Monday, August 24, 2015

N.Y. Mets: Gorilla Math Workshop

From the desk of:  HEAD-BUTTNG MR. MET

Buckle up..., we still have a long bumpy road ahead.

NEW YORK METS: The season is far from over.  In fact, it's just getting started.  But....

Killjoy here...

I admit, a pennant race is no time for bringing up this crap.  But, that's what I do.

Sometimes I make this Trolley an intentionally bumpy ride.  I'm a fair person though.  Therefore, you have have three options:
  • Trust me, and hop on.
  • Learn to compartmentalize, quickly.
  • Get off now.

Ready to play Reality Money Ball?

1st Inning: Financial conditions were already spiraling out of control well before the Mets got ripped off by Bernie Madoff.  Just ask Jim Duquette...

Once former co-owner Nelson Doubleday and Fred Wilpon agreed to part ways in 2002, they viciously haggled over the team's appraisal value.  The issue was never resolved to Nelson Doubleday's satisfaction.  The deal nonetheless called for Doubleday receiving half his buy-out value up front, with the remaining 50% due over the next three years.

Concurrently, former GM Steve Phillips not only earned his dismissal primarily due to his own personal dysfunction, but for also assembling a last place club and sticking Mr. Wilpon with the highest payroll in the National League as well.

It was under those conditions Fred Wilpon elected to put his dream of constructing Citi Field into motion.

While appealing to banks for financing, he placed strict spending restrictions upon new GM Jim Duquette, as expected.

2nd Inning: Omar Minaya teaches ownership how to dance salsa style, and they liked it!

Omar Minaya convinced ownership to reopen the checkbook and spend like drunken sailors. Speculatively speaking, this in turn intensified ownership's increased reliance on Bernie Madoff related investment accounts as a way of funding Omar's machinations.

Meanwhile, impressive attendance during Shea Stadium's final seasons served to bolster Fred Wilpon's bid for financing, as he boldly promised potential lenders Citi Field would average 3.5 million fans annually.

Worth noting, the naton's upward climbing economic bubble had yet to burst. The Mets and Yankees were combining to draw in excess of 7-million fans a season.

3rd Inning: Cash cow sent to the slaughter house, sending Mets to the poor house.

As if Mets fans need reminding what happened next...

In a New York minute, revelation of Bernie Madoff's ponzi scandal brought this organization to its knees.

Suffice it to say, without getting into all the exhaustive details and financial minutia that has transpired since December 2008, Mets ownership is still matriculating the same slippery slope of onerous debt all these years later.

After refinancing collateral SNY debt in 2013, ownership yet again refinanced $250 million of organizational debt in January 2014 (that was due later that summer) with payments to be extended over 7-years.

This past Wednesday, Josh Kosman of the N.Y. Post reaffirmed the Mets ongoing financial dilemma:

"Mets owner Fred Wilpon, and co-owner Saul Katz last month quietly refinanced roughly $700 million of debt owed by the team and SportsNet New York, the regional sports network controlled by Sterling Equities, two sources close to the situation said. 
The new five-year loans against the separate entities carry lower interest rates and tie the maturity dates together the source added."

4th Inning: But Why So Quiet? It's not like we didn't already know.

By the end of Spring Training 2014, though, I felt the collective local media grew tired of following an increasingly convoluted money trail, and thus ceased providing updated, detailed information regarding the organization's true financial standing.

Instead, lazy analysis prevailed, accusing ownership of running a small market outfit in a big league town (..only somewhat accurate all things considered), and/or, essentially labeling them as cheap.

Perhaps the conversation simply wore thin, or not.  After all, a growing number of individual performances, such as that of Jacob deGrom's, somewhat took the collective mindset off money matters and focused them more on the game itself.

The lack of follow-up and general silence nevertheless struck me as peculiar considering the 800-pound gorilla never left the room.  The usual outlets casually broached the subject, but only infrequently, and only in the mildest of terms.

Fifth Inning: Numbers can be tortured, but they tell no lies.

The one thing I am certain about, is that numbers do not lie.  You can torture statistics into saying anything you want, but numbers themselves tell no lies.

Ownership lowered payroll from $137 million in 2008 (2nd highest in MLB), all the way down to $73.3 million by the 2013 season.  I found little coincidence in so far as the deducted figure conveniently covered their annual debt on Citi Field.  Priorities, right?
This season was the first time in 7 years ownership tangibly raised payroll.  But what if I told you ownership is spending as much today, as they did on the 2006 N.L. East champs?

With the signing of Michael Cuddyer, this year's payroll began at roughly $101 million, indeed matching that of the 2006 season.  The trade deadline acquisitions of Juan Uribe, Kelly Johnson, Yoenis Cespedes, and Tyler Clippard then raised (short-term) payroll by an additional $8.5 million.

Ownership's expenditures were somewhat off-set by the insurance money recovered on David Wright's contract, the additional savings stemming from Jenrry Mejia's PED suspension, and by a modest 2-year rise in attendance.

Sixth Inning: You can call me Ray, or you can call me Jay. You can call me RayJay, or you can call me JayRay. But ya doesn't have to call me Mr. Johnson.

If you get that reference, it means you're getting old dude..... Anyway;

We've all railed against, and called Mr. Wilpon many things over the years.

If you're of the mindset they're consistently making bad decisions, and how almost everything they do makes us shake our collective heads in dismay, like:
  • Fred didn't want to re-sign Mike Piazza, yet found it appropriate having Piazza close Shea Stadium's doors along side Tom Seaver.
  • the grand opening of Citi Field (aka Ebbets Redux) failed to include a Mets Hall of Fame,
  • the original home run apple got hidden in a broom closet,
  • etc., etc.
We could go on..

I'll also accept, either because they can no longer afford to maintain a higher standard, or due to their general lack of baseball smarts, the Wilpon/Katz partnership is incapable of operating this organization to fan's satisfaction.

In fact, Fred Wilpon's involvement with Bernie Madoff has inspired varying, creative, and sometimes amusing methods of fan revolt. Again, well deserved.

Sell the damn team even..... I'm just going to agree with all of it.

That said, regardless of what we, you, or I think of Mr. Wilpon, he has always maintained (financially speaking) his goal was, and remains to break even. On that, I take him at his word.

Wilpon and Son, and Saul Katz, are not reliant on the Mets for keeping their house lights on, or warming it during winter. They made their personal fortunes through Sterling Equities - and that's not our business.

That may be exactly what our problem is as Mets fans.

However, let's be fair. Mr. Wilpon is a lot of things (to us). But, he's not cheap.

7th Inning StretchThis is not some hops and barley induced Socratic apology for Fred Wilpon and Son!

C'mon, Trolley Riderz know me better than that.

You know I'm one of Mr. Wilpon's harshest antagonists.

The Head-Butting Mr. Met portion of this blog features several ongoing Metsian drama series such as The Age of WILPONianismThe Son of PON, and of course, my favorite, The Saul B. Katz Dilemma.

Eighth Inning: I got your operating revenue right here!

In both 2008 and 2009, they maintained the 2nd highest payroll in baseball behind the New York Yankees.  The Madoff situation then starting exacting its affect upon the Mets.
  • 2010 - $132 million; 5th
  • 2011 - $120 million; 7th
  • 2012 - $93 million; 14th
Between 2013 and the present is when ownership refinanced the great majority of their massive debt as we understand it today.

They did so with their SNY related debt in 2013, the organization's own in January 2014, and as noted, on a grander scale again this summer.  That's why they achieved their payroll low of $73 million in 2013, ranking them 23rd in baseball.  Last year, they ranked 22nd, and entered this season ranked 21st.

Throughout his tenure as general manager, here's what Sandy Alderson couldn't say - Look, these guys are flat broke, therefore, the team is going to suck for a while. So, just shut up and take it.

Outside of his minor league development, however, Sandy Alderson steadfastly implored our patronage would ultimately decide much regarding the near future (under the present ownership, that is).  Quite obviously, that still applies because after all things considered therein lies Fred Wilpon's only tangible method for improving the team.

Ninth Inning: Destabilizing Math.

The Mets truly have more problems than a math book. In the Wilpon's particular situation:
  • (debt x arbitration) - (free agency + trades) = continuing trouble ahead.
Next season, Bartolo Colon's and Daniel Murphy's contracts come off the books. Curtis Ganderson's contract, however, runs through the 2017 season.  By then, salaries for the Mets arbitration eligible players will begin multiplying.

Further threatening to financially destabilize the Mets are David Wright's physical status/franchise contract, Lucas Duda's short/long term future with the Mets, the crucial matter of retaining Yoenis Cespedes, as well as the eventual yet unavoidable confrontation pitting ownership versus Matt Harey's agent, the notorious Scott Boras.

Post-Game: Gorilla, thy name is Trouble.

Put another way, that 800-pound gorilla will be hanging out for at least another 5-years. We might as well give it a name...

In the mean time, enjoy this year's pennant race.

That is all.

Killjoy out.

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