Imagine the New York Yankees with a payroll of $130 million. The last time that happened was 2002. Imagine the White Sox with a payroll of $81.3 million. That happened last in 2005. The Red Sox had a payroll around $100 million in 2003. The Cardinals have not had a payroll of $70 million since 2000. Why am I playing the role of “The Ghost of Payroll’s Past”? It recently became public knowledge that the New York Mets ownership is planning a payroll of $91 million for the 2012 Mets. That is why.
The Mets are expected to have a cut in payroll of around $52 million from 2011 to 2012. The $52 million drop represents a 37% cut and would bring the Mets salary back to the days of 2001/2002. Those may have been good years for the team, but in 2002 their payroll was in the Top 10, not the basement.
The $91 million payroll puts the Mets in a class with the Cincinnati Reds, Colorado Rockies, Baltimore Orioles, Toronto Blue Jays and Seattle Mariners. The issue is that the Mets are not supposed to be in that class. They are supposed to be in the class with the Philadelphia Phillies, Los Angeles Angels, Detroit Tigers and Boston Red Sox. They are from New York, they own part of a regional sports network and they have a brand new stadium. There is only one reason why the Mets are financially handcuffed, stubborn ownership.
Back in December, I wrote an article taking a quick look at the Mets financial status (http://www.85percentsports.com/2011/12/17/the-new-york-mets-financial-status-a-quick-look/). The Mets had just taken a $40 million loan from Bank of America above the other loans that had been given over the past year. I detailed how the Mets financial woes were affecting the organization. A few days earlier, I wrote an open letter to the owners of the Mets asking them to sell their team (http://www.85percentsports.com/2011/12/13/an-open-letter-to-the-new-york-mets-owners/). With the recent payroll announcement I believe more now than ever that there needs to be an ownership change.
During the 2011 season, the Mets traded away Carlos Beltran and Francisco Rodriguez. They have allowed a cornerstone of their franchise walk away to a division rival without even making an offer. One of their free agent starting pitchers has moved on. They have $55 million locked in to 3 players, two that are untradeable. Around the Mets, the National League East is becoming one of the top divisions in baseball. The Phillies are still the Phillies with two of the top starting pitchers in the league and a great lineup. The Braves have consistently put out a winning product and barely missed the playoffs in 2011. The Nationals and Marlins have each made huge splashes in the off-season. The Nationals have added pitcher Edwin Jackson, reliever Brad Lidge, traded for Gio Gonzalez and will have Stephen Strasburg back and will most likely add prospect Bryce Harper to their lineup (85% Sports’ own Eugene Tierney, prospect analyzer extraordinaire has listed Harper as the #1 Prospect in all of baseball). The Marlins have added Reyes, pitcher Mark Buerhle, closer Heath Bell, named Ozzie Guillen manager have are moving into a new ballpark which means they will have more cash to spend. The Mets will have a dismal season.
The Mets organization lost $70 million in 2011. In the third year of a brand new ballpark, they averaged 30,108 in attendance per game, down 7% from 2010. Let’s be real, we all know Major League Baseball keeps track of tickets sold (reported attendance), not actual bodies in the ballpark. So, the Mets average will be considerably less based upon attendance reports throughout the season. In 2012, the ticket prices are being reduced 5% to 30% depending on location of the seats. Ironically, with a team that needs revenue, lowering the prices seems like the wrong thing to do. However, it is hard to continue to charge top pricing for a mid-level on-the-field team.
Here are some details about the finances of the owners of the New York Mets:
- The Wilpons are currently being sued by Irving Picard who is the man who is in charge of recovering funds lost during the Bernie Madoff Ponzi scheme. The range of potential funds to be recovered is $83 to $386 million.
- They owe $50 million each year in interest for the $700 million in bonds used to finance the construction of CitiField.
- They owe nearly $50 million in interest each year for loans for SportsNet New York (SNY), which the Wilpons owe 65% of.
- A $430 million loan against the New York Mets due on June 2, 2014
- A $450 million loan against SNY that is due on June 4, 2015
There is a lot of money out there owed. On a positive note, the ownership expects to gain $100 million from 5 sets of shares of the team sold to investors for $20 million a piece. This money would allow the Mets to pay back the $25 million owed to Major League Baseball and $40 million owed to Bank of America. That would leave $35 million to help float the finances of the organization. However with revenues expected to be lower in 2012 than in 2011, who knows how bad the situation in Flushing can get.