Flumoxity? ‘It takes one to know one-and vice versa!’
Flumoxity….baseball’s way of flimflamming through nearly any and all problems related to the game.
Baseball is a simple game. It is apparently for simple people.
But for the men running the game, they understand more than simple people can understand. For instance, the Band of 30 (those not so simple owners of Major League Baseball teams) occasionally join together to make policy. They have regularly scheduled meetings in AAAA resorts around the nation or the world to gather, talk, dine and make policy for America’s pastime. They have no fear of any overwhelming governmental intervention because they are immune to Monopoly.
Yet these folks, when they gather, can do some amazingly mystical things, like what happened early this year. This was the year when a new Major League Baseball Commissioner was placed on the job. Rob Manfred, succeeded Allan Huber ‘Bud’ Selig. He now sits in a big chair in MLB’s Manhattan offices on Park Avenue, not the one in Milwaukee, where the Commissioner Emeritus sits as an overviewer to allow him to collect a handsome pension, far above the one he would have earned as a used car salesman for his father’s Southside auto dealership. But one digresses because of the love of the man who brought baseball back to Milwaukee.
Alfred sez: “Today, if you ask a car dealer to let you see something for 10 grand, he’ll show you the door!”
One of his first decisions Mr. Manfred made was extraordinary. Imagine if you will, naming Barry Bonds the head of drug enforcement for the ‘good of the game’. No. That has not happened yet. Or, he could allow Pete Rose eligible for the Hall of Fame even though he confessed to betting on baseball games while he was a manager. No, that hasn’t happened yet. But beware. He could do something curious because in one of the first decisions he made when he became the new commish was to appoint New York Mets owner Fred Wilpon as the Chairman of Major League Baseball’s Finance Committee.
That is not a misprint. It is in fact truth. Rob Manfred named Fred Wilpon the overseer of MLB’s money…as the Chair of MLB’s Finance Committee.
Alfred sez: “Most people don’t act stupid: it’s the real thing!”
It is a strange choice. Wilpon was on the financial ropes after he was involved with Bernie Madoff.
His team allegedly owes hundreds of millions of dollars in debt and there is a question of whether the New York Mets franchise has been properly financed over the past half-dozen years. Fred Wilpon seems to be bad with money yet he will be in charge of counting Major League Baseball’s cash. Who would have guessed?
It takes all kinds of Brass Junk Hangers to make a decision like this and actually say ‘Public be damned. I’m the Commish!’.
And that he is.
He has to, however, in order to earn all of that annual pay, walk a high-wire act to make the bad inferences all go away. He has been handed a Selig legacy of personal friendship between the former Commissioner and his friend, Wilpon. Selig used personal relationships to build his internal baseball political power base. Favors flowed between the various owners. Selig to former Twins owner, Carl Pohlad, who lent $3 million short-term bridge loan to Selig’s Milwaukee Brewers in July 1995. Contrary to a Major League Baseball rule, the loan was not approved by other team owners at a time that Selig was serving as acting commissioner while continuing in his role as president and chief executive of the Brewers. Coincidently, Fred Wilpon of the Mets said at the time, ‘It may ruffle some feathers, but it’s inappropriate and sad that people would attack Carl and Bud on this.’ ‘Frankly, I’ve borrowed very little money in my lifetime,’ Selig said. ‘He [Pohlad] was a friend. He was a banker.’
Selig and the White Sox owner, Jerry Reinsdorf, who was more like a collusion brother where they together made a pact to keep players pay down, have had an ongoing friendship. They tried to fix free-agent pay scale. That didn’t work. But they tried.
Alfred sez: “Blood is thicker than water . . . but it makes lousy lemonade!
Fred Wilpon and his brother-in-law, Saul Katz, the Mets’ other owner, had been fighting a $1 billion lawsuit against them by the trustee for victims of the infamous Bernard L. Madoff’s fraud. The trustee, Irving Picard, accused them of using illicit profits from their Madoff accounts to fuel their sports and real estate empire. Selig was pleased that Wilpon and Katz, who said they were victims of evidence fabricated or misrepresented by the trustee, tried to sell nearly half the team to raise up to $200 million and the Commish felt it unnecessary to step in to force them to do any more.
The owners trying to get in on the inside, guaranteed high interest returns, had invested some $500 million with Bernard Madoff, the ‘Don of the Greedy’, whose Ponzi scheme collapsed in 2008. After everything unraveled, Mets ownership didn’t even get the benefit of being considered “victims” because they had made more in fictitious gains than they had lost. By 2011, Wilpon and Katz faced a $1 billion lawsuit from Irving Picard, trustee for the liquidation of Madoff Investment Securities, which accused Wilpon and his partners of being reasonably aware of Madoff’s scam while investing more money into it. Now, in 2015, the Mets owners gained a legal victory with Picard and agreed to a settlement whereas Wilpon and Katz could pay the trustee just $162 million, a fraction of the $1 billion he was seeking. Thus, the two will be liable for far less than that huge figure because it has been gradually offset by their losses as Picard continues to recoup funds lost for the Madoff fraud victims.
Alfred sez: “Who says nothing is impossible? Some people do it every day!”
The Wilpon family’s burden with the Madoff liquidation trust is down to approximately $60 million. In negotiating this down, Wilpon and Katz quietly managed to sell some 12 minority stakes in the team, 4% ownership each for $20 million apiece. One of the alleged buyers was noted hedge-fund operator Steven Cohen. This entire endeavor brought the brothers-in-law more than $200 million. They also had to then repay their $40 million loan from Bank of America and the $25 million loan from Major League baseball. All of this must have made the powers that be in the MLB feel like Wilpon was some sort of financial wizard.
But never let greed get out of sight too long. It seems, while the Madoff victims will recover 57¢ on every dollar they lost in the fraud, ESPN reported that this was good news for Wilpon and Katz. They can now deduct 57% of their Madoff losses ($178 million) from the $162 million in gains they owe the trustee thus bringing their new debt to just $60.56 million, payable in two installments in 2016 and 2017. And, that figure will likely go down again before the Mets owners need to make the first payment because Wilpon and Katz agreed to pay a guaranteed minimum of $29 million.
Ain’t it great to be an American in baseball?
Alfred sez: “A lawyer is someone who writes a 40-page document and calls it a brief!”
One can reduce a billion dollar debt down to perhaps only $29 million or, for the mathematically inclined, just 2.9% of the total originally owed.
But what legal maneuvering giveth, morality and the gods of baseball taketh away. You see the team and the cable network still carry a lot of debt, even as the owners’ debt to the Madoff trustee shrinks. Just last year, good ol’ Saul was reportedly considering selling his entire stake in the team, leaving his bro-in-law just a minority owner. While Saul may no longer be responsible for his brother-in-laws character, Wilpon was still able to get the team in legal trouble over sexual discrimination suits brought upon them by a former high level single executive. But, who’s counting?
Alfred sez: “Nowadays, the perfect crime is getting caught and selling your story to T.V.!”
They still have more money troubles than that. It is reported that the Mets still owe money to two players that haven’t played for the Mets in 20 years: Bobby Bonilla, who has $1.2 million coming to him every year until 2036 and Bret Saberhagen, who is owned $250,000 each year until 2029.
Now you can see just how good a money man this Wilpon is. The brothers-in-laws have managed to stay afloat largely by borrowing against the skyrocketing equity in their 65% investment in S.N.Y. Yes, that’s the cable home of the Mets. You see, it has been reported that they have been using the local sports television network boom to stave off bankruptcy.
It seems very logical. This Wilpon fellow really knows how to handle finances. Thus, who wouldn’t make him the Czar of all the MLB cash.
Which all begs the question: What’s he got on the Commish?
Alfred sez: ‘In retrospect, it becomes clear that hindsight is definitely overrated!’.