I haven’t had much to say here about the New York Mets owners’ Bernie Madoff-related financial woes, but there is one potential way they could have a major impact on stadium issues: In the unlikely (but not that unlikely) case that the Mets owners declare bankruptcy, the payments on Citi Field stadium bonds would be thrown into disarray.
As I just wrote this morning for the Village Voice website:
To get people to nonetheless buy these bonds backed by nothing more than the promise of the Wilpons, the Mets took out bond insurance with a company called Ambac Assurance Corporation, which pledged to pay out if the Mets defaulted. Which would have worked great, except that Ambac — like so many of the financial insurers caught up in the economic meltdown — filed for Chapter 11 in November, and doesn’t actually have $500 million to pay out to anybody. And after Ambac, there’s nobody: Anyone who bought Mets stadium bonds thinking that their money was safe with the nation’s third most valuable baseball team would be left holding worthless paper.
At that point, the [city Industrial Development Agency] would be faced with a choice: Tap the city treasury to make good on the bonds, or risk future bond buyers growing wary of city-related bond offerings. Disclaimers about “faith and credit” be damned, it’d be a tough call for an agency already facing one high-profile stadium-related default.
Do I really expect this to happen? Probably not. But nobody expected the Texas Rangers to end up in bankruptcy court either. It’s a situation that bears watching, let’s just say that.
Here’s someone worse than Madoff: texsquixtarblog.blogspot.com/2009/04/who-is-worse-bernie-madoff-or-rich.html
I do not think MLB (And more importantly the City of New York), will allow the Wilpon’s to let the Mets go b/k, and have everyone else holding the bag (Either thru the taxpayers paying for the Bonds or the Credit Rating going down). The big trump card the City has is future Willets Point construction, and the land it owns there. If the Bloomberg Administration so desires, they can simply do nothing, and let the next Administration deal with the Eminent Domain/ Van Wyck Expressway Ramps/ Environmental Cleanup issues, and the probability is the next Mayor will not be so pro-developer as Bloomberg, so it is quite likely they will be playing in the same dump of an area they have for decades (This of course, decreases the value of the franchise, if they have (or want) to sell).
I could easily see some kind of a deal where the Mets are sold (Allowing the Wilpon’s to get out of their hole, and victims of the Madoff Ponzi scheme to recoup some of their losses), and the ramp issue is settled (This would not only help the City, but the State (They cannot afford to see more tax $$$$$$$$$ being lost from the City), and the Obama Administration (They can kiss 2012 re-election goodbye, if the Unemployment Rate goes up, which it will if the the Financial Industry takes another hit)).
Relax, Mets fans… The Donald has pledged his willingness to ride to the rescue!!!
Does this mean that baseball will have to adopt a fall-winter schedule?
JB-
Someone just watched some ESPN 30-for-30!
Love it!
Sadly, Andrew, I’m old enough to remember the USFL as it imploded in ‘real time’… but yes, the 30 for 30 special on it was good, as they all have been.