Baseball gave Mets a secret $ 25 million loan
Mr Selig, who has been a commissioner for nearly two decades, has extensive powers to support ailing franchise businesses or to effectively take financial control of them if, for example, he is concerned that they may go bankrupt.
Last year, when the owner of the Texas Rangers defaulted on more than half a billion dollars in loans, Mr. Selig made a total of around $ 40 million available to the club.
“The fact that the credit is coming from baseball would be a staggering event as, like the Texas Rangers, the league is essentially a lender of last resort,” said Marc Ganis, a sports industry advisor. “This would indicate that the team cannot obtain credit from normal commercial sources, which could be taken as a sign of very significant problems.”
Mr. Selig typically used Baseball’s line of credit with several banks, including Bank of America, in making these exceptional loans. It is not known what rate the Mets were charged by baseball.
Mr Selig’s decision to help the Rangers last year angered the owners of some rival teams. The Rangers eventually used some of the money to win pitcher Cliff Lee, who then led the club to their first World Series appearance.
Baseball enjoys a powerful status by engaging in fighting franchises. In the event of bankruptcy, it gets its loans paid back first? from banks and maybe even Mr. Picard, Madoff’s trustee. The banks that hold Mr. Wilpon and Mr. Katz in loans of hundreds of millions may be dismayed to learn of Mr. Selig’s intervention. However, it is possible that Mr. Wilpon should have informed the banks of the existence of the loan in November.