The Mets are Worthless

Fred_wilpon_mets
Isn't it refreshing to see worthless used without a stupid Jayson Werth pun? Yes, yes it is.

A few days ago, news broke that Mets owner Fred Wilpon, who allegedly profited under Bernie Madoff's ponzi scheme, planned to sell a minority stake (20-25%) of the team so he could offset a planned $48 million settlement with the trustee for the bankruptcy of Madoff's business.

The Mets were valued at around $850 million last year, meaning that the minority stake would have gone for around $200 million. Not so fast, Fred. Today's NY Post reports that the Mets are $700 million in debt, meaning that minority stake is only worth around $39.5 million. Quick math tells me that the Mets, in total, are worth only slightly more than Cliff Lee's contract. Heh.

The Amazin' Mets, folks.

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10 Responses

  1. 160 mil? It makes sense that the Mets are worth as much as Cliff Lee. Since both of them will probably have the same amount of wins this year.

  2. Kyle, the Mets are worth $800 million, a figure that takes into account the debt they carry. I don’t have their balance sheet, but put Citi Field, Mets IP, a 60% stake in SNY and MLB revenue against their debt. Their income statements are private, but I imagine that they pull in between $50 and $100 million in net income a year (much of it probably deferred for tax and debt servicing reasons). You don’t get the value of a company by just liquidating its assets–you are ignoring the cash flow of the enterprise going forward.

  3. Cole- read the linked articles, the $700 million in debt comes off their books and essentially makes them worth around $150 to a new owner- at least in terms of stake. obviously the lee thing was a joke, but technically their net worth is $150.

  4. But the team has roughly $700 million of debt, and that should be subtracted from the valuation when calculating what an owner’s stake is worth, sources said. Using the $858 million valuation and the $700 million in debt, a 25 percent stake in the free equity amounts to just $39.5 million — not the $200 million asking price.

  5. So technically speaking the phillies could buy the Mets and make them a farm team and at the same time play them all year long beating them into submission

  6. Kyle, you are not take into account cash flow (i.e. 25% profit distributions over x years). The debt is amortized over decades. The buyer is not buying 25% of the tangible assets but a quarter of the equity in the enterprise. The NY Post story is silly.
    If you want to poke fun at the Wilpons, look at the $571 million they withdrew from Madoff accounts. The Picard lawsuit (Wilpons made money off Madoff) is what precipitated this sale.

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