The outlook for the New York Mets' stadium debt has turned negative, Moody's Investors Service said on Thursday after the trustee recovering money for victims of Bernard Madoff sued the baseball team's owners to recover as much as $1 billion.
The legal fight could hurt the team's performance, which could cause fewer people to attend its games and cut the amount of money the team has to repay the stadium debt, Moody's said.
While the ultimate outcome of the litigation and the timeframe for final resolution are unknown at the present time, the negative outlook acknowledges the close connection between the health and performance of the Mets baseball team and the long-term credit quality of the stadium project, Moody's said.
The team owners, including Chairman Fred Wilpon, have said they will try to sell a minority stake in the team after being accused by the court-appointed trustee of turning a blind eye to Madoff's fraud.
The stadium debt for the Queens ballpark, called Citi Field, was issued by the New York City Industrial Development Authority, which is not involved in the Madoff litigation.
A Moody's spokesman said the revised outlook affects $695 million of debt, which is rated Ba1, Moody's highest junk grade.
The Mets have had two straight losing seasons, although the team has one of the highest payrolls in Major League Baseball. Attendance fell 19 percent last year at Citi Field in the ballpark's second year of existence.
(Reporting by Joan Gralla; Additional reporting by Jonathan Stempel; Editing by Leslie Adler and Dan Grebler)