According to a new report, projections indicate that Citi Field, home of the New York Mets, will struggle to bring in revenue.
It might be a bull market for the New York Mets on the baseball field in 2018, but all signs indicate it’s going to be a bear market in the boardroom for quite a while.
A recent report by S&P Global says Citi Field’s revenue outlook does not look good for 2018 and beyond, as noted by Mike Ozanian of Forbes.
Ozanian explains that operating costs are expected to grow at a faster rate than the revenue streams brought in by Citi Field this season and beyond. That means that very little revenue is expected to be generated by Citi Field for a number of years, which doesn’t bode well for the Mets.
The S&P report projected growth rates for stadium generated profit streams such as parking, luxury suites, and concessions, through 2035, while also factoring in operating costs.
The Mets are owned and operated by Fred Wilpon and Saul Katz, who also run Sterling Equities, a real estate and capital investment firm. Currently, Forbes values the Mets at $2.1 billion.
Scott Soshnick of Bloomberg also says that minority stakes in the Mets will be available for the first time since 2012 when the Mets put four-percent stakes in the team up for sale for $20 million. That was due to the lawsuit brought against Wilpon and Katz in the Bernie Madoff scandal, a Ponzi Scheme that some claim Mets ownership benefitted from. That suit has since been settled for $162 million.
Some of those investors are now looking to sell their minority stakes in the team, though it is not said who those investors are and how many are looking to sell. Based on the team’s current value, those stakes are worth about $80 million each.
That said, the Mets did well on and off the field and in recent seasons, as the Mets twice made the postseason and Madoff scandal entered the rearview mirror. According to Ozanian, the Mets overall revenue grew 10 percent in 2016 to $167.6 million and was up 43 percent compared with 2015.
Citi Field’s operating revenue during that period grew 18 percent in 2016 and was double that of 2015. Ozanian explains that “revenue growth at Citi Field is important not only for the baseball team but because it is used to pay off the debt used to build the ballpark.”
However, projections for the stadium’s revenue growth are far grimmer for future seasons, at two percent or less in many areas while operating costs will increase by at least two percent. Stadium operations represent only a portion of the Mets overall revenue. The largest chunk by far comes from television and radio licensing, about $150 million as well as general ticket sales.
It was reported this offseason by Newsday that the Mets are looking to rekindle development plans for retail and residential space for the area around Citi Field called the Iron Triangle, which is currently home to dilapidated car repair shops.
How this affects the Mets operations remains to be seen. The Wilpons and Katz have endured scrutiny from the fan base, especially after the Madoff scandal and perceived cost-cutting measures that ensued thereafter.
However, while never popular, the owner regained a measure of credibility when the Mets made the postseason in back-to-back years and went to a World Series in 2015.
Currently, the Mets have a payroll of approximately $156 million which ranks 12th out of the 30 Major League teams in 2018. Whether this impacts Sandy Alderson’s ability to go out and procure talent is up in the air, and probably depends on where the Mets sit in the standings at the trade deadline.