Instead of celebrating their deepest playoff run since 2000's Subway Series, Mets fans are understandably frustrated with ownership's diversion of baseball revenues to service Fred Wilpon's personal indebtedness on his team, stadium and television network. For those who haven't followed the sordid details, Wilpon's annual interest payments amount roughly to the $120 million the St. Louis Cardinals spend on MLB payroll.
If you're looking for the facile answer why the Mets paid less to field a team in 2015 team than they did in 2001 (adjusted for inflation), Wilpon's debt is it. Embedded media constantly regurgitate the company line. Those who value their press passes will tell you that the Mets' $110 million payroll expenditure combines with Wilpon’s $120 million in debt financing to produce a larger number than every team but the league-leading Dodgers put toward players last year.
This line of thinking is deeply flawed. Wilpon's cries of poverty are overwhelmed by the fact that the value of the team itself has grown by 120 percent in the last dozen years, to $1.35 billion. MLB’s annual revenues have exploded from $1.4 billion in 1995 to around $9.5 billion today. In other words, granting that the equity appreciation isn’t liquid, Wilpon's investment in the Mets has more than doubled. His part-ownership of MLB Advanced Media (the unit that streams video for baseball, HBO, and ESPN) is worth another $166 million. That's pure profit, as MLBAM didn't exist when Wilpon bought the team. Ratings for SNY, the Mets' regional sports network, are up 60 percent from 2014 -- and are now on par with Yankees ratings. When you read about the Diamondbacks signing Zack Greinke out of the $90 million a year they get from their new TV contract, it’s a reminder that you should add at least that amount to the Mets' annual revenues.
Wilpon quietly signed a 17-year lease to move SNY's headquarters -- oh, and those of his real estate group, Sterling Equities -- to 83,000 pristine square feet on the 49th and 50th floors of the new 4 World Trade Center. Ownership is doing just fine. But while the Red Sox supplement their young hitting talent by signing David Price and trading for Craig Kimbrel, the Dodgers flex their financial muscles to run MLB's largest payroll, and the Tigers' owner says, "I don't care about the money. I want the best players," Wilpon uses the Mets to massively buttress his personal balance sheet.
For the season just ended, the Mets spent the fourth-lowest percentage of revenues of any team -- only 38% of team revenues were directed to payroll. The Mets could have entered next season with only three players (David Wright, Curtis Granderson and Michael Cuddyer) having accumulated the seven years of service time necessary to hit free agency. Rostering so few market-value veterans would have made the team a historical anomaly. It also highlights how the Mets -- like the Diamondbacks signing Greinke -- could easily afford another $30 million on the payroll because they’re getting so much production from young, cost-controlled talent. However, General Manager Sandy Alderson merely “hopes” the team will open 2016 with a higher payroll than it did last year.
The funny thing is, not even the famous "source with direct knowledge of team financials" can deny that the Mets' division title and World Series appearance will earn the team over $50 million in added revenues. Given Alderson’s previously-expressed intention to "make a splash" in 2016, any reasonable expectation has the Mets spending far more this offseason than last, when they committed to merely $12 million in 2015 salary for Cuddyer and John Mayberry.
On December 9, the Mets traded Jon Niese for Pirates second baseman Neil Walker, then signed Asdrubal Cabrera to a two-year, $18.5M contract. Unquestionably, having Walker better aligns the roster. Niese had been shunted to the bullpen for the Mets’ playoff run after a mediocre regular season (4.13 ERA, 4.41 FIP). Between Rafael Montero returning from shoulder soreness and Zack Wheeler returning from Tommy John surgery, the Mets will have two internal candidates to fill Niese’s fifth-starter role. Niese at $9M was an unnecessary expense.
Whether Walker is a necessary expense is open to debate. Dilson Herrera and his career .304/.369/.470 minor-league line could have been given a shot to play second base, filling the shoes Daniel Murphy wore when he kicked grounders all over the World Series. Instead, trading for Walker both reveals the team’s belief that Herrera needs more development time and provides the Mets with far more certainty as they defend their pennant -- Walker has produced at least 2.4 bWAR in every season since 2011. Granting that the Walker trade is a good play for 2016, it’s both cynical and accurate to say that the Niese/Walker swap was essentially revenue-neutral, with Walker set to earn approximately $1 million more than Niese will in 2016.
Cabrera’s signing is more about accumulating depth than an indictment of Wilmer Flores’s ability to play an MLB-caliber shortstop, as both infielders have widespread reputations as defensive butchers. ESPN’s Dan Szymborski projects Cabrera and Flores to produce 2.2 and 1.7 WAR, respectively, in 2016. Because Wright seems more likely than not to spend time on the disabled list, Walker and Cabrera are both on the wrong side of 30, and Flores is far better than the replacement-level backups like Eric Campbell and Daniel Muno that filled in last year, having Flores on the bench is another reasonable hedge against uncertainty for a team that expects to contend for a playoff spot.
Flores should play more than a typical extra infielder, though. Walker is a switch-hitter who has a career 123 wRC+ against righties and a mere 83 wRC+ against lefties. Flores has mashed southpaws to the tune of a 162 wRC+. Flores can be a real asset as the short half of a platoon -- if Terry Collins is inclined to use him that way.
The Mets claimed they’re not done building next year’s team even before Cuddyer retired, freeing up a roster spot and $12.5M in salary (minus the undisclosed buyout Cuddyer will get for walking away with a year left on his contract). With Daniel Murphy and stretch-run additions Yoenis Cespedes, Tyler Clippard, Juan Uribe and Kelly Johnson off the books as free agents, and accounting for the fortuitous Cuddyer announcement, the Mets’ current payroll is estimated at ~$103 million for 25 players, one of whom (Zack Wheeler) will still be recoving from Tommy John surgery on Opening Day:
Player Salary
RF Granderson $16.0M
2B Walker $10.0M
1B Duda $6.8M
2B Wright $20.0M
LF Conforto $0.6M
C d'Arnaud $0.6M
SS A.Cabrera $9.25M
CF Lagares $2.5M
Bench Nieuwenhuis $0.6M
Bench Plawecki $0.6M
Bench Tejada $2.5M
Bench Flores $0.6M
SP Harvey $4.7M
SP deGrom $0.6M
SP Syndergaard $0.6M
SP Matz $0.6M
SP Colon $7.25M
SP Wheeler $0.6M
RP Familia (RH) $3.3M
RP Reed (RH) $5.7M
RP Blevins (LH) $4.0M
RP C.Torres (RH) $0.8M
RP Edgin (LH) $0.6M
RP Mejia (RH) $2.6M
RP Montero $0.6M
2016 payroll is now exactly what it was in 2015, when the Mets -- the New York Mets -- ranked 21st out of 30th teams in MLB. Between Alderson’s “hope” that the team will spend more than last year’s $103 million on its Opening Day roster, Cuddyer’s retirement, and a $50 million playoff bonanza, the team can easily commit to another $25 million for 2016 payroll. In other words, the Mets could have afforded Jason Heyward.
Please don’t scoff. Adding the best free-agent center fielder -- pushing Juan Lagares to the defensive-support bench spot he's best suited for -- to the team with the best starting rotation in baseball would have made the Mets a near-lock for the 2016 playoffs. Heyward received $23 million a year from the Cubs. If the Mets had dealt Jon Niese for a prospect or cheap bullpen arm instead of Walker, allowing Dilson Herrera or Wilmer Flores to start at second base, they would have saved $9 million. Cuddyer’s retirement saved another $12.5 million. Sure, that $21.5 million covers only one year of Heyward’s deal, but the Mets have merely $48 million committed for 2017 payroll and only $28.5 million committed for 2018. Again: The Mets could have afforded Jason Heyward.
Public perception, fed by Wilpon and his friendly press corps, instead ruled a Heyward signing impossible. Now, the Mets will likely sign 30-year-old Dexter Fowler or 29-year-old Gerrado Parra at a fraction of Heyward's salary. Those guys could perform adequately as the dominant side of a center field platoon with Lagares, but it's not the impact signing the Mets need -- the potential second coming of Carlos Beltran in his prime. Remember when the Mets signed the best free agent available?
In 2005, Omar Minaya inked the then-28-year-old Beltran to a 7-year, $119 million contract. The outfielder finished 9th in MLB with 32.3 bWAR for the life of his contract. Beltran sits above his former teammates David Wright (10th, 31.9) and Curtis Granderson (11th, 31.3) on that list. Indeed, for those seven years, Beltran was better than future Hall of Famers Chipper Jones (12th, 29.8), Ichiro Suzuki (14th, 29.3) and Derek Jeter (31st, 25.6). Heyward would have fit perfectly in orange and blue.
But Wilpon’s P.R. poverty campaign has been a success. With Heyward off the market, the Mets re-signed the serviceable LOOGY Jerry Blevins for one year at $4 million and innings-eater-slash-team-mascot Bartolo Colon for $7.5 million. Next, the front office will likely sign a mid-market lefty-hitting centerfielder. Wilpon will dole out barely $10-$15 million over 2015’s payroll -- anchoring the Mets in the bottom-third of MLB spending -- and tout that expenditure like he did last year when the team signed Cuddyer. Then the front office will close up shop for the winter while the likes of Justin Upton, Yoenis Cespedes and Chris Davis sign elsewhere. (And while Alderson hopefully undergoes successful cancer treatment.)
The league should censure Wilpon for redirecting team revenues to make payments on debt rather than payroll when the team has a championship-caliber core. Yet it's well established that MLB has no interest in forcing Wilpon to sell unless he goes full-McCourt and embarrasses his fellow owners. All the Mets have done in acquiring Walker and Cabrera this offseason is fill the holes left when Murphy and Uribe/Johnson left as free agents. Mets fans have to hope that the team's bumper crop of cost-controlled young players improves enough to overcome what will inevitably be a disappointing offseason of high propaganda and low spending.
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Scott D. Simon is an attorney who specializes in commercial litigation, financial restructuring, and bankruptcy. He is also Commissioner of the Westchester Hebrew Softball League, and one of the Effectively Wild Podcast’s favorite emailers. Follow Scott on Twitter at @scottdsimon.
