The Wilpon family, stung by losses and litigation stemming from convicted swindler Bernard Madoff's Ponzi scheme, is considering selling a minority stake in the New York Mets to infuse cash into the organization.
Principal owner Fred Wilpon and chief operating officer Jeff Wilpon announced Friday they had hired former deputy baseball commissioner Steve Greenberg, the managing director of Allen & Company, to explore "potential options including the addition of one or more strategic partners."
The Wilpons are looking to sell a 20 to 25 percent share in the team, but any sale would be limited to a stake in the team and not SportsNet New York or the stadium.
The Wilpons intend to maintain majority controlling interest in the Mets.
"Regardless of the outcome of this exploration, [Wilpon-owned] Sterling [Equities] will remain the principal ownership group of the Mets and continue to control and manage the team's operations," the Wilpons said in a statement. "The Mets have been part of our families for more than 30 years and that is not going to change.
"As we have said before, we are totally committed to having the Mets again become a World Series winner. Our fans and all New Yorkers deserve nothing less."
The Mets have vigorously asserted that the team has not been affected by the Madoff affair, so Friday's announcement that an infusion of cash from other investors is needed marks a deviation from past statements. The team has committed only $8.1 million in major league contracts this offseason, although the Wilpons still estimate the club's payroll will be in the $145 million to $150 million range this season because of past contract commitments.
"I want to emphasize that what we are discussing today has not and will not affect or change the Mets' day-to-day operations and control," Fred Wilpon said. "We will continue to operate the franchise in a first-class manner. This season we have one of the highest payrolls in baseball, as we have for the past several years."
The Wilpons and Sterling Equities were sued Dec. 7 by Irving H. Picard, the trustee charged with distributing money to victims of Madoff's Ponzi scheme, the organization acknowledged. The sides have been in settlement negotiations to recover ill-gotten gains. Some estimates say that Madoff swindled more than $20 billion from investors. Reports indicate that one Mets-related investment fund turned a $47.8 million profit as a result of the scheme.
The New York Times, citing two lawyers involved in the Madoff cases, reported Friday that Picard is seeking to recoup hundreds of millions of dollars from approximately 100 financial entities under the control of Fred Wilpon and team president Saul Katz. Picard has the leeway to not only go after ill-gotten gains but also can pursue greater amounts depending on what his investigation reveals about the conduct of Madoff clients.
In the lawsuit, Picard wants to recover $300 million of what he describes as "fictitious profits" accrued by the Wilpon and Katz business interests, as well as additional money, according to the Times report citing the two lawyers.
One source told the newspaper that Picard could seek up to $1 billion.
Picard has already recovered about $10 billion from other Madoff clients who the trustee alleged accumulated the funds improperly, according to the Times report.
Forbes has valued the Mets franchise at $858 million. Fred Wilpon, however, did not give any indication of what Picard is seeking and emphasized that the Mets don't have to do anything.
"At the end of the day, we may or may not do anything, but we are exploring options. ... A lawsuit brings uncertainty," Fred Wilpon said. "We're in confidential settlement talks with the trustee, and we hope those talks come to fruition, but that's uncertainty."
Fred Wilpon has acknowledged being a personal victim of Madoff, whom he trusted as a close friend. He became part-owner of the Mets in 1980 and bought out partner Nelson Doubleday to gain full control in 2002.
"I would say the Madoff issue, certainly for the people in this room that represent Sterling, their [lost] money 'smarts.' There's no question," the 74-year-old Wilpon said in October. "You don't like to lose money that is just stolen from you. But the betrayal is something I'll never, ever forget. I'll go to my grave in that one, as will Saul and Jeff and the rest of our partners. That was a total betrayal of us. We were investors for something like 25 years."
Greenberg acknowledged Friday that selling a controlling interest would yield a premium, but said: "We'll have a robust level of interest even in a minority [share]."
The market for buying sports teams is not hurting, Greenberg said.
"Never stronger," Greenberg said. "There was certainly a dip immediately after the crash in '08. All assets, I think, suffered, although interestingly the franchise value of major league teams suffered far less than virtually any other asset out there. But in terms of qualified buyers and interest in them owning major league teams across all sports, I would say never stronger, frankly."
Greenberg said plenty of teams have minority partners. He said that minority partners usually aren't added once a group has sole ownership, but he noted the NFL's New York Giants are an exception.
"The Yankees from the beginning of time have had minority partners. ... It's not that unusual," Greenberg said.
A minority partner does not have say in day-to-day operations, however.
Greenberg wouldn't say how long the process could take.
"It's starting today, and we'll see how it plays out," Greenberg said. "I have no timetable."