Tag:Fred Wilpon
Posted on: March 6, 2012 2:51 pm
Edited on: March 7, 2012 7:17 am

Owners should prevail, unless jury has Mets fans

PORT ST. LUCIE, Fla. -- The Mets suffered their first loss of what could be a very long season when bankruptcy court Judge Rakoff ruled Monday that team owners Fred Wilpon and Saul Katz must pay back up to $83 million in Madoff profits. Further, he ruled that they must stand trial for another $303 million. So the drama and unrest continues, into the baseball season.

Madoff overreaching trustee, Irving Picard, originally sought $1 billion from the Mets owners, so from that standpoint, Wilpon and Katz are already ahead of the game. But to no one's surprise, people close to the case suggest a loss of even $386 million could put their ownership in peril.

Beyond the immediate loss of up to $83 million and upcoming trial, the other bad part for Wilpon and Katz is that the case of their baseball lives is going before a jury. One thing they say about jury trials, they are unpredictable. The other thing about this jury trial, the jury could be made up of angry Mets fans.

Seeing what's happening on the field, Mets backers aren't in a very good mood these days. Wilpon contended when the Madoff story broke that their investment in him wouldn't affect their beloved team, but Mets fans know by now that most of their money is going to the owners' lawyers, not their outfielders, infielders, pitchers and catchers.

Wilpon and Katz have taken the payroll down an unprecedented $50 million. What's left on the hole-filled roster are veterans who have been disappointments in recent years and a whole bunch of kids with varying degrees of promise. Their $90-million payroll and limited talent doesn't become any major market, much less New York.

One piece of positive news for the Mets owners is that Judge Rakoff, a brilliant veteran jurist, signaled that he doesn't believe Picard has much of a case here for the next $303 million. Rakoff even tweaked Picard for producing more "bombast'' than "bombshells'' (Rakoff apparently has a writing touch), and indeed it appears Picard's case for "willfull bilndness'' by the Mets owners appears woefully weak.

There is no smoking gun, no e-mail from Wilpon or Katz suggesting they knew a thing about what Madoff was up to. That Picard found one or two or even three employees who suggested they thought (but don't know) Madoff might not be on the up-and-up isn't nearly enough. The former employee Noreen Harrington, who said she warned Katz, appears to have been prescient. But even she said she admitted to Katz she couldn't prove what Madoff was up to. (Katz claims not to recall the conversation.)

Picard may think Wilpon and Katz were knowledgeable investors, but there is no evidence they were. Real estate (and baseball) is their game. They obviously know real estate. (As for baseball, I'll leave that up to you).

There is not a scintilla of evidence they knew more about securities than all the 4,000-plus folks who foolishly invested their money with an epic scam artist. Madoff was obviously a very good con man. He fooled all this people plus the banks plus the SEC. Obviously a few folks knew. The crook who wound up dead in his pool in Palm Beach obviously knew; he got a 900-percent return from Madoff one year. His widow fairly turned over several billion dollars to Picard.

The Wilpon-Katz gains were generally in the 10-to-15 percent range per year, which is exactly what the rest of the rubes got. There is no evidence Madoff was paying them extra to be silent partners. And just because they saw each other at the country club or on the Long Island Railroad doesn't mean anything. Neither does it if the Wilpon and Madoff families vacationed togethers. As Rakoff said, where's the bombshell?

There is nothing to prove Wilpon and Katz were any different from the rest of the 4,000-plus dupes who knew nothing about stocks, bonds or investing. As many people should know, there is ZERO chance a securities investor can make 10-15 percent every year for decades without a single down year or even very much variation. It just isn't possible, as Harrington told them. Even Warren Buffett has down years. Even if he averages a whopping 20-percent a year for decades, that includes significant variation and some down years.

To say Wilpon and Katz should have known is silly, and a waste of breath. They ALL should have known. The SEC should have known. They are paid to know such things. But they, too, were duped by Madoff, who was seen as a pillar of the community.

Wilpon and Katz made their money by being aggressive and tough. Katz has big stones. (In his famous quote in the New Yorker article by Jeffrey Toobin, he boasted of having "big balls," something he didn't dispute when I questioned him about that quote earlier this spring. Though he did say that this is why he doesn't talk much to the media, and the smoother Wilpon does). I have known these guys for years, and I find it easy to believe that they knew next to nothing about investing in stocks. Like the others, they were fools (though perhaps fools with bigger balls in one case). They probably got a bit greedy, like when they gave Bobby Bonilla deferred payments for decades because they saw Madoff as a sure thing. But being greedy and crooked are two different things.

There is nothing to suggest Wilpon and Katz are crooks. But unfortunately for them, a jury of Mets fans may not see it exactly that way.

Posted on: February 27, 2012 3:29 pm
Edited on: February 27, 2012 4:42 pm

Fred Wilpon shoots high, predicts survival

PORT ST. LUCIE, Fla. -- Every year, kindly Mets owner Fred Wilpon gives his state-of-the-Mets address at about this time in spring training, and of course his predictions in recent years have, for the most part, overshot reality. This year, he offered predictions for both the team and himself, giving himself a chance for the first time to go 0-for-2.

First, about the team, Wilpon said, "I'm very optimistic that this team will be far better than you guys have reported. We're going to surprise some people.'' A snappy comeback might suggest that they'd surprise folks merely by winning a third of their games or even beating the '62 Mets.

As for the bigger question about franchise ownership, Wilpon said of himself and brother-in-law Saul Katz, "We plan to own the franchise for a very long time.'' Then, Wilpon, an eminently pleasant man, added his own punchline, saying something along the lines of "whether people or happy about that or not.''

The Mets arrived in camp with their first sub-$100-million team in a long time, the result of an unprecedented $50-million cut from their $140 million paryoll of a year ago. Their spin on it is they didn't finish the year with the big payroll and that their previous year's payroll was bloated with non-productive players, including the two now unmentionables, the perenially-picked on Oliver Perez plus Luis Castillo.

The reality is that no New York team should have a payroll as puny as $90 something million dollars, unless they've done such a terrific job of picking talent that they've gathered many underpaid players. That obviously isn't the case here. Their players are generally paid handsomely for what they bring.

Obviously, the biggest name hanging over camp continues to be Madoff. Some of the more inquisitive players are continuing to ask about what's going on with the case regarding the all-time crook, as everyone here knows it affects everything. Wilpon explained that his prediction when the scandal broke that Madoff would not affect the team came when "we weren't being sued.'' Wilpon's contention is they would have been fine had Madoff trustee Irving Picard not sued them for clawback monies and more. But now it's still uncertain whether they'll be fine.

Now they definitely can't say Madoff hasn't affected things. Sure, they have been losing and having trouble drawing. But does one respond to that by returning with a payroll that's $50 million lower? Of course not. Madoff hangs in the air.

Wilpon, pressed a bit, did admitt Madoff had some effect on the greatly lowered payroll, which included the loss of superstar Jose Reyes to the rival Marlins. Speaking specifically about Reyes and Madoff, Wilpon said, "It has had some effect, but that was not the deciding factor.''

Wilpon maintained, though, that the Mets made an offer to Reyes that would have allowed him to make close to $100 million (with many incentives), in opposition to Reyes' contention 40 miles down the road in Jupiter, where he repeated again just Sunday that there was never an offer for him. (It's possible that the Mets suggested that that's where they might go, which in Wilpon's mind must count as an offer, though in reality it technically is not an offer to Reyes, not when there's a concrete $106 million waiting in Miami.)

Madoff isn't only hanging over the team, it is hanging over the ownership team of Wilpon and Saul Katz. Wilpon can speak optimistically about his chances for ownership survival, and he might end up being right about it, but it's too early to know for sure.  Picard is still looking for $300-million more from them at a time when they are in debt to a lot of folks already. "We'll see,'' Wilpon said. "Things will be a lot clearer in the next few months.''

Wilpon's future with the team is going to come down to the court cases that will likely be played out soon. One person familiar with the issues said he believes Wilpon and Katz "need a lot of things to go right'' to survive as owners. But one thing you have to say about Wilpon and Katz, they are nothing if not survivors.

It's not sure the same could be said for their diminishing team. 

Category: MLB
Tags: Fred Wilpon, Mets
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