Baseball

Mets vs. Royals is the World Series of Misers and Moochers

Owners who won't invest in their teams but take hundreds of millions in public financing face-off in the Fall Classic.

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The World Series, the final best-of-seven series to determine the champion of America's nominal pastime, commences tonight between the New York Mets and Kansas City Royals, two teams who haven't won a championship in 29 and 30 years respectively. Much has been made of the extended suffering endured by both teams' fanbases, but less attention has been paid to the primary cause of said suffering: ownership.

I'm still calling it "Shea."
Dreamstime

Both the Royals' and Mets' owners are extraordinarily wealthy, yet have consistently put out rosters with low payrolls and reaped hundreds of millions in taxpayer subsidies on the businesses they refuse to personally invest in. 

In the case of the American League's entrant, Kansas City Royals owner David Glass was the CEO of Wal-Mart (yes, that Wal-Mart) from 1988 to 2000 and has been notoriously cagey about revealing his personal wealth, though he's been "thought to have a net worth of approximately $1.8 billion dollars," and the team he bought for $96 million 15 years ago is now worth $700MM, according to Forbes

After years and years of salary cellar-dwelling, Glass has increased payroll over the past few years to about $113MM, placing it in the middle of the pack of MLB's teams and leading to three consecutive winning seasons following 29 years without a postseason appearance. However, as recently as 2012, he was claiming that he needed to keep his payroll "in the $70 million range…for us to break even." 

When Edison Volquez takes the mound tonight before a packed crowd at Kansas City's Kauffman Stadium, Royals fans will be celebrating the team's second consecutive World Series appearance in a ballpark they have been helping to subsidize not just with the money spent on tickets, beer, soda, hot dogs and assorted tchotchkes, but through a three-eighths cent county sales tax. Since 2006, local taxpayers have ponied up $225MM to subsidize the home team, which gussied up its stadium with "New concourses, more concession stands and other upgrades made it a fancier — and more expensive — place for fans to visit." 

In the case of the National League champion New York Mets, their ownership group led by Fred Wilpon (also the chairman of the real estate consortium Sterling Equitiesclaimed to have been so devastated by the loss of their investments in Bernie Madoff's Ponzi scheme that they could not be expected to field a team with a payroll representative of the largest media market in the country. Despite being supposedly bound for a pauper's grave, they never considered selling the franchise (valued at $1.35 billion), refused a "white knight" investor when one came available, and remain one of the biggest real estate magnates in New York

In a very useful recap of the relationship between Mets' ownership and Bernie Madoff, Thomas Kearney at Amazin' Avenue writes

When Madoff went bust, the Mets' ownership had, according to their eventual settlement, approximately $500 million invested in Madoff accounts. The Wilpons also had used that money as collateral for other loans. The collateral going bust resulted in ownership having to borrow an additional $430 million against the team (now down to $250 million), and $450 million against SNY (now up to over $600 million). Financing these debts, as well as the $43 million annual payment on Citi Field, costs the Mets over $100 million each year, before any of the principal is paid down.

Though their $500 million disappeared, Saul Katz and the Wilpons had been reaping false profits for years. The trustee for the Madoff victims sued to recover those profits, and eventually settled, with the stipulation that the Wilpons and their associates had made $162 million over the years in accounts with Madoff. While Wilpon supporters will try to point to this relatively low settlement figure as proof that the Wilpons were not guilty of wrongdoing or negligence, trial documents indicate that the nature of the final settlement was more of an acknowledgment of the unlikelihood that the trustee would ever collect a large judgment, given the dire financial straits of the Mets group. This is evidenced by the fact that the amount the Wilpons will ultimately pay is significantly less than the amount that the trustee for the Madoff victims had already won from Katz and Fred Wilpon in pre-trial motions.

Somehow, the Wilpons still came out ahead after their dance with Madoff, as they were only obligated to pay $29 million to Madoff's victims, all of whom held assets that couldn't come close to matching that of the Wilpon empire which has relied on eminent domain to clear out small businesses around the Mets' ballpark in order to develop an urban "megamall."

When Game 3 starts this Friday night at 7 year-old Citi Field, an $850MM "retro" stadium whose construction was aided by $450MM in public financing, Mets fans will get to enjoy their first Fall Classic action in 15 years. Named after the "too big to fail" financial services behemoth that took in $476.2 billion in bailout money from U.S. taxpayers following the 2008 economic crisis, Citi Field's corporate namesake will pay the Mets $400MM over 20 years for the right to associate itself with New York's "working class" baseball team.

When the deal for the Mets' stadium naming rights was announced in 2009, CNN reported:

Citigroup, which now does business as Citi, has been the recipient of billions of dollars in taxpayer-funded bailout money over the past year, causing many to question the prudence of $400 million going toward branding Citi Field, especially when Citigroup cut nearly 75,000 jobs in 2008, capped by 50,000 announced in November.

Baseball has a long and rich history of rich guys pleading poverty and easily convincing jock-sniffing sycophants in government to provide taxpayer money for their vanity projects. For more, check out my review of Jon Pessah's seminal history of the business and politics of baseball over the last quarter century, "The Game," and the Top 5 Pointless Congressional Hearings on Baseball.

Watch below for an analogous example of why taxpayers should stay out of the business of subsidizing professional sports teams, no matter the game:

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  1. Reason must taint even the most American of events with its dogmatic politics!

  2. Glass like nearly all owners these days is a welfare queen. I do not, however, think that his lower payroll is a result of his being a miser. Glass seems to genuinely want to win and put a competitive team on the field. Glass just realizes that in the post steroid era you can’t buy your way to a championship anymore. He hired a good GM and concentrated on building his farm system and building a team from the ground up rather than buying one. I don’t see why there is anything wrong with that.

    1. agreed the days of “buying”(see Dodgers, Boston) a team just doesn’t happen anymore the league’s talent is just so spread out and by the time some of the higher priced guys hit the market they are already past their prime.

      1. See Cueto, Johnny. They thought he’d be the primary starter when the Reds traded him away.

    2. in the post steroid era you can’t buy your way to a championship anymore

      I don’t follow baseball so this surprises me. In soccer you most definitely can buy a championship. See: every league in Europe. There is no such thing as “spreading the talent”.

      1. Baseball players cannot become free agents until they have played five full years in the major leagues. Unless they are a prodigy, most players don’t get to the major leagues until they are 24 or 25 years old. So they don’t become eligible for free agency until they are in their late 20s or sometimes early 30s.

        Steroids more than just increasing power, extended careers. It allowed players to be elite into their mid to late 30s, where very few players had ever been so in the past. This made free agent signings very beneficial. Now that they are testing for steroids, you are seeing players’ start to decline in their early 30s like they used to. And that has made it much harder to build a great team through free agency.

        1. Yeah, it’s a lot simpler in Europe. If you’re not under a contract, you’re a “free agent”. And contracts are more or less meaningless when another league decides to swoop in with enough $$ buy it out.

          The end result is what we see there – two or three teams dominate for decades at a time.

  3. And lets not forget, the Sabrmetric dorks and their “Pakota” prediction system pegged the Royals to win 72 games this year. Instead, the Royals won the Central with the best record in the American league and backed that regular season up by winning the pennant again. And that is a beautiful thing.

    1. There’s a place for Sabermetrics, but it’s strong suit is not projecting team results.

      Royals have been a buyer the past few trade deadlines, so Glass has certainly opened the purse strings a bit.

      1. He did once they had a chance to win. The fact is big money free agency signings rarely work out very well. Smart teams, even ones with big money to spend, have started to shy away from them. For example, the Cardinals let Pulhose go to the Angels and the Yankees let Robinson Cano go to the Mariners. It just doesn’t make sense to give players over 30 bit money long term deals anymore.

        1. the Yankees let Robinson Cano go…

          …what are they paying Ellsbury?

          1. Nothing close to what Seattle is paying Cano. And Elsbury is six years younger. Free agency can make sense but rarely with players over the age of 30.

            1. Especially at 2B, which tends to age quickly. I watched Utley basically fall off a cliff, production-wise, in a few short years.

            2. Ummm….

              Ellsbury is 32 and has a 7 year contract for $153 million
              Cano is 33 and has a 10 year contract for $240 million

              Not exactly penny pinching or getting a great deal on a young player.

              1. Ellsbury was 30 when he signed the contract. Older than I thought but still younger than Cano. More importantly, his contract is three years shorter. The Yankees will be off the hook paying Ellsbury when he is 37. To keep Cano, they would have had to obligate themselves until he is 40.

                Ellsbury hasn’t worked out as well as hoped. But it was still a better signing than Cano.

                1. I’ll give you that. Interestingly, the Yankees best offer was 7 years at $25 million per, so Cano opted for the years – as he should. Still, with so much money sloshing around baseball I think it’ll be hard for any club with any money to resist paying up for big name players, though you might see more attempts like the Yankees to pay more but agree to fewer years.

                  1. The difference between a club like the Yankees or Red Sox and a club like the Royals is not that the Royals can’t sign a big free agent. They could and might. It is that if that signing goes south, the Yankees and Red Sox can still field a competitive team and the Royals would be screwed.

        2. Teams have gotten better and smarter about holding onto young cheap talent.

          1. Yep, when teams like Tampa Bay and Pittsburgh started extended guys like Longoria and McCutcheon, it became a lot harder for the big money teams to poach top talent consistently.

            MLB has even whittled down the big market teams’ advantage in international signings.

          2. The way I hear it, the Royals have had one of the best farm systems for a long time but sell off their talent to big market teams as soon as they get a ridiculous offer. Someone in the organization had the bright idea that if they keep the talent in KC they might make a World Series and who knows; win it.

            1. Sucking for 30 years has it’s advantages.

              1. Just ask your mom.

        3. Yep. Better to let a guy go a year too early than to overpay for a five or six year contract. I mean, the Dodgers still have Kevin Brown money on their payroll, for fuck sake.

          Also, nice to see you’re back John. Missed your commenting. Hope all is well.

        4. Are you saying the Mariners suck?!?

          The truth hurts.

          1. They were stupid for giving a long term deal to anyone over 30. Steroids more than anything else allowed players to be good longer. Without steroids baseball is a young man’s game again.

    2. Should we also mention the ill-fated prediction of Back to the Future 2 who put the Cubs 2015 World Series champions? 😉

  4. Someone still watches baseball? Huh – good to know?? Or I just don’t care. I’ll go with the latter.

    1. I know, right? I say the same thing about basketball.

      1. I say the same thing about all sports.

  5. I kind of hope that the Mets win, mostly because they told loathsome money-grubbing scumbag Scott Boras to go fuck himself when he tried to get them to shut Matt Harvey down for the season.

  6. Where I live, advocates of taxpayer-financed stadiums say that neighborhoods near such stadiums are booming. Never mind that neighborhoods nowhere near such stadiums are also booming. Those cherries won’t pick themselves.

    1. advocates of taxpayer-financed stadiums say that neighborhoods near such stadiums are booming

      Is there an example of this, anywhere? Most new stadiums are not even in a “neighborhood” – they are built on the edge of town and surrounded by vast quantities of parking. Maybe some strip malls a mile away are “booming”. Even downtown stadiums tend to cater to the carriage trade so there’s little if anything being contributed by the fans driving home after the game.

  7. Are you implying there are baseball teams (or teams in any other meads market sport) that aren’t taking advantage of their host city?

  8. Every time I read about public money invested in private sports teams, I get so angry. What kind of a society takes tax money from working people and uses it to line the pockets of millionaires?

    Every craptastic feudal/aristocratic tyranny ever, that’s what kind.

  9. Let’s go Mets! Here in NY, they’re the only baseball team in town…at least this year.

    1. They are New York’s dandelions. Bloom in the spring die in the fall.

      1. If they don’t die earlier.

        As a Mets fan, I am super nervous. I have a sneaking suspicion that the only reason we made the World Series is that the baseball gods hate the cubs more.

        1. Come on, have faith. Tough matchup but we will see. I am slightly worried about D’arnaud’s ability to throw out runners, and they will run on him.

  10. The other day I saw some German fans sit out the first few minutes of a Champions League (soccer) match in England in protest of high ticket prices. My first thought was, you cheer for players who make more in a day that you do in a year – even after public finance extortion, those salaries gotta be covered somehow. Then I thought, why don’t you just watch it at home, it’s more enjoyable anyway.

  11. With thirty teams in the league (26 at the time the Mets and Royals last won a series), I wouldn’t say either of them has suffered unduly. The Pirates last won in 1979, Baltimore in 1983 and Detroit in 1984, and the Mariners and Expos/Nationals haven’t even been in a World Series.

    1. Don’t forget the Milwaukee Brewers who won the American League Pennant in 1982, the Houston Astros the National League Pennant in 2005 and the Texas Rangers the American League Pennant in 2010 and 2011.

  12. Start working at home with Google! It’s by-far the best job I’ve had. Last Wednesday I got a brand new BMW since getting a check for $6474 this – 4 weeks past. I began this 8-months ago and immediately was bringing home at least $77 per hour. I work through this link, go? to tech tab for work detail,,,,,,,

    …………………. http://www.4cyberworks.com

  13. If anyone says you need to tax the 1% and doesn’t mention subsidies like this, you know what that means. It means they are OK with rich people having money, as long as the government gives it to them. They want govenrment control, not income equality.

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