The Blackhawks, The Mets and Their Finances

July 31, 2010

On Friday, the Chicago Tribune published a very fascinating article about the Chicago Blackhawks. Despite breaking all sorts of attendance records for selling out every home game, and winning the Stanley Cup this past season, they are more in the red than black when it comes to their finances.

The Blackhawks have a very storied history. They are one of the Original Six NHL teams and have been family owned by the Wirtz’s since the early 1950’s. The team was under Bill Wirtz’s control for 41 years and was known to be very stubborn and cheap. Home games were not shown on TV, unless picked up by national broadcasters. He felt broadcasting the game was unfair to season-ticket holders. Isn’t that one of the most crazy things you’ve heard? He never went out and signed guys to big deals. Any good, quality player they had was lost in a trade or not re-signed.

The Blackhawks are just one entity in the overall Wirtz Corp. Other holdings include Wirtz Beverage Co., a liquor distributor; an insurance business; prime real estate and more.

It wasn’t till Old Man Wirtz died and his son Rocky took over that people learned how in the red the team was. The first thing Rocky did was get the games on TV. He hired quality people to the front office, spent money on free agents and signed some home grown guys to longer deals. The team now sells out every home game and there is a wait list to become a season ticket holder. They have made the playoffs the last two seasons, winning the Stanley Cup this past season. And yet, their finances are in the red. Luckily the Blackhawks and Rocky can dig into some of those other reserves to help meet all their expenses.

As soon I started to read the Tribune article, I immediately thought of the Mets and how they may or may not have been affected by the Bernard Madoff investment scandal.

The Mets are owned by Fred and Jeff Wilpon. Fred Wilpon is also the Co-Founder and Chairman of Sterling Equities, one of many companies that is reported to have lost millions of dollars in the Madoff scandal. While I think that the actual Mets finances were likely unaffected, the team does remain somewhat connected to Sterling Equities and the Madoff fallout.

As the MLB trade deadline approaches, there’s a lot of talk about the Mets making a move and adding to their already high payroll. If it does turn out that the Mets are struggling financially (as we have long wondered), the Madoff problems would make it difficult to dig into the Sterling reserves to complete a possible deal (either now or in the offseason). And now, with a reported lawsuit against Fred Wilpon, I wonder even more how much his various companies are going to be affected.

I’m not sure why I hadn’t thought about this Mets/Sterling Equities relationship long before the Tribune’s article, but what do you think?

3 Responses to “The Blackhawks, The Mets and Their Finances”

  1. I think this is a very good question and the connections are spot-on. Like you, I believe Sterling Equities will be impacted by the whole Madoff lawsuit fallouts (the Wilpons, for better or worse, have made it publicly known that they actually withdrew their money at a profit), but I think the Mets are actually “profitable” as a sports team can be. Like the ‘Hawks, many sports teams operate in the red, and it takes a lot for them to operate in positives. In fact, someone had done an analysis on the Yanks a few years ago and even with the addition of YES and the new stadium, they have a lot of streams of revenue but are not exactly operating in the green.

    I believe Sterling is in trouble. However, the Wilpons seem hell bent for better or worse on holding onto the Mets, and won’t even relinquish like a percentage of it to keep the company afloat.

    I also like that you are not posting like all this alarmist stuff that actually is not terrible (i.e. when papers report on an off-day that the Mets have junk bonds…well butter my butt and call me a biscuit! Many companies have junk bonds…it’s difficult in this economy to have an investment grade rating…just sayin)

  2. We were talking at work the other day how very few teams really operate with a profit. Just something we, as fans, don’t often think about. As I said before, not sure how I hadn’t thought about this before.

    Of course, we’ll never really know what’s up with the Mets, because I don’t think the Wilpon’s are even being true to themselves about the finances.

  3. I’d say it also helps when your other businesses are actually companies that provide goods instead of a finical service.

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