MLB Ownership Intervention: Some Examples and Lessons

The revelations about Mets ownership have trickled down like water torture, a little bit each day, slow, constant, and painful. If the latest reports are to be believed, The Wilpons have maxed out their credit with MLB and can borrow no more from Bud Selig's war chest, and unnamed team executives worry if their paychecks will bounce. With each passing day, it seems more and more likely that the Wilpons will have to sell the team, and not just the minority stake they want to, but the whole shebang.

There's another possibility, slim though it may be: direct MLB intervention. This still seems highly doubtful, considering Fred Wilpon's close relationship with Selig and the fact that the Mets are a franchise in the biggest media market in the country, and therefore should have no shortage of suitors if a total sale becomes necessary. But if you take a peek at two recent examples of MLB stepping in when the going got rough, you will find some disturbing parallels between those cases and that of the Mets.

The first involved the Montreal Expos, who were once a viable franchise (no, really) before the 1994 strike and the loss of stars like Larry Walker, Moises Alou, and Pedro Martinez whittled away their fanbase's patience and enthusiasm--and significant revenue along with it. The team was also saddled with an onerous debt on Olympic Stadium, which was ill suited for the game.

In 1999, art dealer Jeff Loria bought the team and made things worse with bad personnel moves (spending way too much on middling free agents like Hideki Irabu) and worse business moves (failing to secure English language broadcast rights). He also failed to secure public funding for a new ballpark in downtown Montreal, and rumblings that the team would be moved began in earnest. As early as Loria's first home opener in the owner's box, Expos fans showed up in earnest to try to prove that they could will the team to say, as you can read here.

Unfortunately, that enthusiam was not to last, and bad baseball caused attendance to dwindle to microscopic levels (though probably higher than that of Loria's current team). Following the 2001 season, MLB's owners voted to contract two teams, and les Expos were one of the franchises on the chopping block. Later that winter when John Henry, owner of the Marlins (another team rumored to be contracted), purchased the Red Sox. Henry then sold the Florida franchise to Loria, who pulled a Jim Irsay and took his entire front office staff with him to Miami, leaving Montreal with no infrastructure whatsoever.

MLB purchased the Expos for pennies on the dollar and would probably have proceeded with contraction, were it not for an injunction that required the Twins (also due to be contracted) to play the 2002 season at the Metrodome. Not wanting an odd number of teams, MLB was forced to take over operations of the Montreal franchise, pleasing no one, least of all Expos fans.

Under MLB's rulership, the Montreal franchise was hamstrung financially and subject to interference and penny pinching from the commissioner's office. In 2002, they played 22 "home games" in San Juan, Puerto Rico. In the summer of 2003, the Expos were in the wild card hunt but were not allowed to get the same September call ups all other teams did, as MLB deemed the move too expensive. Their days north of the border were clearly numbered, and the team was sold and moved to Washington after the 2004 season.

In the case of the Texas Rangers, MLB did not have to take this extreme step, though they came perilously close. Owner Tom Hicks stretched himself too thin trying to corner the market in several sports at once, purchasing the Dallas Stars, the English Premier League's Liverpool club, the Rangers' AA affiliate, and a rodeo. This, plus several ginormous contracts (Alex Rodriguez's the most ginormous of all), drove the team to financial ruin.

In 2009, Hicks announced he would consider selling a minority interest in the team. Around this time, it was revealed the Rangers had defaulted on a loan of over half a billion dollars, and that they sought additional loans from MLB to cover operating expenses. Hicks quickly changed his tune and declared himself open to selling the franchise outright. A group headed by Chuck Greenberg and Nolan Ryan emerged as the primary suitors, Hicks agreed to sell to them, and MLB approved the deal. That seemed to be the end of that.

Except that Hicks' creditors objected to the deal, saying the sale would not cover his enormous debts. A stalemate ensued, and the commissioner's office threatened to take over team operations if a deal could not be worked out. The sale's delay forced the Rangers to declare bankruptcy and be sold at auction, where the Greenberg/Ryan group prevailed after all, staving off a bid by Mark Cuban to join baseball.

These situations are not exactly like the Mets'. There were many factors in the downfall of the Expos and the Rangers, whereas the Mets' woes seem almost entirely due to one: The Madoff Mess. (Though given the way things have happened so far, give a week and we'll find out some more horrible things, I'm sure.) I can't imagine Selig bullying the Wilpons the way he did with Hicks, or squeezing the life out of them as he did with Montreal.

Still, the example of both teams are instructive to observers of the Mets. The Expos were slowly killed by MLB's moves, but they were first wounded by the team's willingness to let its best homegrown stars leave. (To be fair to Loria, this started before him under the ownership of Claude Brochu.) I don't think the Mets' financial woes will keep any fans from coming to games, but if a lack of cash keeps them from resigning Jose Reyes or picking up anyone else to take his place, that definitely will.

In the case of the Rangers, there are a disturbing number of parallels, from Hicks' insistence on only selling a minority stake to borrowing money from MLB. I can also envision a scenario where Irving Picard and the Madoff trustees could hold up a potential sale of the team because it would not yield enough to cover the damages they sought from the Wilpons. And if Picard didn't, any of the Mets' creditors surely would.

If you want a silver lining, it's that both teams have recovered from these dark times in their histories, even if the Expos had to stop being bilingual in order to do so. Can the Mets avoid these fates? Possibly. But in order to do so, they'll need to find a way to continue to compete and hold fan interest without endangering their long term financial outlook. Ball's in your court, Mr. Alderson.

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