David Einhorn '91 buying minority stake in the Mets

I'm sure many of you know David Einhorn of hedge fund Greenlight Capital is a Cornell grad. He gained plenty of exposure for shorting Lehman Brothers in 2007. He's spending $200 million for a minority stake in the Mets.

That minority stake is apparently 49%. If you can buy half of the Mets for $200M, the finances of that organization are in the absolute crapper. That isn't to say that the second half of the pie will also be $200M - there would obviously be a control premium - but this has to be a prelude to Einhorn getting the rest of the team.

ugarte
That minority stake is apparently 49%. If you can buy half of the Mets for $200M, the finances of that organization are in the absolute crapper. That isn't to say that the second half of the pie will also be $200M - there would obviously be a control premium - but this has to be a prelude to Einhorn getting the rest of the team.

Most credible sources I have read (e.g. ESPN.com, WSJ) have said that the stake is less than 49%. WSJ today also said the investment values the team at $1B.

Latest news from ESPN is that of Einhorn's $200 million will get him around 33 percent of the team. In three years he would have the option to increase his stake to 60 percent although the Wilpons can block that by returning his $200 million - but allow him to keep his original 33 percent. The deal does not include cable channel SNY. $25 million will be used to pay back the team's loan from Major League Baseball and $75 million to retire bank debt. The rest will be used for operating expenses, primarily team payroll. Numbers on the team's debt vary but the most quoted number I have seen is $427 million.

nyc94
Latest news from ESPN is that of Einhorn's $200 million will get him around 33 percent of the team. In three years he would have the option to increase his stake to 60 percent although the Wilpons can block that by returning his $200 million - but allow him to keep his original 33 percent. The deal does not include cable channel SNY. $25 million will be used to pay back the team's loan from Major League Baseball and $75 million to retire bank debt. The rest will be used for operating expenses, primarily team payroll. Numbers on the team's debt vary but the most quoted number I have seen is $427 million.

So essentially Einhorn is shorting not the Mets, but the Wilpons. A pretty safe bet.

Trotsky

nyc94
Latest news from ESPN is that of Einhorn's $200 million will get him around 33 percent of the team. In three years he would have the option to increase his stake to 60 percent although the Wilpons can block that by returning his $200 million - but allow him to keep his original 33 percent. The deal does not include cable channel SNY. $25 million will be used to pay back the team's loan from Major League Baseball and $75 million to retire bank debt. The rest will be used for operating expenses, primarily team payroll. Numbers on the team's debt vary but the most quoted number I have seen is $427 million.

So essentially Einhorn is shorting not the Mets, but the Wilpons. A pretty safe bet.

That's pretty much what I figured his bet was going to be. When Picard and the court drop the hammer on the Wilpon's and claw back a substantial part of what they grifted in the Madoff scam Einhorn will probably end up with 100% of the team AND SNY for pennies on the dollar.

And with control of the Mets he will be known not just as one more schmata billionaire, but The Owner of the New York Mets. No matter what you do on Wall Street or in Silicon Valley, owning a big league ballclub defines your life. As the SI story this past week on the Wilpons made clear about how the Wilpons will be remembered and want to be remembered. The Wilpons also noted how owning the club helped their business. Until they met Bernie Madoff.

ugarte

Trotsky

nyc94
Latest news from ESPN is that of Einhorn's $200 million will get him around 33 percent of the team. In three years he would have the option to increase his stake to 60 percent although the Wilpons can block that by returning his $200 million - but allow him to keep his original 33 percent. The deal does not include cable channel SNY. $25 million will be used to pay back the team's loan from Major League Baseball and $75 million to retire bank debt. The rest will be used for operating expenses, primarily team payroll. Numbers on the team's debt vary but the most quoted number I have seen is $427 million.

So essentially Einhorn is shorting not the Mets, but the Wilpons. A pretty safe bet.

That's pretty much what I figured his bet was going to be. When Picard and the court drop the hammer on the Wilpon's and claw back a substantial part of what they grifted in the Madoff scam Einhorn will probably end up with 100% of the team AND SNY for pennies on the dollar.

Well, their creditors are probably going to get SNY.

nyc94
In three years he would have the option to increase his stake to 60 percent although the Wilpons can block that by returning his $200 million - but allow him to keep his original 33 percent.

ESPN is reporting that if the Wilpon's don't return his $200 million in three years the price for Einhorn to raise his stake to 60 percent is $1. If they do return his money he only gets to keep one sixth of the team.

Wait hold on.... so he either gets 1/6 of the team in exchange for making the 'pons an interest-free loan, or majority ownership for $200M? Sounds like a pretty damn good deal.

Josh '99
Wait hold on.... so he either gets 1/6 of the team in exchange for making the 'pons an interest-free loan, or majority ownership for $200M? Sounds like a pretty damn good deal.

That's how I understand it.

edit: ESPN was citing Forbes. Forbes says Einhorn would retain his 33 percent if the Wilpons returned his $200 million, not 1/6th as ESPN stated. And the Mets are denying the $1 part of the story.

The deal between Einhorn and the Mets is off, with the main sticking point being Einhorn's potential path to majority control of the team.

Maybe the Wilpons will simply go bankrupt and the Mets can be sold at auction to a group of investors who will use the Red Sox as their model for how to build a profitable business from a successful sports franchise. As much as I hate the Sox, their business acumen is unimpeachable.

Kyle Rose
Maybe the Wilpons will simply go bankrupt and the Mets can be sold at auction to a group of investors who will use the Red Sox as their model for how to build a profitable business from a successful sports franchise. As much as I hate the Sox, their business acumen is unimpeachable.

The recent sale of the Rangers sets a precedent for that happening. Of course, you won't really see an auction. Bud and friends will get to hand pick the new owners if the pattern holds. If they pick well then the Mets may get back to contending.

Speaking as a Yankees fan it's just not worth hating or eve n disliking the Mets now. I miss that. Last time they were good they were managed by one of my all time favorite players (Willie Randolph) so it was hard to hold any animus.