The Mets Got Another Loan

The Wilpons reach out for $40 million in working capital to tide them over

By Josh Alper
|  Tuesday, Dec 13, 2011  |  Updated 8:08 AM EDT
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Another day, another $40 million in debt.

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Frank McCourt must look at the Mets' financial situation and ask just what he did to make Bud Selig dislike him so much.

The Mets recently took out a $40 million loan from Bank of America -- playing in Citi Field apparently has no bearing on banking preferences -- to provide them with working capital while they try to sell minority shares of the team to outside investors.

It is the second time they've needed an infusion of cash within a year and they have yet to pay back the $25 million loan they took from Major League Baseball.

McCourt also tried to finance his ownership of the Dodgers through a series of loans, but Selig eventually stepped in to block them from going through to force the Dodgers to be sold after going into bankruptcy.

The Mets' loan was okayed by Selig, a close friend of Fred Wilpon.

Bridge loans like this are common for entities that don't want to tie up funds in the short term for operational purposes because they have other needs for them, but unusual for any long stretch of time because they carry high interest rates. We're not sure what the Mets' time frame is to pay back this loan, but we know what they need in order to pay it back.

The team is trying to get 10 minority investors to hand them $20 million apiece to pay down their debt, a process they claim is going well. They say they have seven investors lined up, but no one actually has to fork over any cash until all 10 have been secured. 

So this could just be a case of the Mets making a routine financial move while they wait for the investors to give them money, meaning all is well with the Mets financially and this is a mountain out of a molehill. That explanation would work a lot better if not for the Mets' history of prevarication when it came to their finances.

We heard for a long time that the Madoff business didn't hurt them and then watched the payroll for 2012 shrink faster than George Costanza's anatomy after a swim in a cold pool. They continue to insist that there's no need to sell the team, even though they can't afford to keep it running without regular loans.

In the New York Times article that broke the news about the new loan, "two people with knowledge of the team’s finances said that if a full lineup of minority stake investors was not in place by next spring, and cash not in hand," the Mets would "have to confront the prospect" of selling the team.

Perhaps that's why they are selling the shares like they are an infomercial -- seven already gone, just three remain and if you order now you get an autographed Josh Thole bath towel! -- while simultaneously telling everyone that there simply isn't any reason to suggest things aren't fine and dandy with the organization.

There are 40 million more reasons to make just such a suggestion right now, money that keeps flowing in simply because SNY is such a good asset that banks are happy to limit the return to the Wilpons if (when?) it winds up needing to be sold along with the Mets.

Why Selig is so thrilled to have debtors owning what should be one of the league's most vibrant franchises is a much harder question to answer.

Should the Times report be correct, we won't have to search for an answer too much longer.

Josh Alper is a writer living in New York City. You can follow him on Twitter and he is also a contributor to Pro Football Talk.

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