The family that owns the Mets threw a curveball Friday, announcing they will try to sell up to 25 percent of the team to help cover a potential legal settlement arising from the Bernard Madoff megafraud.
The surprise move came after continued insistence by the Wilpon family that their Madoff entanglements would not have any impact on the Mets. While they did not discuss an asking price for a minority stake in the franchise, the sell-off could raise $200 million or more. The team was valued last year at $858 million by Forbes magazine.
The Wilpons' decision was prompted by a lawsuit filed Dec. 7 by Irving Picard, the special trustee in the Madoff bankruptcy case, who is seeking to recoup or "claw back" some of the profits the family allegedly made as the luckier investors from Madoff's $68-billion Ponzi scheme.
The Wilpons are looking to raise cash "to address the air of uncertainty created by this lawsuit, and to provide additional assurance that the New York Mets will continue to have the necessary resources to fully compete and win," Fred and Jeff Wilpon said in a statement.
The father and son, whose Great Neck-based Sterling Equities real estate conglomerate owns the Mets, insisted they would maintain principal control of the team, and that the partial sale of 20 percent to 25 percent to "one or more strategic partners" would not hurt the franchise.
"What we are discussing today has not and will not affect or change the Mets' day-to-day operations and control," Fred Wilpon, chairman and chief executive of the Mets, said in a conference call with reporters, joined by his son, the chief operating officer.
"We will continue to operate the franchise in a first-class manner."
The extended Wilpon family had scores of accounts with Madoff, including family trusts and real estate investment entities. They have been involved in ownership of the Mets since 1980, when Fred Wilpon and Doubleday & Co. bought the team for $21.1 million. The Wilpons have been the sole owners since they bought out Nelson Doubleday in 2002.
It's unclear how much the Wilpons could lose because of the Madoff debacle.
They and Steve Greenberg, of the investment bank Allen & Co., declined to discuss Picard's suit Friday, saying only that settlement negotiations are "ongoing."
But bankruptcy court filings last year said the Mets Limited Partnership, of which Fred Wilpon is chairman, took out more than $45 million above the $522.7 million it had invested with Madoff.
Some financial experts think the trustee is looking to reclaim much more from the Wilpons and their wider business empire, and the Mets owners' attempt to raise $200 million or more buttresses that view.
Fred Wilpon, who invested with Madoff for a quarter century and considered him a friend, said last October that "the betrayal is something I'll never, ever forget. I'll go to my grave on that one."
After the Madoff scandal erupted at the end of 2008 and the Wilpons' entanglement with him became known, the Mets dismissed suggestions they might have to sell part or all of the team.
In September 2009, Dave Howard, the team's executive vice president, said, "The team is not for sale - whole or in part. . . . There's no need to sell. There's no reason to sell. There will be no sale and I can't state it any more definitively than that."
As recently as last month, after Picard filed the complaint against business entities connected to Fred Wilpon, Sterling Equities said in a statement, "We want to emphasize that the New York Mets will have all the necessary financial and operational resources to fully compete and win. That is our commitment to our fans and to New York."
It was unclear who might take up the Wilpons on their offer for a minority stake in the Mets, but financial experts said they did not immediately expect any big-name investors, who most likely would want to control the team themselves.
Despite the Wilpons' insistence over the last two years that the Madoff scandal has not had any impact on the Mets, the sale is the clearest sign yet that it has.
Aside from signing Jason Bay to a $64-million contract in 2009 and Oliver Perez the off-season before to a $36-million contract, the Mets have not spent as much on free agents as they had in the years before the Madoff scandal.
The Mets finished under .500 the last two seasons. In the two seasons before that, they collapsed in September, failing to make the postseason and disappointing fans.
With Jim Baumbach