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New York Times: the Wilpons were warned that Madoff wasn’t a sound investment

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We may have actual legal documents from the case against the Wilpons as early as today, with both sides giving up all pretense of the conciliatory posture that occasioned the documents being sealed in the first place. The gloves are off and the bankruptcy trustee of the Madoff estate and the Wilpons are going at each other full-bore.

And the best thing about it for all of us is that each side has its own media operation: the New York Times is clearly getting passed information and spin from either the trustee himself or from someone sympathetic to his cause. The Daily News, in contrast, is clearly getting passed information and spin from either the Wilpons, their lawyers or from someone sympathetic to their cause. Unless you have a vested interest in the Mets or the Madoff debacle — and condolences to any of you who do — this is all great fun.

Today it’s the New York Times’ turn. Stung, it would seem, by being called lying extortionists by the Wilpons, Team Trustee provides the Times with some information that, if true, undercuts the Wilpons’ assertions that they were just as duped as anyone else by Bernie Madoff.

This comes in the form of a description of a lawsuit filed against the Wilpons last year by the widow of one of their former employees who lost a ton in their Madoff-invested 401K. In it she alleges that  multiple third parties — in one case the investment bank Merrill Lynch — made clear their concerns to Wilpon and his partner Saul Katz about investing with Madoff, yet they continued to invest with Madoff anyway, putting over 90% of the company’s 401K funs in Madoff securities.  The suit also alleges that Madoff had his own money invested with Wilpon’s company, thereby creating a conflict of interest on the part of the Wilpons when it came to deciding where the 401K money should go and how to invest it.

None of which is to say that the Wilpons were actively involved or even technically complicit in Madoff’s fraud. It’s merely to say that, unlike the other duped investors like Wayne Gretzky or Stephen Spielberg or whoever, the Wilpons were under totally different duties, subject to greater information and more closely-related to Madoff than anyone else who has been dragged into this case so far.  That’s what makes them different. That’s also what has them in the mess they’re in now.

I’m sure that the Daily News will counter this somehow. I’m sure a certain commenter who has been showing up in all the Wilpon threads will either echo those talking points or even have them before the Daily News does (uncanny, that!). Which is cool. All is fair in litigation and war. And, to be honest, I like the little back and forth we’ve been having in the comments section. Keeps everyone active and thinking.

But if the counter punch does come, it had better get a tad more refined. Because the more these allegations stack up — from disparate sources, not just the trustee — the less plausible the “Wilpon was totally blindsided by Madoff” line becomes.

And I’m not buying for a second that the Wilpons are in better shape now that settlement talks have broken down, which some are arguing. That’s simply ludicrous.  That is, unless you believe that having allegations splashed all over The Paper of Record that you screwed a widow out of her $300K retirement fund due to your negligence and conflict of interest to be a good thing. And unless you like your legal fees to shoot through the roof and your potential exposure to go from large-but-finite to “who the hell knows?”

Video: Minor leaguer dives over the wall to rob a home run

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Meanwhile, in Tulsa, Zach Welz of the visiting Arkansas Travelers made a spectacular catch. It was the catch Torii Hunter tried to make on that famous David Ortiz homer in the playoffs a few years back except Welz made it.

Watch as he topples over the wall to come up with the would-be dinger off the bat of Tulsa Drillers first baseman Cody Bellinger:

MLB, MLBPA move to help baseball in Puerto Rico. After hurting baseball in Puerto Rico.

SAN JUAN, PUERTO RICO - JUNE 30:  A Puerto Rican flag flies from a building a day after the speech Puerto Rican Governor Alejandro Garcia Padilla gave regarding the government's $72 billion debt on June 30, 2015 in San Juan, Puerto Rico.  The Governor said in his speech that the people will have to sacrifice and share in the responsibilities for pulling the island out of debt.  (Photo by Joe Raedle/Getty Images)
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Yesterday Major League Baseball and the MLB Players Union announced that they will play games in Puerto Rico as part of a plan to develop and support baseball on the island. They likewise pledged $5 million for the creation of development programs in Puerto Rico and plan to stage special events there.

The press release about this made mention of Puerto Rico’s undeniably outstanding baseball tradition. What it did not mention is that, in the view of many, Major League Baseball itself harmed that tradition significantly when it decided to subject Puerto Rican players to the draft in 1990. A move that the MLBPA signed off on too, of course. Indeed, there’s a pretty strong argument that, if it were not for MLB and the MLBPA’s own acts, there would be no need to “develop and support” baseball in Puerto Rico like this at all.

An exploration of this can be read in this 2012 article from The New York Times. The article (and many, many others like it which have been written over the years) notes the sharp decline of Puerto Rico’s professional and amateur baseball leagues and observes that the once steady flow of players making their way from the island to the major leagues being reduced to a trickle.* (see update below) Why?

No one here disputes the diminished stature of baseball in Puerto Rico, and most agree on the culprit: Major League Baseball’s decision, in 1990, to include Puerto Rico, a commonwealth of the United States, in its first-year player draft. This means Puerto Rican players must wait until they have completed high school to sign a professional contract, and then they are going up against players from the United States and Canada in the draft.

Perhaps more important, major league teams have less incentive to cultivate talent in Puerto Rico because those players may end up with another team through the draft.

Sandy Alderson is quoted in that article dismissing the notion that the draft was to blame, but even his dodge is couched in basic economic incentives. He claims that, hey, there is stuff that is more financially lucrative for people to do in Puerto Rico than play baseball now. Well, sure. I’d just like him to explain how radically reducing the amount of money a kid can get from playing baseball due to taking away his right to sign with the highest bidder and by utterly killing the incentives for clubs to invest in developing players doesn’t enter into that calculus. Alderson doesn’t explain that one.

No matter what Major League Baseball might say on the record about all of this now, the fact remains that no one spent the past 26 years building academies in Puerto Rico like they have in Venezuela or the Dominican Republic. No one has an incentive to turn a 12-year-old with promise into a 16-year-old prospect like they do in those countries because there is no longer any way for a teenager to sign for life-changing money like they can elsewhere. The draft has saved Major League Baseball hundreds of millions of dollars in bonuses to Puerto Rican players over the past 26 years and it has reduced the number of prospects who may push high-salaried MLBPA members out of work, but has done tremendous damage to the baseball tradition to which Major League Baseball and the MLBPA now pay lip service.

I’m glad that MLB and the MLBPA are doing something about baseball in Puerto Rico. But $5 million over the course of four or five years, which is what this plan involves, a couple of games (if they’re even played), doesn’t even represent a fraction of the damage that the league and the union inflicted when they imposed the draft.

UPDATE: A couple of people who know a hell of a lot about this stuff have pushed back against my post on Twitter:

Marcano has written a book about the excesses and abuses involved in the development of baseball talent in Latin America. He is 100% right about this and, to the extent my writing above made it sound like I was endorsing the model in place in Venezuela and the Dominican Republic on its own terms, I want to be clear that I am not. There is a lot of bad stuff that goes on there and for every kids signing a million dollar bonus, there are hundreds who find themselves at a professional dead end or far, far worse.

That said: Major League Baseball has no problem exploiting that system in those countries and its move to impose the draft in Puerto Rico was not born of some principled stand against those excesses. It was to be a foothold for an international draft which is primarily about cost savings. It would be quite possible to have a system in place that both (a) protects kids from abuses; but (b) provides the sorts of financial incentives to make baseball a worthwhile pursuit for those with the talent to play it.

Also:

Cooper, the managing editor of Baseball America, so he knows of what he speaks, notes that from 1987-1990, before the draft was imposed, 19 Puerto Ricans made their Major League debut. From 2000-03, 23 made their debuts. From 2013-16, 22 made their debuts.

That certainly blows my above comment about “reducing the flow of players to the majors to a trickle” out of the water. That said, Major League Baseball’s move yesterday was not just about the pipeline to the majors. It’s about baseball overall in Puerto Rico. Those numbers reflecting that the top eschelon of talent is still making it to the majors are undeniable, but the Times article from 2012 talks about the erosion of amateur leagues, Puerto Rico’s diminished standing in international tournaments and the reduction in size of the Puerto Rican winter league.

So, OK, I’ll walk back my comments about just how much the imposition of the draft in 1990 damaged baseball in Puerto Rico, but I maintain that it’s hard to argue that it did not do some damage.