After the Mets refinanced a $250 million loan against the team, reports surfaced that banks had imposed payroll restrictions on them. When asked about it, the team declined to comment.
Last week, the Mets were able to work out a deal to refinance a $250 million loan against the team. The loan would have come due in the next few months, threatening the Wilpons' ownership of the team, but the refinancing frees the cash-strapped organization from that unpleasantness. Another interesting side-effect of the refinancing is that, according to Adam Rubin, the team is no longer restricted by cumbersome bank-imposed caps on player spending. When Rubin asked the team about that payroll cap, they had no comment.
The Mets' payroll for the 2014 season is around $87 million. That is down significantly from a high of $149 million in 2009, according to Cot's Contracts.
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According to Rubin, it's not exactly clear if the Mets' reduced payroll over the past few years was due to bank-imposed payroll caps or simply cash flow issues. Either (or both) could have been a reason for decreased spending. It's also possible that the team's fiscal restraint had nothing to do with the team's alleged financial woes.
The Mets' ownership has had a rough go of it in recent years due to their involvement in Bernie Madoff's Ponzi scheme. Reports indicate that Fred Wilpon lost anywhere from $300 to $700 million because of Madoff.
For now, the team will not have to worry about a bank-imposed payroll cap, and the repayment obligations of the loan have been deferred to seven years in the future. While that would be an issue around 2020, for the time being the team can focus on the team's current spending, rather than paying down their debts.
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