S&P Downgrades NY Mets' Bonds

Will the bond degrade
mean curtains for Mr. Met? 

The New York Metropolitan Baseball Club, Inc., popularly known as the New York Mets, hit the dirt after receiving a chin-high fastball from Standard & Poor's. The rating agency knocked the Mets' bond rating down to the second level of "junk" status, Wall Street's equivalent of the Mendoza Line. The Mets' bonds are no longer "investment grade," which automatically prohibits certain pension funds, mutual funds, and other institutional buyers from purchasing these securities.

According to a bloomberg.com report, S&P raised concerns about the Mets' ability to meet certain revenue generation thresholds. It didn't take a wizard in financial modeling to realize empty seats and a lackluster squad equalled the proverbial downward slope for performance expectations. Considering the strength of the American corporate bond market, the downgrade is a disturbing event, one which Standard and Poor's and the Mets tried to bury during a slow, year-end holiday news period.

Overarching the ratings determination is the unspoken, but well known impact the Madoff scandal had on the Mets. The prevailing sentiment is that Madoff "made off" with much of the Mets' money. While the Mets' ownership has skated on this issue, the practical result has been the resemblance of the National League's #1 market to a small time operation. That is an unbecoming outcome, from which little good is likely to emerge.