Most Active Stories
Tue March 20, 2012
Settlement Is Latest Blow For Cash-Strapped Mets
STEVE INSKEEP, HOST:
It was two outs, bottom of the ninth for the New York Mets. Facing a civil trial in federal court this week, they managed to pull off a clutch out of court settlement with a price tag of $162 million, the value of a long-term contract for a star player. The team's owners reached that deal with the trustee recovering money for victims of imprisoned financier Bernie Madoff.
But as WNYC's Janet Babin reports, any relief is tempered by the team's long-term financial struggles.
JANET BABIN, BYLINE: The Mets owners have a long history investing with Madoff. And when his Ponzi scheme surfaced, they, along with thousands of other investors, lost money.
But Irving Picard, the court appointed trustee recovering funds for victims, said Mets owners Saul Katz and Fred Wilpon were sophisticated investors. He sued them, saying they knew or should have known about the fraud, and should have to pay back some of the profits they made over the years.
But just before jury selection was to begin yesterday, David Sheehan, the attorney for Picard, told reporters they'd reached a settlement.
DAVID SHEEHAN: The most important thing is, is that the victims now will receive the benefit of $162 million dollars. Ultimately that's the goal of all the litigation brought by the trustee, is to enhance the fund for the victims.
BABIN: The Mets have at least three years to come up with that cash. And as Madoff investors, they're also trying to recover $178 million they lost. So they may not have to pay anything out of pocket.
Attorney Helen Davis Chaitman has been following the case. She represents about 850 other Madoff victims.
HELEN DAVIS CHAITMAN: The settlement does not require the defendants to write a check today, at all. All they are doing is assigning to Mr. Picard, their claim for that $178 million.
BABIN: Baseball is a superstitious sport, and the Mets haven't won The World Series since 1986. On the courthouse steps, it sounded like Mets president Saul Katz was hoping a hex against the Mets had been broken.
SAUL KATZ: Litigation is negative energy, and so we are very pleased to have this behind us.
BABIN: But it may take a bit more than a court settlement to break the Mets slump. Wayne McDonnell is a professor of sports management at New York University.
WAYNE MCDONNELL: The Mets need probably about $200 million pretty quickly, and that's not going to have anything to do with the Madoff case by any means, it has everything to do with covering the day to day operations, spring training expenses, payroll and other debt obligations that are baseball related.
BABIN: McDonnell says the Mets are no match for that other New York ball club, the New York Yankees, they can't hit like them, or spend like them, at least anymore. Plus, the team's having trouble drawing crowds to home games. Mets fans have become a rare find on Manhattan streets.
(SOUNDBITE OF STREET TRAFFIC)
BABIN: Looking for a New York Mets fan, anyone, follow baseball? New York Mets?
UNIDENTIFIED MAN: Yankees.
UNIDENTIFIED MAN: Yeah, sorry.
BABIN: But you can still find diehards, like Gary Shaffer of Brooklyn. He says he won't desert his team for the Yankees.
GARY SHAFFER: In some ways, I think people have almost had enough of them at this point, and there is that realization that the Yankees team has been put together and been successful because they can outspend everybody else.
BABIN: That's a claim no one could lob at the cash-strapped New York Mets. The team's season opens April first against the Florida Marlins.
For NPR News, I'm Janet Babin in New York. Transcript provided by NPR, Copyright National Public Radio.