Pitch Black? Mets' SNY Network Might Be Victim Of Madoff Settlement

The New York Mets, who had been involved with the infamous Ponzi scheme of Bernie Madoff, reached a settlement with a Madoff trustee, preventing the case from going to trial. The Mets own 65% in the regional cable network SNY, and failure to reap enough funds for the Madoff settlement could lead to big changes at the network. Pictured, ironically, is how SNY broke the news of the settlement on their air.

On Monday, a trustee, representing hundreds of victims of Ponzi scheme artist, Bernard Madoff, was set to go to trial, in which he would seek upwards of $300 million from the New York Mets, a trial which would no doubt serve as a disconcerting sideshow to a 2012 season that many sports prognosticators project will be a futile one well before the first pitch of the regular season is even thrown.

Just before jury selection was set to begin for the trial, Mets chairman/CEO Fred Wilpon and team president Saul Katz have reached a settlement with the trustee, Irving Picard, for $162 million, or just over half of Picard’s original asking price.

Still saddled by the franchise’s involvement with Madoff, the Mets will likely find it difficult to invest in talent, and could be confined to the basement of the National League East division – if not the league itself – possibly until their current player that bears the highest price tag, injury-plagued pitcher Johan Santana, turns 40.

Which makes you wonder about SportsNet New York, or SNY. A network which the Mets own roughly two-thirds of (and in return, SNY owns 16% of the Mets). A network that itself may have been financed by Madoff: Katz tried passing off a $54 million payment in 2004 from Madoff’s wife, Ruth, as an investment toward the initial capital of SNY, which went on the air exactly six years ago on Friday, March 16; though last year, a general counsel for the Mets said that payment was deemed unnecessary and returned within 24 hours.

One part of the settlement agreement is that the Mets aren’t obligated to make any payments until 2015. Which should give them a good deal of time to raise some of the assets. But with a team projected to be a cellar dweller long into the next President term, their ability to do so will be limited. Earlier this year, it was reported that revenues at the Mets’ ballpark, CitiField, had dropped significantly since the stadium opened its doors three years ago, with sales for premium seats cut literally in half, from $99.3 million in 2009 to $50.6 million last year.

It’s bad enough thinking about how many empty seats, premium or otherwise, there will be at CitiField in the years ahead. Imagine how many eyeballs will be chomping at the bit to rush to SNY to watch the team.

At the midseason point last year, the regional cable network’s average ratings suffered a 29% decrease from that same point in 2010, with their market share among the worst in Major League Baseball.

Buoyed by its existence in the largest market, the Mets’ average of 175,000 homes placed that number in the top 5 in terms of home viewership. But that can only take you so far. It’s possible that with the underperforming play that everybody expects, this team can fall out of this category’s upper echelon.

This would be a convenient time to remind you that the Mets’ current radio home, sports radio pioneer WFAN, which celebrates its 25th anniversary this summer, is set to start what is speculated to be the final year of a thirty-year relationship with the team, dating back to WFAN’s predecessor, country station WHN. As the New York Daily News’ Bob Raissman accurately predicted in February 2011, WFAN sister station WCBS-AM, the current radio home of the New York Yankees, re-upped with the Pinstripes for only one year, which would coincide with the expiration of the current WFAN/Mets deal. All signs point to WFAN obtaining Yankees radio rights in 2013, and kicking the Mets to the curb.

In fact, the future of the Mets is so dire, their longtime Albany affiliate dropped them in favor of the Red Sox. (In fairness, they recently added a new affiliate in the area last week.)

Even though a settlement means the Mets are absolved the responsibility of $141 million (perhaps more) to Madoff’s victims, it’s clear that the foreseeable fortunes of this franchise are bleak. Which is why, if ticket sales and television ratings fall even further, the Mets may have no choice but to gut SNY.

Just as the Mets are hard-pressed to hold onto popular players due to their financial predicament, SNY’s talent roster may also be forced to part ways with the network, as well. Everyone from the famed Mets field reported Kevin Burkhardt to studio host Adam Schein (also heard on SiriusXM’s NFL Radio) might be affected. (By the way, how’s that deal with Tiki Barber working for them?)

It may very well be in the realm of possibility that SNY could air more infomercials than the ones currently running in the late-night and mid-morning hours. Hard to fathom, given the fare currently offered by the network.

But if you’re a cash-strapped team that needs to come up with mime figures, to make an omelet, you have to break a few eggs – or, in the Mets’ case, breaking loose with notable talent.

Indefatigueable New York Times columnist Richard Sandomir, who has been on this Mets/Madoff saga like white on rice (he was at the courthouse and immediately tweeted that there would be a settlement no sooner than it was announced) respectfully disagreed with my view. “I don’t see any effect,” he told me via Twitter. “It operates separately from the Mets, with healthy subscriber fees that pay the freight.” (Remember that the Mets owns 65% of SNY.)

That’s another thing to keep in mind: Cable subscribers, like you and me, end up footing the bill for many networks, such as ESPN. These are based on agreements between the networks and the respective cable systems. So ratings may not have much of an impact. But it should be interesting to see what happens when Cablevision’s current carriage deal with SNY expires – keep in mind that about a quarter of the network is owned by rival Time Warner Cable… and we all remember how both sides were at an impasse for close to two months on Time Warner coming to terms on a new carriage agreement with MSG Network, owned by Cablevision. In fact, SNY’s first week on the air was denied to Cablevision subscribers, as a result of a carriage tiff. If the Mets perform poorly for the duration of SNY’s current Cablevision contract, I don’t think even Jeremy Lin would be able to save the day in the SNY/Cablevision squabble that is bound to take place.

Bottom line: Mets baseball over the next several years may not be television worth watching on SNY.

But if the Mets are not successful in raising enough funds to put toward the Madoff settlement, the situation behind the scenes at SNY will be.

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To Faze WFAN, ESPN Radio Needs An FM Signal (And, Yes, The Mets, Too)

2012 is a make-or-break year for ESPN Radio (whose personalities include Mike Golic, pictured) to acquire an FM signal for their New York radio station, if they really want to wish WFAN an unhappy 25th anniversary.

July 1 of this year will mark the 25th anniversary of WFAN in New York. At the time, it was the first 24-hours-a-day sports radio station in the country. Today, in a radio landscape where radio companies like CBS Radio – WFAN’s eventual owner in the 1990’s – are putting more and more of their stock in stations with an all-sports format, specifically on the FM band, WFAN remains virtually in a class by itself in New York. That’s because no other area radio station has really given them a run for their money in the format. There was AM 620 in the late 1990’s, which carried the national sports network One-On-One Sports, which later became Sporting News Radio (and is now known as Yahoo! Sports Radio); these days, AM 620 consists largely of brokered ethnic programming, so don’t let the call letters they have had for over ten years – WSNR – fool you.

Enter AM 1050, which would ditch a format, ironically, consisting largely of brokered ethnic programming, in favor of “1050 ESPN Radio” on September 2, 2001. (Yes, roughly a week before 9/11.) The bigger footnote of irony here is that AM 1050 was exactly where WFAN had initially launched its sports format on July 1, 1987. Fifteen months later, WFAN would vacate the 1050 signal in favor of the stronger AM 660, which was being sold to Emmis by General Electric, which was selling its radio division known as NBC Radio – including the legendary 66 WNBC. (Here’s a refresher on how to say the call letters properly, featuring former WNBC alumnus Howard Stern.) AM 1050 would obtain the WEPN calls in 2003; the station had been operated by ESPN parent company ABC/Disney under a local marketing agreement with the station’s format owner during the first two years of its sports format.

The ratings battle between WFAN and WEPN was anything but, especially in the beginning. In the most recent PPM’s for the New York market, WFAN has been outrating WEPN by about a 2-to-1 margin – though WEPN should be given credit for coming a long way from the sub-1.0 numbers they started out with. Over the years, WFAN has not only been buoyed by a better signal than WEPN, but by more attractive live sports programming deals, as well. New York Mets radio broadcasts on WFAN was grandfathered from their previous existence as country WHN. Also, they assumed Knicks and Rangers radio play-by-play with the sale of WNBC in 1987. WFAN has also been the radio home of the New York football Giants for years. WEPN’s first major sports play-by-play package was with New York Islanders hockey. Over the years, they have established themselves as the radio home of the New York Jets (previously, CBS Radio owned the rights, and games were carried on the now-defunct “92.3 K-Rock” – which had the aforementioned Stern in morning drive for years – and shared with WFAN, as well). In the mid-2000’s, they also acquired Knicks and Rangers radio rights from its rival (it helps when they play their home games in the same building where your studio is located); WFAN filled the voids by obtaining radio broadcasts of the New Jersey Nets (soon to be Brooklyn Nets) and the New Jersey Devils. (For what it’s worth, these days, the flagship station of the Islanders games is the radio station operated by Hofstra University – yes, an NHL franchise’s play-by-play on college radio… how the mighty have fallen.) And a major part of this equation could be ending this year, and it involves the area sports team that has yet to be mentioned in this paragraph, but is possibly more successful than all of the other area sports franchises combined: the New York Yankees. Their games are currently heard on WCBS-AM – sister station of WFAN. Upon the Yankees’ contract expiring at the end of 2011, both parties extended their broadcast contract – but only for one more year. Coincidentally, 2012 is the final year of the Mets’ current radio deal with WFAN. In recent years, the Mets have not only been a perennial losing franchise, having made the postseason only once in the last decade, but they have even experienced historic late-season collapses which resulted in missing the playoffs. Then, there is that whole Madoff thing. Given all that, it is being heavily speculated that WFAN will simply let their contract with the Mets expire, opting for a new contract with the Yankees, effective 2013. The early favorite to land the Mets radio rights at that point, naturally, would be the other sports radio station in New York, WEPN. Or, when you consider the team’s financial situation, perhaps they can always sign a deal with Hofstra’s radio station… or, for that matter, AM 620. The baseball play-by-play scene on local radio will be one to watch this fall.

Until then, there will be something else worth keeping tabs on if you follow sports radio in New York: whether or not WEPN will migrate from the AM band at 1050, to FM. For the second time in as many years, a major FM signal is up for sale. Last summer, Emmis – you may recall, they had sold WFAN just two decades ago – in an attempt to avoid possible bankruptcy, had put 101.9 FM in New York for sale, as well as two FM stations in Chicago. ESPN was said to be in the running for the trio of stations (the ESPN Radio station in Chicago is also on the AM dial), but they were ultimately sold to Merlin Media, an upstart group led by radio veteran Randy Michaels. That was the first radio station sale in Market No. 1 since 2009, when classical station WQXR was sold by The New York Times Company (following GE’s footsteps of getting out of the radio business back in 1988) as part of a three-way deal with Univision, which obtained the old radio frequency of WQXR, and new York Public Radio, which continues to operate WQXR’s content on Univision’s previous radio dial position.

This year, there may be one – possibly two – FM signals up for grabs. Family Stations, owner of 94.7 FM, recently filed to change their license status from non-commercial to commercial; such a move is usually a precursor to the station being sold. In 2011, Family Stations sold two FM stations in two top-ten radio markets, Philadelphia and Washington, D.C., which were sold, respectively, to Merlin Media and CBS Radio; the end result in these sales will be the creation of new 24-hour all-news FM stations in their respective markets – for Merlin Media, that would mean three of its four stations would be operating an all-news format. (The President of Family Stations is Harold E. Camping, who gained notoriety for predicting two “raptures” in 2011 that never happened; he has since suffered a stroke.) The other New York City radio station that could be on the market is 107.5 FM, which has been owned by Inner City Broadcasting for over 35 years. (Side note: In the early 1950’s, 107.5 first signed on the air as WEVD – which were the same call letters that AM 1050 possessed up until 2003.) Recently, though, Inner City has been overwhelmed with financial problems (though they didn’t do business with Bernie Madoff like the Mets have). In fact, this week, there will be a hearing related to the auction of a subsidiary of Inner City. Of Inner City Broadcasting’s radio stations, only their San Francisco station may be put up for sale. But with enough time – and enough cash – you might see Inner City change their tune and agree to sell their FM station in New York. I could easily see a scenario where ESPN, should they not end up getting 94.7 FM from Family Stations, make an aggressive pitch to Inner City for 107.5. ESPN has seen major opportunities pass them by to obtain an FM signal in New York; they’ll be determined not to lose out again – especially if they plan to become the new radio home of the Mets come 2013.

Sports talk has flourished on the FM band in recent years. CBS Radio had dethroned WEEI in Boston not long after launching “98.5 FM The Sports Hub”, and seeks similar success in markets such as Pittsburgh and Cleveland. But what has been a blessing for CBS in these markets has been a curse in Philadelphia: CBS’ WIP has seen their audience erode with the emergence of “97.5 FM The Fanatic” and hopes to stop the bleeding with a simulcast of WIP launched on 94.1 FM last fall. It should be noted that, of the four ESPN owned-and-operated radio stations – all in top-five radio markets with the exception of San Francisco – only their Dallas property is on the FM dial. Usually, that station is competitive with the other two competing sports stations in the Metroplex – both of which also have presences on FM. (Though KESN, the radio home of the Texas Rangers, saw their ratings cut in half with the end of the baseball season.) True, both all-sports radio stations in New York are on the AM dial, with WFAN being the 50,000-watt blowtorch. In fact, it was the directional signal issues on AM 1050 (that still exist today; WEPN simulcasts on an AM station in central New Jersey, and for awhile, also simulcast on an FM station in Eastern Long Island) that partly led to Emmis pulling the trigger on a deal to bring WFAN to the stronger signal on AM 660 two dozen years ago. And WEPN has improved their performance, not only in the radio rights department, but with their on-air talent, as well: Yankees television play-by-play man Michael Kay, who had been with the station practically since its inception, now has popular New York Daily News columnist Mike Lupica as a lead-in. But if ESPN Radio really wants to up the ante against “the sports leader” – as WFAN promotes itself on the air – they’ll pursue an FM signal for WEPN, then perhaps follow that up with a deal with the Mets. Even as unappealing as the Mets have been since the start of the 21st century, an allegiance with the team could translate into instant revenue for WEPN – especially if they’re broadcasting on FM.

Like the broadcast rights to a baseball franchise, the opportunities to own an FM station are few and far between, especially in New York. The difference is, it might appear as if the Mets might be giving their radio rights away – especially if their performance in 2012 is execrable.

But right now, there’s two strikes (sales) against ESPN Radio in New York, and the bases could be loaded.

A perfect opportunity to hit a home run – and perhaps spoil WFAN’s 25th anniversary.

(You are also encouraged to read another perspective of a possible 94.7 FM sale by RadioInsight.com‘s Lance Venta. He projects that the three area regional sports networks could also make a play for the frequency. Those three networks, incidentally, all have WFAN personalities either appearing on or have their shows simulcast on them: MSG (“Boomer & Carton”), SNY/Sportsnet New York (Chris Carlin et al.), and YES Network (“Mike’d Up”/Mike Francesa). And let’s not forget the slim possibility of CBS, even though they’re maxed out on local ownership properties – 3 AM stations, 3 FM stations and 2 TV stations with the recent acquisition of a station on Long Island – somehow gunning for 94.7 FM, perhaps, for a simulcast of WFAN, or one of their two all-news stations which are also on the AM dial.)