Some of you remember me
from my old CEO-radio days (VP Sales Capstar NYSE-CPR). Others knew me as a
‘workout artist’ (VP-GE Capital). Either way, my expertise wasn’t in
determining the WHIP of a pitcher in the DSL.
I worked 32 years in
the radio industry, mostly for independent companies trying to turn a profit
and, thus, sell a property they bought a few years prior. I was part of a four
person group that bought an AM/FM in Beaufort, South Carolina in 1983, for
$1.1mil worth of financed dollars. We worked the hell out if and turned a $440K
positive cash flow, which generated a $4.4mil sale in 1989. That’s how you did
it in that economy.
All that money was then
invested in properties in the Florida panhandle, the economy tanked, the
numbers were turned upside down and we had to pay off notes that we had
personally guaranteed. I crawled back to South Carolina with $18 in my checking
account, a $320,000 mortgage on a home I couldn’t afford, a year left on a
non-compete in the area, and my sense of humor.
Radio Ga Ga.
So, who hired me? It
was GE Capital, who owned the ‘bad paper’ on an AM/FM in Austin, Texas. Yes, a
bank hired me to turnaround a radio property after a bank put me out of
business.
The properties were
operating at a $2mil per year operating loss, which didn’t include an
additional half of a million dollars that was being paid to the overseer of the
stations, who, by the way, recommended me for the job to GE Capital, and
eventually was given the task of hiring me.
I was flown to
Connecticut and the suits told me to cut it to the bone, including the act of
firing the man who hired me. Did I tell you he and I went back as far as 1978
as the original team that turned WKTU-FM, in New York City, to Disco?
And I said to myself, this is the business we've chosen; I didn't ask who gave the order, because it had nothing to do with business!
Hyman Roth – “The
Godfather, Part II
Case in point: The VP.Consultant
was being paid $500,000 to ‘oversee’ an operation that had a General Manager
making $175,000 and a Sales Manager making $96,000 (this was 1990!) I replaced
all three with… me… at $130,000. The immediate savings was $641,000.
The ‘morning team’ was
a 4-person staff earning a collective $285,000. I fired them, brought in two
ex-DJs that worked for me in Florida (loyalty) and $35,000 each. Savings: $205,000.
In one day, I saved
$846,000.
I continued to reduce
the staff to one that was dominated by salespeople that produce income, rather
than creative people than spend it. The program director, music director, and promotional
director, none of which pulled an on-air shift, all were replaced with more
ex-employees of mine that worked double jobs. The newer people were equally
talented, but came from a pool of ex-workers I had that came out of smaller
markets. Austin looked like New York City to them and they were used to making
far less than the going rate in this music town.
The local newspaper did
a feature on me and called me the “hatchet from New York”. It was a proud moment
(sic).
“ (cough)…we did our job, Michael…
(cough)…
Hyman
Roth – The Godfather Part II
I changed the direction
of the music being played, we got a bump in the next survey, new revenue
tricked in, and we got the stations to a breakeven point in just over a year.
The powers to be at GE Capital sold them to Clear Channel Broadcasting for
$2mil (paper value two years prior: $11mil; total debt written off books:
$6.5mil) and I packed my bags for my next gig.
Oh yeah… one thing. I
did fly back to Connecticut and meet with my boss at GE Capital. I wanted him
to know that the stations had turned the corner and, if he gave me another
year, I could return their value to ‘around $5mil’. They said ‘thanks, but no
thanks’. The dead money was already written off the books and I was told “look,
we appreciate what you did, here’s a $50K exit bonus check to prove it, but we
want nothing to do with radio ever again.”
That’s how this world
works folks and that’s how it will come down someday hard on the owners of the
Mets, The banks, and the Board of Directors, will just have enough of this
silliness and, coupled with a willing baseball commissioner’s office, some
younger dude (like I was then) will be brought in to ‘turn it around’.
You hire me today for
the same job to be done in New York to the Mets:
1. Place the team in bankruptcy court
and let the Wilpons fight it out with the bean counters. All monies owed will
have to be disclosed and wait until you see that list. The team will go up for
bid, the Wilpons will get their fair share, and the lawyers will get richer.
The important thing here is that all monies owed on the construction of
Citi Field be paid off. I repeat… the important thing is that all monies
owed for the construction of Citi Field be paid off, or, at least, become a
private matter between the Tampon family and the people that are owed the
money.
2. Sever all ties with SNY and, once
that is completed, negotiate a new network deal open to all bidders
3. Stop replacing key employees with
interns, but reduce the number of Vice Presidents to one. A business manager
with a good software program can work with the courts. The VP would double as
the General Manager. Simple.
4. Sell David
Wright and RA Dickey to other teams for a
combination of at least six (6) prospects that have not begun their arbitration
process.
5. Offer the act of paying 100% of the
2013 salary, and services, of both Johan Santana
and Jason Bay to any team that will “throw in”
one key prospect per player that has not begun their arbitration process.
6. Sign a five year agreement with a new
AAA affiliate, preferably one in New York State, like Rochester.
7. Take your new talent pool of
prospects acquired in the trading of Wright and Dickey and assimilate them into
the best team you can put on the field. This should be a team dominated by a
very young, very talented, and very cheap rotation, and there’s a good chance
you could make the playoffs the first year.
8. Take the heat, both from the fans and
the press. The smart ones will figure out you are doing the right thing. The ‘Matt’s”
of the world will never get it.
9. Return the emphasis internally on
self-promotion. Build it around a new name, like “The Baby Bulls” or “The Fab
Five”. Change all the t-shirts and other merchandise to reflect the change. Get
the pictures of Jose Reyes, Wright, and Dickey
out of the stadium (you can put them back in 3-5 years later). Fans forget, and
they forgive winners
10. Give free agency a rest for one more
year. Take more heat. Your 2014 salary will come in the $50-55mil range and
your operation will be at a breakeven point. The Wilpons will be long gone and
you and you can turn the operation back over to the new owners that will he
headed up with a decent baseball person, like Nolan
Ryan, or a big money dude, like Mark Cuban.
Your job will be done. Fredo is dead. Let’s go Mets!
6 comments:
Do we all want the Wilpons gone? Yes. Their financial problems shouldn't be the mets problems. In San Diego and LA, the owners $ troubles meant a team sale. Here, the Wilpons just will not give up. They will get any and all opportunities to survive this. At this point, it's pointless to Even expect any kind of sustained competivness until at least 2014. By then, the pitching should get them to .500 baseball alone. Hopefully they'll have the cash to spend once Santana and bay are long gone. Somehow though, I doubt it.
Well, I will speculate more in my next segment which could lead to a quicker sale
A faster way out for the Wilpons would be for them to refinance the debt on the team and other Met-related assets and then have the economy tank thereby washing away the equity they gained by virtue of the Dodgers transaction..
I agree that the Wilpons can no longer operate a mlb franchise with the aggressiveness that a NY market demands. They should sell. For years they threw a lot of money at the problem with the most mediocre results. Those results were partly due to poor baseball decisions (draft choices, Castillo, Ollie, Bay, etc.) made by (I think) not them, but people they chose to make those decisions, and partly just back luck (injuries…and Brian Cole is still high on my “what if” list)). Sure they are clueless as baseball analysts and that along with expensive & underachieving performance qualifies them as losers but not necessarily satanic owners.
When their bank collapsed they chose another route and were handed a guy (SA) who could supposedly operate that type of machine. IMO the jury is still out on whether that strategy can EVER work, but even if it can’t the proof isn’t in the 2012 bullpen fiasco. We’ll have to wait and see whether Harvey, Wheeler, Tapia, Nimmo, etc. can make significant ML impacts. If these guys develop post-Wilpon someone else will get the credit for “finally revamping the farm” I suppose.
Any sales timetable would still leave decisions on Wright & Dickey within the Wilpon Regime era I think. So it might very well be that extending W & D is a sign that they want to maximize the value of their assets for sale. Conversely, dumping their greatest value assets for prospects might be a sign they intend to ride the horse you describe. Eventually they will HAVE to acquire outside talent and bare the price, and while the Dodger solution (Ramirez, Victorino, Blanton) was neither the time nor the value/price ratio for the Mets in 2012. I don’t think they will be able to.
Will:
You are correct; however, that would mean all the debt was "on the books".
We'll speculate more in part two.
Hobie:
Actually, eventually this team can't simply rely on draft picks. Only five of their top ten prospects came via the draft. That's either great Latin scouts, piss pour stateside counterparts, or somewhere in the middle.
This is New York City.
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