Manny, Madoff, and the Mets: Fate of Slugger, Stadium Rights Tied to Broker
Should Manny Ramirez find himself playing somewhere other than Flushing in 2009, Mets fans might be forced to blame somebody with absolutely no connection to their baseball team.
This same man may also be at least partially responsible for whether or not team ownership, led by Fred Wilpon, backs out of their advertising deal with Citigroup, the company their new, state of the art ballpark bears the name of.
Stadium Rights "Berning" Up
Unless you've been living under a rock, the man I'm referring to is Bernie Madoff.
Madoff was the man behind the now infamous ponzi scheme which lost investors of his a collective $50 billion.
Among those investors were the Wilpon's, who reportedly lost between $300 and $500 million.
Of course anybody who has been a Mets fan long enough knows that with this team, when it rains it pours. Well, wouldn't you know it, the team finds itself in even more financial uncertainty with Citi, who is paying the club $20 million a season for the next 20 years (that's $400 million for you art majors), as the company recently required a $25 billion bailout from the Government.
Before beating the proverbial dead horse and discussing Manny Ramirez again, let's talk dollars and sense (see what I did there?).
Citi Field, the world class new home of the Mets, is set to open for business in just over two months. When the Mets signed their deal with Citi back in November of 2006 (a day which included the naming rights to the ballpark and a number of other advertising perks) both the global financial crisis and the name Bernie Madoff couldn't have been farther from the team's radar.
If you're asking yourself how the two are connected, it's a good question with a simple answer. (I'll preface this by saying I'm not a financial expert and I have absolutely no inside knowledge on either of these situations other than what I've read in the paper and seen on the news.)
If you choose to believe the Wilpon's when they say the financial stability of the team was completely unaffected by the Madoff losses, which I don't, then there wouldn't be any connection between the lost money and their deal with Citi.
However, the deal the Mets have with Citi has come under intense scrutiny amidst all of Citi's financial woes. Citi has vowed that the deal is as strong as it was when it was agreed upon, and that none of the money they will be giving to the Mets will be coming from their federal bailout money.
Again, you can choose to believe what you want, but the whole thing doesn't sit right.
Here's where I can make a relatively simple connection between the two situations:
It has not been disputed that the Wilpon's lost a significant chunk of money in the Madoff scandal, and while they claim the operations of the baseball team weren't affected, I don't see how the loss of up to $500 million would warrant them opting out of a deal which over the next 20 years would pay them $400 million, regardless of the public opinion surrounding said deal.
**It was reported just this morning in the Wall Street Journal that Citigroup may in fact look to find a way to back out of their marketing deal with the Mets, which would certainly add a very interesting twist to all this.**
Columnists can write as many articles as they'd like pushing for the Mets to end their relationship with Citigroup, however it's easier said than done.
Again, I have no idea how these big naming rights deals work, but for the Mets to just throw away the $400 million they have coming to them, regardless of whether or not it consists of federal bailout money, doesn't make sense.
Mets fans are not going to boycott games simply because of the name outside the ballpark. Also, for all the commercially endorsed stadium names out there (Petco Park?), the name Citi Field could be worse.
Bottom line is, at least as far as my non-professional, relatively uneducated opinion is concerned, I don't see the Wilpon's cashing out of their deal with Citigroup.
What about Manny?
Now, assuming Citigroup and the Mets continue their partnership, the Mets will open their home schedule at Citi Field, and the big question that remains as far as the baseball team itself is concerned is will the team go out and make Manny a Met.
It was reported just this morning that Ramirez was offered a one-year, $25 million deal from the Los Angeles Dodgers, which he declined.
Yesterday, the Mets put the finishing touches on a contract with left-hander Oliver Perez, which will keep the southpaw in Queens for at least the next three seasons at $12 million per.
Including Perez, the club's payroll sits somewhere between $130 and $140 million, which is where it was last season (143 mil to be exact).
In addition to stating their bad investments had no impact on the baseball team, the Wilpon's have indicated they would like to see the payroll stay at or below the number it was at last season. If that's the case, general manager Omar Minaya is likely done shopping.
However, until Ramirez is signed, there is no reason to give up hope on the Mets making one final splash this offseason. How plausible signing Ramirez is once again can be tied into all of the financial issues we've already discussed.
Signing Manny won't be cheap, and exactly how much money the Mets are left to spend isn't known to anybody but the people signing the checks.
If you want to talk finance, you can talk about how signing Manny Ramirez could conceivably have the same impact on the Mets that Brett Favre had on the New York Jets (from a business standpoint).
I can't see how ticket sales and jersey sales (along with other merchandise) wouldn't skyrocket with Manny on board. The Mets already can count on strong ticket sales with the opening of their new ballpark, however with Ramirez in the lineup I find it hard to believe the place wouldn't be totally sold out more nights than not.
I don't have to get into the Manny brings to the lineup as far as productivity is concerned, however if the Mets can in fact find a way to make this work from a monetary standpoint, they have to get it done.
The team is coming off consecutive seasons ending with a September meltdown that Mets fans (like myself) would compare to the economic crisis plaguing the country.
Whether or not the Mets sign Manny Ramirez will likely come down to money, and how much of it the Mets have to spend and how much of that money they're willing to spend.
Investing is all about risk versus reward, and the Manny debate is no different.
The risk's are known and well documented.
The reward would be certainly be worth it.
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