Mets Agree To Sell $200M Stake To Hedge Funder David Einhorn
NEW YORK (WFAN/AP) – The cash-strapped Mets have a taker.
The club agreed on Thursday to sell a $200 million minority stake of the franchise to David Einhorn, president of the private investment firm Greenlight Capital, Inc.
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“We are very excited about David joining our ownership group for several reasons,” Mets owner Fred Wilpon said in a statement. “David’s investment immediately improves the franchise’s financial position. … In partnership with David, we look forward to achieving our ultimate goal of again becoming World Series champions.”
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“Having an opportunity to become part of the Mets franchise is exciting beyond my wildest childhood dreams,” said Einhorn. “I spent my first seven years living in New Jersey and rooting for the Mets. In 1975, I even dressed in a homemade jersey as a Met for Halloween. I have been a baseball fan for my entire life and have enjoyed teaching the game as the coach of my daughter’s little league team. I look forward to partnering with the Wilpon and Katz families through the good seasons, the tough seasons and especially the championship seasons.”
The announcement would allow owners Fred and Jeff Wilpon and Saul Katz to retain control of the team. The influx of money would help pay debts and cover operating expenses.
According to WFAN’s Jon Heyman, Einhorn’s stake will be approximately 30 percent, adding the investor “is negotiating for the right to become majority owner should the Wilpons become untenable.”
Einhorn emphasized his stake was a minority one and that he wouldn’t oversee the team’s payroll or budget.
“I don’t expect to have control over any of those topics,” he said in a conference call. As for the Mets, he added: “I do expect the financial fortunes to improve over time.”
Wilpon told Sports Illustrated this week his team is “bleeding cash” and could lose up to $70 million this year.
“I’m very comfortable with the financial arrangement,” said Einhorn. “I expect to be involved with this a very long time.”
“I can’t really say I have any particular concerns,” he said.
Einhorn didn’t speculate whether he would eventually put more of his money into the Mets.
“This is the transaction,” he said. “What happens beyond that we’ll have to take care of down the line.”
The agreement between the Mets and Einhorn doesn’t include a piece of SNY, the television network owned by the Mets.
The Mets said Einhorn will be a “preferred partner” and have a “nonoperating investment” in the team. The club said the deal is subject to the “negotiation of a mutually acceptable definitive agreement” and is expected to be completed next month. Major League Baseball must give its approval.
Einhorn said he first met Fred Wilpon during this sale process. Einhorn has long known Bud Selig, having moved to the baseball commissioner’s hometown of Milwaukee when he was a boy.
Einhorn said his best childhood friend lived next door to the Selig family. When he played ball at his pal’s house, Einhorn recalled, “if we hit it very, very far it went into the Seligs’ yard.”
According to Business Insider, Einhorn even belted out a familiar refrain during an investor conference on Wednesday.
“After Einhorn finished his presentation, he began to walk off the stage,” wrote BI’s Katya Wachtel. “Then he suddenly turned around, and walked back to the microphone and said, ‘one more thing … GO METS!‘”
Recently, Forbes magazine estimated the value of the Mets had dropped 13 percent in one year to $747 million — and that was before the team’s projected losses this season. The Mets also received a reported $25 million loan from MLB in November to help cover expenses.
The current owners are facing a multimillion dollar lawsuit filed by a court trustee seeking to recover money for victims of the Madoff Ponzi scheme.
“I hope this is a good sign,” Mets manager Terry Collins said before the Mets’ road game against the Chicago Cubs. “And certainly I’m very happy that this helps Fred and makes things run smoother. I’m excited for him.”
The Mets were under .500 going into the series finale in Chicago. Collins said he hoped the latest financial development could stabilize things.
“Any time you can eliminate questions that you have nothing to do with, it always helps,” he said. “All that stuff is outside the lines and we have no control over it, we have no say in it, we have nothing to do with it.”
Wilpon has spoken out lately about his star players, criticizing David Wright, Jose Reyes and Carlos Beltran in a profile of the owner in The New Yorker.
After a loss in April to the Houston Astros dropped his club to 5-13, Wilpon disparaged the Mets’ play, called the franchise “snakebitten,” and went off on three of his top players.
—On the oft-injured Reyes, Wilpon said: “He thinks he’s going to get Carl Crawford money. He’s had everything wrong with him. He won’t get it.” Crawford signed a $142 million, seven-year deal with the Boston Red Sox last winter.
—On Beltran: “He’s 65 to 70 percent of what he was.”
—On Wright, a five-time All-Star third baseman and the face of the franchise: “A really good kid. A very good player. Not a superstar.”
The players’ reaction was low-key, with outfielder Jason Bay summing it up best.
“Obviously, there’s a lot more factors going on here than just an owner of a baseball team,” he said. “There’s a lot of things that we don’t even know about, so I can’t pretend to know and then pretend to speculate on what’s going to happen.”
Full statement from the Mets:
The New York Mets today announced that David Einhorn has been selected as the team’s preferred partner and that the Mets and Mr. Einhorn have entered into exclusive negotiations with respect to a minority, non-operating investment in the team. The $200 million personal investment by Mr. Einhorn is subject to the negotiation of a mutually acceptable definitive agreement for the transaction, as well as required approvals by Major League Baseball. The parties expect to enter into definitive agreements by late June.
“We are very excited about David joining our ownership group for several reasons,” said Fred Wilpon, Chairman & Chief Executive Officer, New York Mets. “David’s investment immediately improves the franchise’s financial position. Equally important, David’s intelligence, integrity and success in both business and civic affairs provides us with another perspective in evaluating what is best for this organization and our fans, and we welcome his input. In partnership with David, we look forward to achieving our ultimate goal of again becoming World Series champions.”
Mr. Einhorn stated, “Having an opportunity to become part of the Mets franchise is exciting beyond my wildest childhood dreams. I spent my first seven years living in New Jersey and rooting for the Mets. In 1975, I even dressed in a homemade jersey as a Met for Halloween. I have been a baseball fan for my entire life and have enjoyed teaching the game as the coach of my daughter’s little league team. I look forward to partnering with the Wilpon and Katz families through the good seasons, the tough seasons and especially the championship seasons.”
Mr. Einhorn is President of Greenlight Capital, Inc., a private investment firm which he co-founded in January 1996, and is Chairman of the Board of Greenlight Capital Re, Ltd. Along with his wife, Mr. Einhorn formed the Einhorn Family Charitable Trust, whose mission is to help people get along better. He also serves on the Board of Directors of The Michael J. Fox Foundation for Parkinson’s Research and the Robin Hood Foundation.
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