Who's setting the Mets' payroll? Bank of America or Saul Katz and Fred Wilpon? Photographer: Peter Foley/Bloomberg
Who's setting the Mets' payroll? Bank of America or Saul Katz and Fred Wilpon? Photographer: Peter Foley/Bloomberg

Word came down last week that the New York Mets were on the verge of a breakthrough in their financial woes, with the refinancing of a $250 million loan from Bank of America. The New York Post's Josh Kosman reported that the loan, which demanded an enormous principal payment this spring, will be restructured by March and will not require a cash paydown from owners Fred Wilpon and Saul Katz. The loan will not come due for seven more years.

That's definitely good news for a stubborn ownership whose mishandling of team finances put the Mets on the brink of bankruptcy after sinking millions into Bernard Madoff's Ponzi scheme. But one nugget from the Post's report, which has been mostly overlooked, should be particularly troubling to baseball fans. Kosman writes: "There is a bit of a silver-lining for critics of Wilpon and Katz: There are no payroll limits written into the re-worked loan, a source added. The existing loan restricts the team from greatly expanding payroll."

Let me get this straight: The Mets -- a team playing in the country's largest television market, notorious for its inflated payrolls, in a sport that, unlike others, prides itself on the absence of a salary cap -- have been operating under such a cap imposed by a third party? And Major League Baseball let this happen? Why hasn't there been a public uproar against this?

Sure, on a practical level, the Mets probably wouldn't have spent very much more on their payroll even without that stipulation in their loan. A team hundreds of millions of dollars in the hole shouldn't be blowing money on huge contracts (though that hasn't stopped them in the past). Still, the Mets have clearly been emboldened to make bigger moves this winter than in offseasons past, spending $87 million on free agents like Curtis Granderson, Bartolo Colon and Chris Young, and will increase their payroll from $85 million to more than $90 million for 2014. That's still a far cry from the almost $143 million the team spent in 2011, which was slashed significantly the next year, when MLB and Bank of America gave the team a total of $65 million in bridge loans.

Bank of America had previous experience financing a franchise, granting Crane Capital CEO Jim Crane a $220 million loan in 2011 for his $700 million purchase of the Houston Astros -- a deal that contained no such restrictions on team payroll.

A loan directly influencing payroll sets a bad precedent in a sport that has battled the invisible hand of moneyed interests in the past. At its core, the argument against allowing a third party to dictate personnel decisions is not unlike the ban against players gambling, instituted to prevent the dollar from similarly influencing play on the field.

What's more, the revelation of the Mets' loan terms further complicates the salary cap issue, a persistent cause of tension between management and players. Owners, backed by Commissioner Bud Selig, have long called for a salary cap to even the playing field between big-city juggernauts and small-market teams, with the MLB Players Association resisting what it says would pose an unfair threat to players' fair market value as a labor force. The compromise has been revenue sharing, imposing a luxury tax on teams like the New York Yankees with huge payrolls to subsidize teams like the Kansas City Royals, with the understanding that that money would be put back into the roster.

But the Mets aren't a small-market team, and their financial issues are the fault of its ownership. This is a team that, if run properly, would be able to take full advantage of a system that favors its position in the country's biggest television market, as their crosstown rivals do, and in theory field an expensive, productive squad that would reap postseason rewards. Instead, the Mets are limited by their own bad decisions, and the bank that had to save them not long after receiving its own bailout.

(Kavitha A. Davidson is a Bloomberg View columnist who writes about sports. Follow her on Twitter at @kavithadavidson.)

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Kavitha A. Davidson at kdavidson19@bloomberg.net.

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Stacey Shick at sshick@bloomberg.net.