Q & A with Richard Sandomir

Richard Sandomir is a reporter for the New York Times, he has been all over the Wilpon Madoff mania.

NYSC: Is there a way the Wilpons could possibly remain the majority owners, or is the sale of a majority share inevitable?

Sandomir: It doesn’t seem terribly promising that the Wilpon/Katz family will be able to retain majority ownership of the team. But I don’t think anybody knows for sure. So much hinges on the resolution of the Picard case. If Picard gets $1B, they will have to sell so much that you have to wonder if they have assets that we don’t know about — or their real estate holdings and other assets are so valuable and can be sold at such a profit– that would enable them to hold onto the team. Since Sterling Equities isn’t public, we don’t know everything about their holdings.

NYSC: The Mets have not had to pay salaries since October, they will have to start doing so in a week, can they afford to pay everyone on the roster their full year salary, or will they have to move players like Beltran or Reyes?

Sandomir: With a payroll of about $140 million, the Mets have to write checks totaling about $12 million every two weeks, starting April 15. What we don’t know, again, is what hinders a firm judgment. Do they have money left over from the $25 million loan that MLB advanced them last April? Have they fully spent the $75M from MLB’s credit line? Will they have enough money from season tickets, club seats and luxury suites to tide them over?

NYSC: It seems as though the Mets are tapped out, so much so that Major League Baseball had to loan them money, is there any possible sort of credit/capital besides taking on an investor?

Sandomir: I don’t know where else they can go for a loan at this point–unless one or more of their current banks gives them a bridge loan when it’s clear that they have lined up a buyer for the minority stake. But that’s the rub: no one seems enamored of buying a non-controlling stake without getting some part of SNY or a road map to take control of the Mets in a few years. And as my story the other day showed, 2010 was a bad year, with big losses, and 2011 doesn’t look like rosy.

NYSC: Given Forbes most recent apraisal of the Mets at around 14% less than last year, naturally the Wilpons will have to sell more of the team to raise that money, could they sell more than one piece to different investors, therefore still being able to be majority owners with less than half ownership?

Sandomir: I’m not sure that MLB would want to get into parallel approval processes for two different sets of investors. One thing that could happen is that the Mets, or their investment banker, or MLB, would convince two or more groups to merge together into one.

NYSC: Do you believe “super” Mario Cuomo will bring about a settlement, or will the Wilpons try and force a verdict to clear their name?

Sandomir: Based on their filing last Sunday seeking dismissal of Picard’s case, the Wilpon/Katz families seem willing to fight. The allegations in their filing — that Picard has withheld or distorted evidence — indicates a desire to prove not only that Picard isn’t being fair to them, but that he doesn’t have the requisite evidence to show that Wilpon and Katz should have known that Madoff was engaged in a fraud. Indeed, they are trying to show that they are unsophisticated investors and were in the dark with all the other victims of the scheme. Wilpon and Katz’s legal team say they aren’t fully prepared for the mediation without all the evidence they say they need, so it’s hard to say how successful Cuomo will be if one side says it doesn’t yet know the source of some of the allegations against their clients.

NYSC: How will this end up?

Sandomir: Too many variables to say how it will end up. I think the key is how much the Mets’ owners end up paying Picard. Then there’s how long this drags out. Does it end fairly soon in mediaiton? Does it drag out in a trial? Do the Mets play badly, hurting stadium revenues more than they already have been?

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