Under pressure because of a lawsuit from the trustee trying to reclaim money for the victims of the Bernard Madoff swindle, the New York Mets' owners said Friday they are exploring a partial sale of the team that would raise several hundred million dollars.
Mets owner Fred Wilpon and his son, chief operating officer Jeff Wilpon, retained Steve Greenberg of Allen & Co., a Mets director, a former deputy baseball commissioner and a son of Hall of Famer Hank Greenberg, to head the search for investors.
Fred Wilpon said the Mets were looking to sell a non-controlling interest of 20 to 25 percent and he did not envision giving up control of the franchise, which his family first bought into in 1980.
Court-appointed trustee Irving Picard has said the Mets made nearly $48 million in Madoff's scheme. He said the Mets Limited Partnership originally invested about $523 million, but eventually withdrew about $571 million from the accounts.
In December, Picard sued dozens of entities affiliated with the Wilpons, the family real estate company Sterling Equities and Saul Katz, Fred Wilpon's brother-in-law and partner in the Mets and Sterling. The lawsuit in federal bankruptcy court in Manhattan is under seal, and it's not clear what the Wilpons' potential liability is.
"Because of that uncertainty, it is prudent in my view and reasonable and appropriate for us to explore our options," Fred Wilpon said during a conference call. "It is the right thing to do from a business perspective."
In a statement issued before the conference call, the Wilpons said they would explore "the addition of one or more strategic partners."
The Wilpons have been involved in settlement talks with Picard, who did not immediately return an e-mail seeking comment.
Fred Wilpon said his family will remain the Mets principal and controlling owners. Jeff Wilpon said it was possible the team would recapitalize rather than sell a stake.
At a news conference in October, when general manager Omar Minaya and manager Jerry Manuel were fired, Fred Wilpon insisted the Mets were not impacted financially by swindle by Madoff, who before the Ponzi scheme became public was considered by the Wilpons to be a family friend. At the time, the Wilpons said they weren't looking to sell a stake
"Things have changed ... with the lawsuit," Jeff Wilpon said.
Fred Wilpon said the suit did not affect "the cash flow or the liquidity of the Mets in any major way at all" but said it created uncertainly about Sterling. Jeff Wilpon said the family could leverage its stake in the Mets, creating the possibility the money could be injected into Sterling.
Jeff Wilpon said a partial sale would "make sure the team is healthy so that we can put the proper players on the field" and create "flexibility" for new general manager Sandy Alderson.
The Mets finished 2010 with baseball's sixth-highest payroll at $127.6 million in going 79-83. They have not attempted to sign any top free-agents, instead adding players such as left-hander Chris Capuano ($1.5 million) and right-hander Chris Young ($1.1 million).
Wilpon and his family bought Nelson Doubleday's 50 percent of the Mets in 2002 after the team was appraised at $391 million. Last spring, Forbes estimated the Mets were worth $858 million, third in baseball behind the New York Yankees ($1.6 billion) and the Boston Red Sox ($870 million).
Doubleday & Co., a publisher, bought the Mets in 1980 from the family of founding owner Joan Payson for $21.1 million, with the company owning 95 percent of the team and Wilpon owning 5 percent.
When Doubleday & Co. was sold to the media company Bertelsmann AG in 1986, the publisher sold its shares of the team for $80.75 million to Wilpon and Nelson Doubleday, who became 50-50 owners.
The Wilpons said their shares in the SNY network will not be part of this transaction.