12.30.12

Standard & Poor Finds A New Scapegoat For The Mets’ $$$ Woes : NYC Has Reached Baseball Capacity

Posted in Baseball, The Marketplace at 6:37 pm by

(the first thought that comes to mind is, “you sell flowers by the side of the highway”)

It’s almost January 1 and there’s only one team in Major League Baseball yet to sign a single free agent this offseason. No prizes if you already guess that franchise is the New York Mets, who despite having unloaded R.A. Dickey and Jason Bay this winter, seem in no hurry to bolster a 2013 roster with holes aplenty. Whether the club is methodically building for the future or barely hanging on by the skin of ownership’s teeth, is a matter of opinion, though it seems there’s one impartial body leaning towards the latter point of view, as the New York Times’ Ken Belson explains.

On Dec. 21, Standard & Poor’s lowered its rating on the almost $700 million in bonds issued to finance Citi Field, and it said the outlook for them remains negative. The bonds are now rated BB, from BB+. That’s two notches below investment grade, junk bonds in the parlance of the debt market.

Jodi Hecht, an analyst at Standard & Poor’s, cited “cash flow volatility,” noting that “a large portion” of the money pledged to pay off the bonds is “game-day revenue,” which includes sales of club-seat tickets, concessions and parking. How the Mets play will affect the prospects for this revenue, she said. Standard & Poor’s “may lower the rating if cash flows continue to decline due to a combination of poor team performance, slow economic recovery, overcapacity in the New York region,” she added.

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