Another day, another crippling blow to Wall Street: Bernard Madoff, former NASDAQ chairman and founder of major investment advisory firm Madoff Securities, was arrested yesterday and charged with fraud, after losing up to $50 billion in a Ponzi scheme. (Not a Fonzie scheme: that involves betting someone you can jump a shark on your water skis.)
But this scandal could have a deep impact in the world of sports. CNBC is reporting that through their real estate investment firm Sterling Equities, Mets owners Fred Wilpon and Saul Katz may have had as much as $300 million invested with Madoff. That’s about eight Frankie Rodriguez contracts. And it doesn’t look like they’ll be getting much, if any, of that money back.
I wonder if this means that Frank and Jamie McCourt actually have more money than another set of owners now?
Basically, Madoff’s firm was losing money on its investments, but paid its investors “earnings” with money that basically didn’t exist (such as directly from investments from new investors). The whole thing was a zero sum game, sinking the firm further and further into debt.
It all comes off like a bad sequel to Boiler Room, with the Mets’ owners one of the countless suckers that Ben Affleck is able to squeeze every last cent from. And if you think that Wilpon and Katz are getting any of their money back, just read this quote:
On Wednesday, Madoff told two senior employees that he was “finished,” that he had “absolutely nothing,” that “it’s all just one big lie,” and that it was “basically, a giant Ponzi scheme,” federal prosecutors said in their statement.
No matter who you are, $300 million is going to hurt. I think it’s safe to assume that we can remove the Mets from any further bidding for Manny Ramirez, Mark Teixeira or any other high-priced free agents. And K-Rod might want to ask for his money upfront, just to be safe.