29
2011
Mets Deny ESPN Report On Einhorn Deal, But New Sources Corroborate It
An article by Hojo's Mojo
Yesterday, Adam Rubin of ESPN New York, reported that new Mets partner David Einhorn has an opportunity to become the majority and principal owner of the Mets in three years.
“Einhorn has agreed in principal to purchase roughly 33 percent of the team for $200 million, which will infuse cash and keep the organization solvent in the immediate future. In three years, according to the source, Einhorn has an option to up his stake to 60 percent, although principal owner Fred Wilpon and his family have an opportunity to block Einhorn from gaining that majority stake.”
The source told Adam that the Wilpons can prevent Einhorn from gaining majority control by essentially returning Einhorn’s initial $200 million investment. Einhorn will still be allowed to keep his 33 percent share of the team.
Shortly after the ESPN New York report, the Mets responded with a statement:
“While we have entered into an exclusive negotiating agreement with Mr. Einhorn, there is uninformed speculation regarding terms of a potential deal. The details of the actual negotiations are strictly confidential.”
However, different sources backed up Rubin’s account to the New York Times, the Daily News and the Wall Street Journal.
In response to the Mets statement, Adam Rubin says they’ve made misstatements before.
Meanwhile, the Mets new minority partner was in attendance last night with his family at Citi Field. “It was beautiful — absolutely fantastic,” Einhorn said of Citi Field. “All is good.”
He later met with manager Terry Collins. “He said he was real excited to be here,” Collins said.
Einhorn told reporters it was “way beyond a dream come true’’ to potentially be part of team ownership
About the Author: Rob Johnson
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|---|---|---|---|---|
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| Mets | 17 | 24 | .415 | 7.0 |
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This might be the moment we’ve all been waiting for and the end of the Wilpons. Actually, if he Wilpons lose that lawsuit, it might spell the end of them a lot sooner than 3 years.
They may even offer to sell him the rest of the team before that if their finances really go sour. At a considerable discount. Of course, he would probably just sit and wait. Unless he actually cared about the team.
Geez no wonder he made his own empire. Hes got an excellent business mind Haha
Don’t accept this article at face value. This may be just a “snippet” from a multi page small print contract. There are probably all kinds of escape clauses for the Wilpons based on a whole host of factors like attendance, team income and other factors. Einhorn probably has some escape clauses too, these layers don’t get 1000 bucks an hour or more not to protect their client. And besides : Who is THE SOURCE?
This guy is a proven successful Businessman. Do you really think when he decided to do this he doesn’t have the foresight to look ahead a few years?
This is the brightest spot in the Mets organization in years, but the blog experts know best I guess.
I just want to know the source before accepting the so called facts at face value. I can say to you and my fellow Met fans “My source tells me Jose Reyes is being traded to the Yankees.” Would you believe me, no because you would want to know my source.
Nice to see someone utter some common sense.
If true it tells you the Wilpons are living on borrowed time. Can you imagine what kind of team the Mets will field next yr or for that matter in the second half of this yr. I cant see how you can survive with there strategy (if they unload all this payroll) in NY.
I said all this before when you all wondered why would someone want to buy a minority stake in a team that was in trouble.
And at the time I pointed out that they would because it is the first step towards gaining Majority Ownership.
EVERY deal to enter into a partnership will have clauses in it to set the following.
1 – The terms of a buyback by the original owner and counter offer by the Minority
2 – The terms of reciprocal “FIRST OPTION” to buy the other’s shares
3 – The terms of any INCREASE in stake by the Minority partner including what the Majority can do to refuse it.
This bit would seem to fall under #3!
The terms here merely indicate that if Einhorn wants to up his stake to 60% after a certain amount of time that he can make an offer to the Wilpons to buy it from them. They do not have to sell it to him but if they do decide to decline the option they must buyout that option for 200Mil, meaning Einhorn essentially gets his 33% stake for whatever the interest on that 200 Million would have been had he banked or invested it.
Now to answer everyone’s conclusion to this…
It probably wasn’t Einhorns lawyer who added this clause it was more likely Wilpon’s!
Usually a Minority Owner gets the “option” to BUY control after a certain time and the Majority has the right to MEET his offer and buy him out instead by paying him his suggested price for the company shares he owns. That would be the middle ground. But the way the deal seems to be written is that the Wilpons don’t have to worry about what the offer for control is they can kill it simply by giving Einhorn back his original 200 Mil and letting him retain his 33%
SO while your all saying Einhorn is the smart one the truth is the Wilpons are the one who got away with a windfall as they Know for the cost of 200 Mil they can keep control to stop the option from kicking in.
If they had done it the way it normally is done and Einhorn could make an offer for control they would have to match he might have had the opportunity to offer them MORE than they might have been able to afford and pretty much FORCING him to sell them the team to Einhorn.
All of you who were hoping that this sale was the first step in getting rid of the Wilpons should be very disappointed by this part of the contract!
Basically it says Einhorn gets 33% of the team for whatever the interest on the 200 Mil loan would have been. But the Wilpons will still own it!
Metsmerized:
Because Adam Rubin says something is true, it makes it so?
Consider his track record of mistakes before posting something that no other news media outlet is reporting. Not even the NY York Times who go out of their way to create bad news about the Wilpons.
It was mentioned in the papers provided you get past the sports section and read the business section as well!
Here you go: http://www.nytimes.com/2011/05/29/sports/baseball/einhorn-could-become-principal-mets-owner-in-3-years.html?_r=1&partner=rss&emc=rss
Feel better?
Oh and by the way, Adam Rubin broke the news on Einhorn long before anyone else.
The details are irrelevant. What matters is that Einhorn is on the ascendant and the Wilpons are on the descendant. With the Wilpons in charge, there is no strategy for the team to get better. They will simply sell off the best players in the organization in a futile attempt to keep their heads above water. That is a failing strategy and attendance will only continue deeper into decline. The bottom line will bury the highly leveraged Wilpons deeper and deeper. Meanwhile, Einhorn will be well behaved and sit in the background biding his time until the Wilpons are at the end of their rope. Eventually, they will toss in the towel and sell out to Einhorn in entirety. If it takes 3 years for that to happen, so be it. That is the best scenario possible for Mets fans. We will transition ownership over the next 3 years and finally we will have an owner with financial strength who actually cares about the team and has a brain in his head. Finally, there is a light at the end of the tunnel. As Mets fans, we need to be patient and that means levaing Citifield empty until the ownership transition is complete. I personally will not attend another game as long as Fred is in control.
it is actually not bad timing (even with the 3 year horizon). It is very reasonable to say the team needs to go through a rebuilding/retooling process, which will involve reducing payroll by default. If Sandy does a good job at it, and beefs up the MiL feeder system,they could be loaded for bear right about the time einhorn takes it all over.
I’m fine with 3 years to rebuild in advance of the total ownership turnover. At least it is something to look forward to. We can cheer the transition on while we watch the games on the couch. I will return to Citi once Einhorn has total control. It is inevitable as the Wilpons will not be able to survive the hole they have dug for themselves.
“We can cheer the transition on while we watch the games on the couch.”
Here is the problem with your grand plan to rid yourself of Wilpon….
If you watch from your couch then Einhorn will not be interested in using his option to take the team over! Why pay to take over the 210 Million of debt that will be compiled over the next 3 years (70 Mil per year)?
You say your WILLING to sit through a rebuild just as long your sitting in your house!
SO basically what your saying is I’m NOT willing to sit through it and support the team they are trying to build!
I’m going to stay home regardless!
If they Buy FAs and don’t Rebuild I’ll Stay Home!
If the sell FAs and rebuild from within I will STAY AT HOME!
And if the Wilpons get lost or they make it to the playoffs I MIGHT go again!
If you were an owner or a business guy like Einhorn, Would you really care about THAT guy’s wants and wishes?
Sitting at home might restrict them from signing a big time FA short term, but if you STAY home then at some point they will conclude what Phillips did and say “You can’t REBUILD in NY!” Money will flow, Farm will be trade fodder and nothing more, and you are right back where you started…In your Living room!
In either case your not going to help things get better if you refuse to ever go see them. In fact by watching on TV your actually making more money for the Wilpons and therefore EXTENDING the time they can own because they make more money PERSONALLY from SNY (which is profitable) than they are on the team right now (COSTING them 70 Mil per year!)
But you do whatever you think is going to work for ya!
This is great reading. I feel I just got a primer on contract law. Learned a lot. me thinks we have a few attorneys amongst us. I don’t know if that’s good or bad. Anyway can anyone tell me what happens to SNY in all of this? thanks.
[...] Mets have reportedly denied the ESPN [...]
I haeard someone sayt his and it is true. he is making a bet that the Wipons will fail. Not the most endearing attributes for a partner in the team, but then, let us not forget Nelson Doubleday. Maybe it is tough to be in business with the Wontpons
It’s a pretty safe bet that the Wilpons will fail and Einhorn will emerge as the fittest survivor in this contest of Social Darwinism.
If true this is completely embarashing for the wilpons and shows there desperate beyond what anyone could have believed. How could you cut such a generous one sided deal. stunning IF true!
I sometimes think that if the Wontpons had tried any ther business venture than real estate, they would have been dismal failures long ago. But the real estate bubbly made them filthy rich.
The NYDN today ran a story about negotiations and disputed significant portions of Rubin’s story, including the ownership stake Einhorn would be left with if the Wilpons decided to return his initial investment when the option kicks in.
In a fluid situation like this, it’s probably wisest to refrain from speculating until the deal has been finalized, and this won’t happen for at least a couple of weeks. Rubin would have been better off waiting instead of jumping the gun and getting the story wrong like he did.
http://www.nydailynews.com/sports/baseball/mets/2011/05/28/2011-05-28_mets_investor_david_einhorn_could_up_stake_protected_in_case_of_loss_in_madoff_l.html