(video culled from MetsBlog)
Mets owner Fred Wilpon has kept a low profile of late, respectfully not wishing overshadow the star power of new acquisition Shawn Marcum. However, once surrounded by reporters earlier today in St. Lucie, Wilpon did an excellent job of stressing that simply because his ballclub couldn’t seal the deal with Michael Bourn (or any other free agent of consequence), the near-term financial future of the Amazins’ is not something we should worry our little heads over. The ever skeptical Howard Megdal of Capital New York considered Wilpon’s insistence that “it’s all in the rear view mirror…the family is great shape” (HAVE YOU SEEN JEFF WILPON’S ABS?) and helpfully points out that…Fred might be totally full of shit.
According to public Uniform Commercial Code filings, the following people had outstanding debt as of Monday, February 11, 2013: Fred Wilpon, Saul Katz (Fred’s brother-in-law and fellow partner in Sterling Equities), Judith Wilpon (Fred’s wife), Richard Wilpon (Fred’s brother), The Fred Wilpon Family Trust, The Fred Wilpon 2003 Descendants Trust, and numerous other Wilpon and Katz family members.
That’s beside the point, really: it is a pair of enormous debts against a pair of Sterling Equities’ holdings that have caused ownership to dedicate available resources toward servicing that debt annually, and whose principal is coming due. (The Mets declined to comment on whether Wilpon’s comments applied to either of those debts.)
U.C.C. filings confirm that the $320 million debt due against the team in June 2014 is an active debt. And Wilpon and his partners already owed $450 million against their 65 percent ownership stake in S.N.Y., due in 2015. Their latest loan, an additional $160 million secured in December, added to that total.
For Sterling to be debt-free, Wilpon and his partners, less than two months after borrowing $160 million to help pay, among other things, day-to-day expenses, will have needed to come into possession of more than $900 million to take care of these two debts alone. Merely refinancing, or convincing lenders to push the due date back, wouldn’t make them debt-free, according to any reasonable understanding of the term.
He appears to catch Mr. Wilpon in a lie, assuming he’s read the commercial code filings correctly, but Mr. Megdal’s analysis strikes me as meaningless, because it lacks context.
It’s my understanding that most ballclubs are debt-financed operations (as are most businesses of that size and risk). Is the Mets’ annual debt servicing obligations a higher percentage of their annual earnings than those of their peers? Is the ratio of total debt to equity out of step with that of other ballclubs?