Say, wanna get even more depressed about the state of your favorite baseball team? Scrape the ice off your keyboard and visit the Times. There you can read all about how brilliant Fred Wilpon long ago decided Bernie Madoff was and how the Mets put a lot their money — which on some level had been our money before we exchanged it for a ticket or a cable subscription or a piece of licensed apparel or merchandise — in Madoff’s hands. Madoff, before his Ponzi scheme became known, was a sure thing in Wilpon’s eyes, so sure that when there was a matter of deferred compensation, the Mets took the funds they’d eventually have to pay out and placed it in Madoff’s care. From there, it would grow, because that Bernie Madoff, he was brilliant.
According to the Times, “the role Mr. Madoff played in the financial life of the ball club” was “substantial”.
When the Mets negotiated their larger contracts with star players — complex deals with signing bonuses and performance incentives — they sometimes adopted the strategy of placing deferred money owed the players with Mr. Madoff’s investment firm. They would have to pay the player, but the owners of the club would be able to make money for themselves in the meantime. There never seemed to be much doubt about that, according to several people with knowledge of the arrangements.
“Bernie was part of the business plan for the Mets,” a former employee of the club said.
Makes you feel warm and fuzzy all over, doesn’t it? Just like those assurances that whatever Wilpon had going on with Madoff, it had nothing to do with the Mets — they were totally separate.
Being a hardcore Mets fan, meanwhile, you no doubt focused like a laser on the phrase “deferred compensation” and thought of one person in particular. Yup, he is indeed, reportedly, attached to this, too:
Bobby Bonilla was among the players who had their deferred money put with Mr. Madoff, one former employee said.
God only knows how whatever the hell is going on in the sordid Madpon affair affects anybody and everybody who is remotely touched by it, but I’m going to assume Bobby Bonilla’s deferred payments will be fine. Of course they’ll be. Bobby Bonilla always makes out fine where taking Met money is concerned. As the former third baseman/right fielder/albatross told the Wall Street Journal last summer when the specter of his impending neverending payoff arose, “Hey, a blind squirrel can find an acorn.”
Stupendous. Bernie Madoff robbed people blind, Fred Wilpon’s stewardship of our beloved franchise careens toward an iceberg and we are gently reminded that from the nexus of their close relationship, Bobby Bonilla will be collecting $1.19 million worth of acorns per year starting this July and continuing — as every schoolchild knows — through 2035.
This arrangement was crafted so the Mets didn’t have to immediately pay Bonilla the $5.9 million they owed him for 2000…and, lest we forget, Bonilla was on the Mets for a second golden term (after having been such a prize from 1992 to 1995) because they couldn’t bring themselves to simply eat the final year of Mel Rojas’s anvil of a contract, which would have cost them not quite $4.6 million in 1999.
To unhappily recap, they swapped one theoretically untenable season of the dreadful Rojas (from a deal the Mets inherited when they traded for him, Turk Wendell and Brian McRae in 1997) to the Dodgers for two untenable seasons of the washed-up Bonilla. It was a classic case of bad contract for bad contract, though it didn’t require hindsight to divine the bad contract the Mets were accepting was sizably worse than the one they were jettisoning. The Mets committed $11.8 million to Bonilla in order to save themselves from paying Rojas $4.6 million.
Where was brilliant Bernie Madoff’s financial acumen then?
Bobby Bonilla lacked both productivity and common human decency in 1999, eating up roster space, his manager’s patience and, presumably, a disproportionate share of the clubhouse spread. No way could Bobby V be asked to indulge Bobby Bo in 2000. But just making the mistake go away would have been too unclever for the Wilpon administration. That’s where the deferred compensation came in, that’s where almost $30 million will go out over the next 25 years, and now we learn that somehow Bernie Madoff was a part of this scheme, too.
Oh, and Oliver Perez and Luis Castillo are still under contract and expected to don Mets uniforms in a couple of weeks. Maybe they would have been granted the dazzling deferment package Bonilla has made famous had Madoff magic still been available to the Mets. Alas, that door was closed when Madoff’s massive malfeasance came to light the winter Perez was re-signed for $36 million over three years, which coincided with the universal realization that the $18.75 million Castillo was owed for 2009, 2010 and 2011 was not what you’d call a savvy investment.
Now and then I’ve read thoughtful explanations of how Bobby Bonilla being paid by the Mets for a quarter-century, long after he played his last hand of hearts at Turner Field, wasn’t such a bad financial deal for the Mets (which the Times article indicates in the first passage quoted above). And in the context of the 1999-2000 offseason, given the Mets’ reflexively hesitant approach to adding payroll during that era, putting off Bonilla’s payments way into the future — no matter how astronomical they would appear to the untrained eye — gave Steve Phillips perceived short-term flexibility. Issuing seven-figure checks to Bobby Bonilla clear into his seventies is an obvious punchline, but there was, I’ve been assured, a scintilla of logic to it.
But geez, y’know? Bobby Bonilla adds to his riches via a check cut by the Mets every year for 25 years; Bernard Madoff was reportedly the conduit to execute this sludgiest of slush funds; and none of this imbues us with anything resembling confidence regarding the future of this operation for however long Fred Wilpon is running it.
Makes the ice storm outside look pleasant by comparison.
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Just goes to show how clueless and inept Fred Wilpon is. And how illogically loyal he is to the wrong people. He has a serious problem with judgment and poor decision making. From this Madoff business to keeping Omar and Jerry around so long, to refusing to pay over slot for the best draft picks, etc, etc,. He routinely makes the wrong choices. I hate to wish wrong on anybody, but i seriously hope he ends up having to sell the team or at least most of it. As diehard Mets fans we’ve been through too much with this clown steering the ship.
I have no financial expertise, but reading that NYT article one thing struck me: If Wilpon knew he was involved with fraud why would he continue to set up Madoff accounts with his name all over it? The man didn’t get where he is being that stupid. Naive, a poor judge of character maybe, as Grizzley pointed out.
My sense of Wilpon is that he’s a decent fellow, probably a hard business man, but not a sheister.
Every year there’s another mess to clean up, it seems
You got that right. Man became loaded by working his ass off!
I think all things considered, it was probably better having Madoff on your team in 1999 than Bonilla. At least Madoff could steal.
I’m still trying to figue out what.It. All. MEANS. Apparently…
http://mets360.com/?p=5970
Hi Greg,
No matter what I think of the Wilpons, I cannot just accuse the two of having knowledge of Madoff’s behavior, however, looking at it from an investor’s point of view, I think they got caught up too much on the profits coming in and were personally too close to Madoff to recognize that when something seems too good to be true, it usually isn’t.
But I can’t feel sorry for them. With the Wilpons obviously catering to the wealthier Met fans and being totally indifferent to the real ones, they are now getting a dose of their own medicine by knowing how it feels to be screwed.
Ahh, who cares? Really? Is it news to anybody that Wilpon doesn’t run a baseball team well? Even with talent, this team is unable to sustain it, thus strong teams in the 80s, 2000′s and 2006 wither and decay long before they should. Does he have lots of cash? Yes. Does he hire well? No, never has. Did Madoff fool lots of people? Yes. If he had been on the level, as I believe Wilpon believed, getting involved with Madoff’s funds was a savvy and outstanding move, one that shows real business acumen (as does his real estate empire). But will we ever win with him or his idiot son at the helm? Only by accident (like in 2006).
Don’t focus on the owner. Focus on the team which has some good pitching, a decent offense, and cosmic due date to be healthy for a season. Hey, you never know.
Greg, I am hoping against hope that eventually what will emerge is an owner, or owners, who get it. A man, or woman (sans Mettle ideas), who won’t shy away from putting some orange and blue (our blue, not the Dodgers’ shade) in the park and the team.
Let’s face it, we would need a historian if not a statistician to recount all of the idiotic decisions by the Wilpon-led Mets organization – including the initial construction of Ebbetts II.
For the Mets fan, it’s our lot in life it seems: to be constantly wishing and hoping for the next best thing; be it a player, manager, GM, or owner. But a Mets fan we shall stay – long after the Wilpons have gone on to their next thing to break.
Funny, the first name I thought of when I read “deferred compensations” was Mo Vaughn. Bobby Bo was a train wreck, but at least he was sort of productive for a few seasons. Okay, not really, but on the Mets sliding scale… But he was a svelte superstar compared to that ridiculous oaf Vaughn. I’m pretty sure he’s still drawing a Mets paycheck too. I suppose I could have looked this up before posting this, but I just didn’t have (wait for it) the stomach for it.
Apparently there was a WSJ article stating that the Mets didn’t just put deferred compensation through Madoff investments, they put everything through it, including 401K funds for their employees. If that’s actually true, then this is no joke; they are very possibly looking at jail time.
And actually, the fact that Wilpon Sr. is a billionaire probably points to him knowing more about Madoff’s dealings, not less. You don’t pile up that kind of fortune from practically nothing without knowing exactly what you’re doing; that doesn’t mean not making any mistakes, but as reported, this is way too big to be merely a mistake. It’s hard to believe he would just trust the guy with practically every frigging cent he has without checking him out first.
He probably just thought that if you’re rich enough, you can get away with anything. Not an unreasonable assumption to make in this day and age, but perhaps there are some exceptions that prove the rule.
I don’t equate the two – Madoff came from the world of paper transactions, Wilpon manages hard, real assets – real estate property, stadiums, management of people, equipment, tv studios. No one really knew what Madoff did – Hell, the SEC was fooled for 18 years, it’s no stretch to think Wilpon could get fooled as well. And Wilpon has major limits in his judgement – look at every person he’s ever hired for the Mets. That doesn’t mean he’s criminal.
I can only hope this gets worse so he goes away for good and we can watch Jeff Wilpon’s exciting career as an Orange Julius store manager takes off.
I found it heartening the Mets are finally fighting back. This Picard is simply grasping at a deep-pocketed target. Without proof showing the Wilpons knew for a fact Madoff was running a con, he has invented a theory that holds them liable because they “should have known”. Lawyers truly are scum.
I have no sympathy for anyone who was taken by Madoff. Particularly not the so-called small investors who lost their life’s savings. If you are that big a schmuck that you put your entire nest egg in the hands of one entity – and that entity isn’t even a major brokerage house like Goldman, but simply some guy, then you deserve to lose your shirt.
I hear that. A con plays well into the hands of those who are a) greedy, b)lazy, unwilling to do research, c) willing to believe what they want to hear. The ones taken in the con wanted to believe they were getting an exclusive opportunity not made available to most people and paid the price for it.
I agree. These deferred compensation packages actually seem to support claims of ignorance by the Wilpons. It’s no big deal to promise Bobby Bonilla $1.2 million per year through 2035 if you’re expecting your massive investments with your buddy’s hedge fund to be earning 10% in compounded interest year after year after year without fail.
Owe an unproductive player $5.9 million? “We’ll just throw that money into our genius buddy’s magical hedge fund in 2000 and *poof* that will turn into about $15.3 million in assets by the time we’ve got to start paying up in 10 years. Bernie’s always getting those 10% returns. We can just pay Bonilla with the interest and laugh our way to the bank!” they’re thinking.
Looking at it now, it’s hard to believe that anyone with tons of money wasn’t skeptical of Madoff. Booms and crashes come and go, yet he’s always generating these unbelievably reliable returns. Never spectacular, always pretty high. But it’s even tougher to believe that the Wilpons would have planned these deferred compensation deals, and invested player 401k money with Madoff, if they knew he was operating a Ponzi scheme. That would make absolutely no sense. They just thought he was a regular Warren Buffett. So did the SEC.
Come on Greg………you guys are great writers; I even have my wife reading your posts even though she thinks I am wasting time reading blogs about the Mets. Stick to writing about what you know; Baseball!
Right on Frank!
The New York Times is becoming another rag like the Post. They get away with helping to smear The Wilpons. Lupica’s column was right on. The Wilpons have made some mistakes as owners, but I for one like Citi Field (Upper Deck Season Ticket Holder). When ownership locked up Reyes and Wright to deals before they had to it was brilliant. When they lured a superstar Beltran to NY by showing him the $$ everyone was excited. When ownership gave the green light to extend Johan’s contract and trade for him we all said WOW! When Omar traded for Putz and signed FRod, everyone was singing the praises (Even SI had them winning the World Series). News flash…It ain’t so easy to win a WS. Just ask the Cubs, Dodgers, and Redsox. You need LUCK,HEALTH, and at least two to three big time SP’s at the front of the rotation. You can get on the Wilpons and their GM’s for that. Oh yeah…one more thing..How has our lost stud Kazmir been doing?