Summary: OTL tackles Mets/Madoff
February, 13, 2011
By Adam Rubin | ESPNNewYork.com
Featuring an interview by former Daily News Mets beat writer T.J. Quinn with Larry King, ESPN’s Outside the Lines tackled the Fred Wilpon-Saul Katz-Bernie Madoff-Irving Picard issue Sunday morning.
Here’s a summary:
• The piece opened with King, who was asked when he first heard the name Bernie Madoff. “I heard it from Fred,” King said.
King revealed he invested about seven years ago with Madoff, relying upon Wilpon’s recommendation. The retired CNN talk-show host recovered the $2.3 million he invested over that period, he said.
“Never heard a bad word about Bernie Madoff,” King said. “In fact, my wife said to me one day, ‘Why don’t we put everything with him?’”
Asked for Fred Wilpon’s reaction when the Mets’ principal owner learned of Madoff’s arrest, King said: “He was devastated.”
King assigns no blame to the Wilpons, and used the analogy of employing a baseball player when there are whispers that slugger is using performance-enhancing drugs.
“What do you do? Take him off the team?” King asked. “No. Tell him to stop hitting homers? No … if you’re Freddy, and this guy is being productive, and you’re exchanging money, and friends are exchanging money, and they’re doing well. So someone might say, ‘You ought to watch out.’ If someone said that to me, I don’t know what I would have done.”
Wasn’t 18 percent annual returns on average too good to be true?
“I don’t buy that -- ‘known or should have known,’” King said. “A lot of people could tell you things. And sometimes if you’ve had a relationship with him, you’re not going to believe them. … See, I think Freddy is getting an enormous bad rap, because Freddy would never, ever do a dishonest thing, or screw a friend. He would be the last person in the world. … I think Freddy will not go down without swinging, and he won’t go down. I don’t think he’ll go down. The tragedy would be if he ever lost that team. I think that would be the tragedy of a lifetime. I pray it never happens.”
Of course, King is not making a legal argument. And the allegation the Wilpons were on notice, and that they chose not to check it out even if they did not believe those warnings, could make them liable for the principal they invested in addition to $300 million in alleged false profits.
• OTL then interviewed Michael Cramer, former president of the Texas Rangers, an organization that went through the bankruptcy process.
Cramer expressed skepticism the Wilpons would be successful selling 20 to 25 percent of the team without yielding control.
“You could say that you’re an owner of the Mets, but that’s about all you can say,” said Cramer, now the director of the University of Texas program in sports and media. “… You will have nothing whatsoever to say about the operation of the team. You may have some access. You might have a nice parking spot. You might even be able to get some extra tickets if they get to the World Series.”
• A pair of undisputed Madoff victims -- Judith Welling and DeWitt Baker -- next were interviewed. They say they lost half of their $1.5 million investment. They maintained any profits the Wilpons made weren’t really profits at all.
“They are far more sophisticated investors than we would be based on their own background and investments and ownership of properties, etc.,” Welling said.
Said Baker: “If you look at it morally, the money you took was somebody else’s.”
“It was our money,” Welling said.
• Finally, ESPN’s Buster Olney weighed in on the future.
“Certainly Fred Wilpon is going to get every benefit of the doubt from Major League Baseball in terms of giving him an opportunity to work through this because he’s a respected owner,” Olney said. “He’s been a long-time ally of Bud Selig.
"But the big question within Major League Baseball circles is how steep is this debt? How much money can the Mets lose before Fred Wilpon might actually be forced to sell the team … A number of executives are saying the idea of selling 20 to 25 percent of the Mets while not giving up control to another owner is almost unworkable because, of course, if someone invests with the team and then Fred Wilpon put out a cash call to his investors as he dealt with his financial problems, who knows where that would end? That’s why, in the end, the question of how much the Wilpons are going to have to give up in this suit is a major factor in whether or not he maintains ownership of the Mets.”
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