|A Tale of Two Cities - NY, LA and Ownership Issues||| Print |||Send|
Written by Jonathan Leshanski (Contact & Archive) on April 06, 2012
Neither situation was good for baseball. But they are entirely different animals in terms of how they got to where they are and how their ownerships have dragged them down.
It was about status, it was about flexing their muscle, showing power, about living large. Baseball seemingly had little to actually do with it. McCourt took the Dodgers organization and splintered it, much like an 80s corporate raider, spinning pieces into their own companies (for example, the parking concession became its own corporate group, instead of being under the Dodgers umbrella) in an effort to make more from the parts then he could with the whole. He was busy disassembling the Dodgers brand to make it as synonymous with McCourt as George Steinbrenner still is with the Yankees.
But the McCourt’s lavish lifestyle exceeded their ability to keep it up. They ended up leveraging the Dodgers and taking money from the organization to keep themselves afloat, driving the organization deep into debt, so much so that in order to meet payroll, the team had to borrow from MLB. Inexorably, that led to a shrinking Dodgers budget and a concurrent loss of competitiveness.
Yet the McCourt’s clung to the team, despite pressure to sell. A large part of that was due to the upcoming television deal, something the McCourts counted on to bail them out of debt. But a split between Frank and Jamie McCourt and a high profile divorce was just what MLB needed to pry the team away from McCourt in order to salvage the Dodgers.
The team was put up for sale by court order and has, barring the objections to financing, been sold to an investor group that includes former basketball star Magic Johnson for the highest price ever paid for a sports franchise, $2.15 billion. Yet just what the investors are getting for their billions isn’t totally clear. So many of the parts of the Dodgers have been bound up in contracts, spun off or manipulated. Frank McCourt even gets to keep part of the rights to parking at Chavez Ravine under the current deal.
Still, for Dodgers fans it’s the light at the end of the tunnel. The team is getting premier ownership that has shown it has very deep pockets and wants to make sure that theirs is one of the premier teams in the sport today.
What a different story in New York.
When Fred Wilpon bought out Nelson Doubleday and became the majority owner of the New York Mets back in 2002, he was given a lot of credit. He was a longtime owner who seemed to have nothing but the Mets’ best interest in mind. The Wilpons wanted to own a baseball team. They wanted to win championships. They wanted to give New Yorkers a legitimate rival to the Yankees. The only problem was that they thought they knew a lot more about baseball and how to run a team than they apparently did.
But they had plenty of money to throw at the problem in order to fix it. Hey, that’s why the Mets will still be paying Bobby Bonilla in 2036. The only problem was that the Wilpons had two major investments. The first was leveraged real estate and the second was money managed by their friend Bernie Madoff.
Real estate went south, endangering their wealth, then Madoff went to jail for the mother of all Ponzi schemes and the Wilpons found themselves in a perilous financial situation. And that’s taken a toll on the Mets in many ways.
Certainly before this point there were plenty of poor baseball decisions, bad contracts and embarrassing corporate gaffes. But when the money started drying up and the accusations of wrongdoing started circulating, the Wilpons ended up having to borrow money from several sources including MLB in order to keep the team afloat. Because of that, the various team budget items, including the player salaries, have been slashed to numbers that more closely resemble those spent by New York’s hockey teams than that of one of the City’s premier sports teams.
That certainly has lead to a vocal outcry among fans who have been calling for the ouster of the Wilpons, alternately begging and demanding that they sell the team or at least yield control of the organization. That’s something the Wilpons vowed not to do.
They’ve also been battling in court against trustee Irving Picard who represented those scammed by Madoff, and just last week reached a very favorable settlement, one which is likely to cost them less than $100 million dollars rather than the billion which Picard had originally gone after them for.
With that resolved, at least for the moment, and the recent taking on of a number of minority partners in the team, the Wilpons almost certainly will hold onto the team. However even though the money from minority shareholders has allowed them to pay back the loans they had taken out to pay for operational expenses, the team’s immediate future isn’t looking all that bright.
The Mets will likely exist in limbo for quite some time, dealing with austerity measures while the Wilpons try to regain enough financial footing to return the team to the big time. That could take years, and between the poor product on the field and the allegations of wrongdoing that many believe to be true, it might be enough to keep the fans away from the stadium.
The displeasure among the faithful has been staggering, perhaps more staggering than any downturn in local attendance in the modern history of the game. Despite the new, and lovely, ballpark, attendance for this product has been down to such a degree that the trend could actually push ownership into selling if it continues.
Plenty of fans have been voting with their wallets not to go to the games, and to a degree not even to watch them on the Wilpon owned sports network SNY. If the Wilpons don’t find a way to bring the fans back to the park the team could continue to bleed money, that probably is the only reason that could convince Mets ownership that it’s time to get out.