Thursday, May 26, 2011
Updated: May 27, 9:01 AM ET
Mets in talks to sell minority share
ESPN.com news services
NEW YORK -- The cash-strapped owners of the New York Mets have agreed to sell a minority share of the team to hedge fund manager David Einhorn for $200 million.
The move, announced Thursday, 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.
A definitive agreement is expected by late June, according to the team.
The sale will be for less than 49 percent of the team and will not include a stake in SNY, the television network owned by the Mets, sources close to the deal tell ESPN's Karl Ravech.
Fred Wilpon told Sports Illustrated this week the team is "bleeding cash" and could lose up to $70 million this year. He also told the magazine the club might slash payroll next year. The Mets received a loan from Major League Baseball in November to help cover expenses.
In addition, Wilpon, who became ensnared in the Bernie Madoff Ponzi scheme, is facing a multimillion-dollar lawsuit filed by a court trustee seeking to recover money for Madoff's other victims.
Enter Einhorn, the 42-year-old president of private investment firm Greenlight Capital, Inc., who spent the first seven years of his childhood in New Jersey and as a young boy once dressed in a homemade Mets jersey for Halloween.
"It's been a very smooth process for the last several months," Einhorn said of the state of negotiations during a news conference Thursday. "We're very far along as understanding the business operations and prospects."
Asked if he anticipated buying a larger stake in the team down the road, Einhorn said: "What I'm interested right now is the opportunity in front of me right now. We don't even have a completed transaction yet."
Once that transaction is completed, Einhorn said, he plans to retain his share of the Mets for years to come.
"I have no real plans to sell this investment. I expect to hold it for a long, long time," he said. "The financial rewards, they'll take care of themselves over time."
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. Major League Baseball must give its approval.
"(Einhorn's) investment immediately improves the franchise's financial position," Wilpon said in a statement released by the Mets. "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."
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.
A Cornell graduate, Einhorn is the author of "Fooling Some Of The People All Of The Time," a book about his battle with private investing firm Allied Capital. He serves on the boards of Hillel, The Michael J. Fox Foundation for Parkinson's Research and the Robin Hood Foundation. He finished 18th at the World Series of Poker in 2006 and donated his winnings of $659,730 to the Fox foundation.
Einhorn made financial news Wednesday when he told an investment conference audience that Microsoft Corp.'s board of directors should replace CEO Steve Ballmer. According to SEC filings, Greenlight owns nearly 9.1 million shares of the software giant.
But when it comes to the Mets, Einhorn said he would let the Wilpons handle the team's day-to-day management.
"The Wilpons remain in control of the team," he said. "I'm just looking forward to the overall experience this investment will lead to."
Information from ESPNNewYork.com's Adam Rubin and The Associated Press was used in this report.