The Daddy Warbucks Effect
By Fahim ‘Coach Fah’ Nassar
I am a Met fan. Have been one since 1983. Two years before I started watching the Knicks and five years before I cared about the Giants and Rangers, I was a Met. Being a Met fan in Queens was what you were supposed to do. Mookie Wilson was my favorite player and the wonder twins, Darryl Strawberry and Dwight Gooden lit the town on fire. My friends and I used to play stickball in Saint Anthony’s parking lot off Rockaway Boulevard after school and weekends, often reminiscing about the games we just saw played. Our moms bought us bats and gloves, and I thought myself quite the pitcher back then.
Over the years, being a Met fan has had its ups and downs. The Piazza era, The Wright Stuff era. The one thing that has held us back however, especially in the last 10 years has been lack of explosive players-in their primes- primarily because the ownership was not into spending money on players. Not even home grown players who hit the cover off the ball like Daniel Murphy… when he was hitting the cover off the ball. It was quite frustrating to let free agency periods come and go with us getting average players, not needle-movers.
I used to routinely hear the name Wilpon during venting sessions of airing frustrations. I was never one to follow the ownership, as typically they did not intervene as much as presidents or general managers. That is, until James Dolan came across my sights, but that is a conversation for another day. Today, it is about the Wilpons, and with Steve Cohen being approved by the MLB Board of Governors to be the next Mets owner, that is a good day. At least we think so.
As for the Wilpons, their horrid attempts at greed and their Gordon Gekko machinations have turned a valuable and promising franchise into a perennial playoff abandonment. Most think, its due to their frugal nature. Others believe it’s because they are broke-ish. Both can be true, especially when you understand how damning the Madoff debacle was for the franchise.
To go forward, let’s go back. All the way back to 1986 for a moment. Fred Wilpon had a small stake in the New York Mets since 1986. That wonderful year. 1986. Oh how we miss you so.
In 2002, he decided to up his stake and become controlling officer of the Mets. Impending doom clouds the future of a once-proud franchise. Below is a breakdown of why they invested so mightily in Madoff and why it eventually killed our cap internally. This is from SBNation 03/30/2015 article by Thomas Kearney.
1) High returns—The Wilpons were getting (fictitious) annual returns of 12-18% from their investments with Madoff.
2) Consistent returns—Madoff never failed to produce double-digit returns, even for a single year of their multiple-decade relationship. These consistently high returns are a big part of the reason the Mets made deferred-compensation agreements with Bobby Bonilla and others; they figured that instead of paying the players while they were playing, the Mets would give that money to Madoff. Then, by the time the deferred compensation was due, the investment would have grown enough to easily pay off the promised compensation with money to spare.
3) Liquidity—The nature of the Wilpons’ relationship with Madoff allowed them to invest their money, profit from it, and then turn around and reinvest both the principal and the profit to really accelerate their gains. They felt comfortable operating like this because they knew that whenever they needed a little extra cash, they could withdraw it from their Madoff accounts with no problem.
How much did the Mets lose when Madoff went bust?
When Madoff went bust, the Mets’ ownership had, according to their eventual settlement, approximately $500 million invested in Madoff accounts. The Wilpons also had used that money as collateral for other loans. The collateral going bust resulted in ownership having to borrow an additional $430 million against the team (now down to $250 million), and $450 million against SNY (now up to over $600 million). Financing these debts, as well as the $43 million annual payment on Citi Field, costs the Mets over $100 million each year, before any of the principal is paid down.
- The Mets and Bernie Madoff: A Primer by Thomas Kearney SBNation 03/30/2015.
How can you build a team and guarantee salary when you cannot guarantee to have said finances? Literally robbing Peter to pay Paul as a business model. Not only is this a terrible business practice but it is also a terrible way to run a franchise. With so much uncertainty upstairs, it is little a surprise why the Wilpons wanted yes-men not baseball guys running the team. No offense Mickey and Broadie but real baseball guys would know something was up as soon as they started asking about high-value assets.
Right today, Mets fans all over are rejoicing the fact that Steve Cohen, American billionaire hedge fund manager, worth 14.1 Billion dollars is in principle, the new owner of the Mets. Are we doing that simply because ‘ding-dong the witch is dead’? Or because we thing Stevie Warbucks is going to open up his wallet to potential free agents and soon the Mets will be the belle of the ball? All of this remains to be seen. I will say that there is hope on the horizon if for no other reason that the Mets may actually pay their home grown stars like Conforto, Nimmo, and Dom Smith instead of watching former players enjoy offseason glory on other teams. (If I see Justin Turner one more time!). Maybe we will be in the running for a Mookie Betts or someone of that caliber.
Or, he is a stingy billionaire in his own right and the ownership is a strategic move for himself, not necessarily the fans. We don’t know. We literally have nothing to go on but hope. Let’s face it, that’s how it is for every team going into a new season and it is a Met fans’ status quo. Hope.
Perhaps it’s time for the Mets to get their due. After nearly thirty years with the same ownership, met fans can finally rejoice to at least a new voice in the room. Perhaps.