MLB for a loan issued in November 2010 and, reportedly, hundreds of millions more to financial institutions -- the aforementioned "syndicate of lenders." The Mets' owners are also facing a lawsuit from Irving Picard, trustee for the victims of Bernard Madoff, who is trying to recover as much as $386 million. There is a jury hearing set for March 19.
The Mets announced last January that, as a result of Picard's litigation, they were willing to sell a minority portion of the team. They proceeded to come to an agreement with hedge-fund magnate David Einhorn on such a sale in May, only to see the deal dissolve on Sept. 1.
Since then, mindful that Einhorn would buy in only if given a window to take over control of the Mets, the Wilpons and Katz have searched for buyers willing to invest $20 million each for roughly 4 percent of the team, totaling a $200-million infusion for 40 percent of the team. The Mets referenced that sale in their statement Monday night, and last month the team was confident that it had seven verbal commitments. But nothing can be finalized until all of the shares have been secured. According to a source, there is no timetable for the completion of Major League Baseball's vetting process for potential investors.
The Mets let Jose Reyes go to the Marlins for a six-year, $106-million deal last week, and general manager Sandy Alderson said the decision was fueled more by baseball business than by the Madoff mess. Because the team lost $70 million in 2011, Alderson indicated, it needed to get its payroll more in line with revenues.
The Mets' payroll likely will drop to about $100 million or even below that for 2012, Alderson has said, after fielding a $140-million team in 2011.