Mets and Madoff, hopelessly intertwined

February 2, 2011 by Jason@IIATMS

Just when you thought the Mets’ situation was bad and getting worse, today we learn more about just how hopelessly intertwined the Wilpon’s and Madoff were:

The former employees of the Mets said substantial aspects of the club’s financial operations seemed to flow through, or wind up with, Mr. Madoff — annuities set up for players, cash generated by sponsorship deals, and more. The team regularly discussed investing deferred money from long-term player contracts in Madoff accounts. Bobby Bonilla was among the players who had their deferred money put with Mr. Madoff, one former employee said.

The other quotes are equally damning:

“They both relied on one another,” [said Jerry Reisman, a lawyer]. “It was reciprocal, symbiotic. They both relied on each other for money, and Bernie also relied on Fred for contacts.”

“Bernie was part of the business plan for the Mets,” a former employee of the club said.

You can’t help but feel somewhat sad for Wilpon, that he was totally led around by Madoff. Sure, smart self-made rich guys usually don’t get that way by accident but when the cash is flowing into your accounts rather than out, the level of oversight and due diligence can wane.

(click “view full post” to read more)

The second quote, that Bernie was part of the Mets’ business plans, however, is the most troubling. The article indicates that all of the deferred comp for executives and former players (like Bonilla) were all invested in Madoff. With that money gone or subject to clawback, the Wilpon’s are on the hook for this. These future obligations will loom large in the Mets new operating plans.

Fred Wilpon was quoted on Friday that this entire situation will not overhang the organization:

“I want to emphasize that what we are discussing today has not and will not affect or change the Mets’ day-to-day operations and control. We will continue to operate the franchise in a first-class manner. This season, we have one of the highest payrolls in baseball, as we have for the past several years.”

Maybe not for 2011, but going forward, this overhang, if not sufficiently resolved, will absolutely hinder the Mets ability to remain at the top of the payroll ledger. Which is why the Mets brass with Selig yesterday:

Fred Wilpon, the team’s principal owner; Saul Katz, an owner and the team president; and Jeff Wilpon, Fred’s son and the chief operating officer, met with Selig in a session that had been scheduled before the Mets announced last Friday that they were seeking minority partners to ease their financial burden.

Like any corporate restructuring plan, I’m sure the Mets had to present their path forward and how they were going to achieve the necessary results and financial liquidity with two scenarios: Both with and without the financial life preserver they are seeking.

The clock is running.

 
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1 Response » to “Mets and Madoff, hopelessly intertwined”

  1. Andrew says:
    February 2, 2011 at 12:52 pm

    Based on what has been reported, if the Wilpon's didn't know it was a ponzi scheme, Selig can definitely relate to the Wilpon's turning a blind eye to illegal activities motivated by huge profits resulting therefrom



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