September 22, 2020

For Sale: A Team With a Colorful Financial History

When Nelson Doubleday, John O. Pickett and Fred Wilpon bought the Mets from the Payson family for $21 million in 1980, it was a relatively simple transaction.

“It took us one week from the phone call,” Doubleday said. “We don’t fool around.”

Things haven’t gone so smoothly with the Mets’ financial dealings since.

The team is up for sale again, with a first round of bidding having concluded this week, according to multiple news media reports. The latest chapter has already involved a scuttled deal, a family feud and, somehow, Jennifer Lopez. Throw in a Ponzi scheme and a notorious contract, and you have a most colorful financial history.

Wilpon initially owned just 1 percent of the team. In 1986, he exercised a clause in the deal that allowed him to buy the team — much to his partners’ displeasure — and he ended up with 50 percent ownership after a settlement. Then in 2002, he tried to buy out Doubleday entirely.

Doubleday refused after an appraiser had set a price, and, predictably, a lawsuit ensued. Wilpon contended that Doubleday was obligated to accept the valuation, which would have made Doubleday’s half worth $137.9 million. Doubleday had been looking for about 20 percent more.

Doubleday claimed he had been “double-crossed” by a “sham process.” He claimed in legal papers that Major League Baseball and the Wilpons were “in cahoots” in a scheme to keep team values down and manufacture “phantom operating losses” to make the game seem less financially sound and in that way create an advantage in negotiations with the players’ union. (Baseball dismissed the claim as “nonsense and a complete fabrication.”)

In the end, the ex-partners reached a deal and the Wilpons took over.

Like many wealthy and well-connected people, the Wilpons invested money with a financial manager named Bernard L. Madoff, who had impressive — and, in retrospect, unbelievable — rates of return. When it was discovered in 2008 that Madoff was running a Ponzi scheme, the Mets were bruised financially.

Though the team lost plenty of money, it had for years earned “profits” with Madoff’s investment firm. When some of the victims further down the pyramid sued to get a portion of that cash, the team wound up paying out tens of millions more.

Although it was not nearly as financially ruinous as the Madoff investment, a deal the Mets negotiated in 1999 with Bobby Bonilla was, and remains, a constant source of humor around the sports world. Bonilla stopped playing in 2001, but the Mets agreed to keep paying him $1.2 million a year … until 2035.

In 2011, the Wilpons moved to sell a minority share of the team to a hedge fund manager, David Einhorn, for $200 million. The deal did not come to fruition.

One problem was that Einhorn wanted to be preapproved by Major League Baseball to become the team’s majority owner in the event he bought a larger stake in the team in the future. Einhorn said the Mets backed down from agreeing to authorize this; the Wilpons denied doing so.

There was also tension over how much authority Einhorn would have as minority owner, with Einhorn hoping to be heavily involved and the Wilpons expecting to keep full control of team decisions for themselves.

Aborted deals like this one helped give the Wilpons a reputation for making last-minute changes in negotiations with partners, government officials and even players. As The Times put it earlier this year: “Just when a deal appears to be done and it is time to shake hands, the Wilpons reach for a little more.”

Last year it appeared the Wilpons were finally ready to sell a controlling interest in the Mets. The prospective buyer was the billionaire hedge fund owner Steven A. Cohen, already a minority investor, who was seeking 80 percent of the team.

The sale was inspired in part by bickering among the Wilpons. Fred Wilpon is in his 80s, and he and the second generation do not always see eye to eye. Some in the family were said to be wary of the eldest son, Jeff, being in charge.

Yes, the deal with Cohen fell apart, too. Once again, the issue of who would control the team was central to the collapse.

It seemed that despite their plans to sell 80 percent of the team to Cohen, the Wilpon family expected to continue to run the team for five years. When the sale was first announced, Cohen agreed to allow Fred and Jeff to keep their titles. Cohen had apparently expected those titles to be ceremonial; the Wilpons had other ideas.

(At around the same time, hundreds of wry Mets fans began sending General Manager Brodie Van Wagenen tiny sums on Venmo, a tongue-in-cheek protest against what they perceived as stinginess by the front office in its spending on players. “I didn’t realize I had a Venmo account until some of the emails and notifications started coming through,” Van Wagenen said.)

But now Cohen appears to be taking another swing at buying the club.

The Mets have remained for sale, and Fox Business reported this week that Cohen placed a $2 billion bid for the team and an additional $2 billion for the club’s cable network, SNY. (His earlier effort to buy the team did not include SNY.)

Other groups of bidders have emerged, too, and one of them included Jennifer Lopez and her fiancé, Alex Rodriguez.

Mets followers, many of whom would not weep if the Wilpons were no longer owners, would be forgiven for maintaining a healthy skepticism.