|Written by Michael|
Bet on the MLBEconomics affects everything, and even the Bernie Madoff Ponzi scheme has now come to affect Major League Baseball. The owners of the New York Mets have announced that they may have to sell a 25% stake in the team to help them recover from being sued for millions of dollars by people victimized by Bernie Madoff's financial fraud.
Why are the Mets being sued, though? Didn't everyone lose in the Madoff scheme that fell apart and ended up with Bernie going to jail? Apparently, according to the lawsuit against the New York baseball team, Fred and Jeff Wilpon – owners of the Mets franchise – came out as net winners in the scheme. They had been friends and investors with the Madoff organization before it was exposed as a Ponzi scheme.
On December 7, 2010, the trustee that represents victims of Bernie Madoff filed a lawsuit against Sterling Equities, which is the investment firm of the Wilpons. The trustee's filing indicates that the Wilpons made more than $48 million more than they had originally invested in the scheme. The victims are attempting to recover as much money as possible, which explains the lawsuit against the Mets' owners.
The Wilpon family is looking for other arrangements to avoid having to sell a portion of the team to a new partner, but they are also considering the partial sale. Other options being looked into include bringing in banks, insurance companies, or other strategic partners to invest in the organization without having to sell a portion of the team outright.
This should be a lesson that the people in power in the financial world, such as the Bernie Madoffs, often have close interactions with the elites of the sports world. And when there is a huge problem in one sphere of influence, the other can suffer severe consequences. Madoff and the Wilpons had been friends for years before the collapse, and even Madoff's son Mark had been friends with Jeff Wilpon when the two were growing up.
UPDATE: As we reported here, a few groups are interested in buying into the Mets franchise, including a group with Martin Luther King III and others. Donald Trump has also expressed interest in investing in the New York baseball team. But MLB.com is reporting that the Wilpon family is not interested in selling a controlling interest in the team, with a 25% stake being the most the family is willing to put on the table. King's group had reportedly been interested in getting a 50% stake in the team, but that does not seem a likely possibility at this point in time.