Pitch Black? Mets’ SNY Network Might Be Victim Of Madoff Settlement
On Monday, a trustee, representing hundreds of victims of Ponzi scheme artist, Bernard Madoff, was set to go to trial, in which he would seek upwards of $300 million from the New York Mets, a trial which would no doubt serve as a disconcerting sideshow to a 2012 season that many sports prognosticators project will be a futile one well before the first pitch of the regular season is even thrown.
Just before jury selection was set to begin for the trial, Mets chairman/CEO Fred Wilpon and team president Saul Katz have reached a settlement with the trustee, Irving Picard, for $162 million, or just over half of Picard’s original asking price.
Still saddled by the franchise’s involvement with Madoff, the Mets will likely find it difficult to invest in talent, and could be confined to the basement of the National League East division – if not the league itself – possibly until their current player that bears the highest price tag, injury-plagued pitcher Johan Santana, turns 40.
Which makes you wonder about SportsNet New York, or SNY. A network which the Mets own roughly two-thirds of (and in return, SNY owns 16% of the Mets). A network that itself may have been financed by Madoff: Katz tried passing off a $54 million payment in 2004 from Madoff’s wife, Ruth, as an investment toward the initial capital of SNY, which went on the air exactly six years ago on Friday, March 16; though last year, a general counsel for the Mets said that payment was deemed unnecessary and returned within 24 hours.
One part of the settlement agreement is that the Mets aren’t obligated to make any payments until 2015. Which should give them a good deal of time to raise some of the assets. But with a team projected to be a cellar dweller long into the next President term, their ability to do so will be limited. Earlier this year, it was reported that revenues at the Mets’ ballpark, CitiField, had dropped significantly since the stadium opened its doors three years ago, with sales for premium seats cut literally in half, from $99.3 million in 2009 to $50.6 million last year.
It’s bad enough thinking about how many empty seats, premium or otherwise, there will be at CitiField in the years ahead. Imagine how many eyeballs will be chomping at the bit to rush to SNY to watch the team.
At the midseason point last year, the regional cable network’s average ratings suffered a 29% decrease from that same point in 2010, with their market share among the worst in Major League Baseball.
Buoyed by its existence in the largest market, the Mets’ average of 175,000 homes placed that number in the top 5 in terms of home viewership. But that can only take you so far. It’s possible that with the underperforming play that everybody expects, this team can fall out of this category’s upper echelon.
This would be a convenient time to remind you that the Mets’ current radio home, sports radio pioneer WFAN, which celebrates its 25th anniversary this summer, is set to start what is speculated to be the final year of a thirty-year relationship with the team, dating back to WFAN’s predecessor, country station WHN. As the New York Daily News’ Bob Raissman accurately predicted in February 2011, WFAN sister station WCBS-AM, the current radio home of the New York Yankees, re-upped with the Pinstripes for only one year, which would coincide with the expiration of the current WFAN/Mets deal. All signs point to WFAN obtaining Yankees radio rights in 2013, and kicking the Mets to the curb.
Even though a settlement means the Mets are absolved the responsibility of $141 million (perhaps more) to Madoff’s victims, it’s clear that the foreseeable fortunes of this franchise are bleak. Which is why, if ticket sales and television ratings fall even further, the Mets may have no choice but to gut SNY.
Just as the Mets are hard-pressed to hold onto popular players due to their financial predicament, SNY’s talent roster may also be forced to part ways with the network, as well. Everyone from the famed Mets field reported Kevin Burkhardt to studio host Adam Schein (also heard on SiriusXM’s NFL Radio) might be affected. (By the way, how’s that deal with Tiki Barber working for them?)
It may very well be in the realm of possibility that SNY could air more infomercials than the ones currently running in the late-night and mid-morning hours. Hard to fathom, given the fare currently offered by the network.
But if you’re a cash-strapped team that needs to come up with mime figures, to make an omelet, you have to break a few eggs – or, in the Mets’ case, breaking loose with notable talent.
Indefatigueable New York Times columnist Richard Sandomir, who has been on this Mets/Madoff saga like white on rice (he was at the courthouse and immediately tweeted that there would be a settlement no sooner than it was announced) respectfully disagreed with my view. “I don’t see any effect,” he told me via Twitter. “It operates separately from the Mets, with healthy subscriber fees that pay the freight.” (Remember that the Mets owns 65% of SNY.)
That’s another thing to keep in mind: Cable subscribers, like you and me, end up footing the bill for many networks, such as ESPN. These are based on agreements between the networks and the respective cable systems. So ratings may not have much of an impact. But it should be interesting to see what happens when Cablevision’s current carriage deal with SNY expires – keep in mind that about a quarter of the network is owned by rival Time Warner Cable… and we all remember how both sides were at an impasse for close to two months on Time Warner coming to terms on a new carriage agreement with MSG Network, owned by Cablevision. In fact, SNY’s first week on the air was denied to Cablevision subscribers, as a result of a carriage tiff. If the Mets perform poorly for the duration of SNY’s current Cablevision contract, I don’t think even Jeremy Lin would be able to save the day in the SNY/Cablevision squabble that is bound to take place.
Bottom line: Mets baseball over the next several years may not be television worth watching on SNY.
But if the Mets are not successful in raising enough funds to put toward the Madoff settlement, the situation behind the scenes at SNY will be.