Wilpons Could Get Help In Sale Of Mets From Increase In MLB Debt

The owners of the New York Mets may have recently gotten some unexpected help in their sale of the baseball team. The Wilpon family has been trying to sell the New York Mets for several months. A deal with Steve Cohen fell through in February.

It’s unclear how long the Wilpons can, or want to, hold onto the Mets The Mets are losing money and have a mountain of debt; $350 million on the team and perhaps another $450 on SNY, their 65%-owned regional sports network. Baseball was shutdown in Mid-March, and the latest proposal would have the season start in late June with no fans,. That would wipe out money from tickets, suites, concessions and parking—over a third of the team’s revenue.

Alex Rodriguez and Jennifer Lopez are trying to raise money to buy the Mets but are a longshot. Selling a team during a time of great economic uncertainty for the sport would depresses the price. longer the Wilpons can wait to sell the Mets, the better.

They may have some more breathing room. A source familiar with MLB’s finances told me that to help its 30 teams cope with the delay of the season baseball modestly increased its league-wide lending capacity. This the money baseball’s 30 teams can borrow from at very low interest rates because it is secured by large, contractual revenue streams, mainly its national television contracts.

As of September, MLB’s entire lending facility was about $3 billion. According to my source, “Baseball was very well prepared with its league-wide lending capacity and as a result only needed a modest increase.” Sources speculate that the Mets could have the ability to borrow another $20 million or so from the league. Not a ton of money, but arguably enough to make it a lot easier for them ride out the storm and sell when the sport’s economics are better or more predictable.

Yes, MLB does have debt limit guidelines. Teams are not suppose to have debt more than eight times operating income (earnings before interest, taxes, depreciation and amortization); 12 times for teams with new stadiums. But there is lots of wiggle room (see page 240 of the collective bargaining agreement) and the Mets have exceeded MLB’s debt guidelines before.