Big News! (update: Mets Minority Stake For Sale)

[MFS62]

John Cougar Lunchbucket wrote: McCann is kinda interesting: A social worker and part-time florist who went on to do that whole 800 flowers thing. Real NYer, also a Met fan I assume.

When I was with NCR, we helped him build his first call center and start the 1-800-FLOWERS number. I later did some process improvement consulting for them. Jim attended those meetings and is a really nice guy. His brother, who really runs finance and operations, is a tough businessman.

Since their headquarters is on Long Island, I'm guessing they're long time Mets fans, but in the many times we met, we never talked baseball.

Later

[metirish]

Ceetar wrote: Here he is, the new man according to tweets http://en.m.wikipedia.org/wiki/David_Einhorn_(hedge_fund_manager) And apparently he called for the CEO of Microsoft to step down. I like it.

i'd be more impressed if he called for Fred, Jeff and Saul to step aside.

[TransMonk]

[metirish]

Here's an even younger looking picture of him


Mets investor David Einhorn as Dave Kingman

per Metsblog

[Guest LeiterWagnerFasterStrongr]

TransMonk wrote:

Finished top-20 in the WSOP main No Limit Hold' Em event when he played.

Supposedly savvy hedge-fund dude AND not a guy you want at your weekly poker night... so what do the Wilpons have on him, that he'd pay in 200M for a silent partnership?

[TransMonk]

I haven't seen anything that denotes what percentage of ownership he is at. Does anyone know?

[Guest John Cougar Lunchbucket]

Sounds like close to a done deal, his name is out there and he's got exclusivity.

[Ceetar]

TransMonk wrote: I haven't seen anything that denotes what percentage of ownership he is at. Does anyone know?

Nope. I saw $200 million, and I saw 'valued at 1B' which would suggest 20%, but I don't think that's it either. Official press release says less than 49%.

[Edgy MD]

I don't know why so cynical. If I had $200,000,001, I'd spend $200,000,000 on the Mets.

I'm sure he wouldn't be silent.

[Ceetar]

LeiterWagnerFasterStrongr wrote: TransMonk wrote: Finished top-20 in the WSOP main No Limit Hold' Em event when he played. Supposedly savvy hedge-fund dude AND not a guy you want at your weekly poker night... so what do the Wilpons have on him, that he'd pay in 200M for a silent partnership?

Will he play in David Wright's annual poker fundraising event?

[metirish]

NYT


Hedge Fund Manager Negotiating Minority Stake in Mets

By RICHARD SANDOMIR and ANDREW ROSS SORKIN Published: May 26, 2011 David Einhorn, the hedge fund manager, is in exclusive negotiations to buy a minority stake in the Mets, the team confirmed Thursday. The Mets have settled on selling less than 49 percent of the team for $200 million; Einhorn would not receive a portion of SNY, the team�s profitable cable network, a person briefed on the matter said. The sale is subject to approval by Major League Baseball, and the Mets said they expected a definitive agreement by late June. �We are very excited about David joining our ownership group for several reasons,� Fred Wilpon, the Mets� principal owner, said in a statement released by the team. �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.� Einhorn, president of Greenlight Capital, emerged from a group of prospective buyers Wednesday. �Having an opportunity to become part of the Mets franchise is exciting beyond my wildest childhood dreams,� Einhorn said in the Mets� statement. �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 look forward to partnering with the Wilpon and Katz families through the good seasons, the tough seasons and especially the championship seasons.� The team lost $51 million last season, expects to lose as much as $70 million this season and has hundreds of millions of dollars in debt. As such, a number of interested parties looked at the Mets� books and went no further. �They have to do something,� said one banker who did not want to be named because he did business with the Mets. �Their attendance is way off, and they are going to run out of cash.� Many hurdles remain in any potential sale. Einhorn is likely to want indemnity from any legal settlements involving the court-appointed trustee representing the victims of the Bernard L. Madoff fraud. Given the Mets� financial woes, he may also want protection from future capital calls that owners are often requested to pay when there are shortfalls. Then there is the money. If the stake is $200 million, it may take time for Einhorn to organize the financing. �The problem is, it�s a big check to write,� said Rob Tilliss of Inner Circle Sports, a sports financial advisory firm. �The money and the governance, those are the two inhibitors.� The announcement could stanch a flow of recent bad news for the team, including injuries to David Wright and Ike Davis; critical remarks by Wilpon about Wright, Jose Reyes and Carlos Beltran; and the revelation that Major League Baseball loaned the team $25 million last November. The Mets have been formally searching for a buyer since late January, shortly before the unsealing of a $1 billion lawsuit against Wilpon and the co-owner, Saul Katz, by Irving H. Picard, the Madoff trustee. Apart from the lawsuit, the team needed money simply to finance its operations. Still, successfully finding a partner willing to pay $200 million will not end the Mets� financial problems. Most seriously, they are still contending with Picard. On Wednesday, former Gov. Mario M. Cuomo, the court-appointed mediator in the case filed in United States Bankruptcy Court, said that the mediation was entering a critical phase in which discussions on the framework of a possible settlement could begin. Cuomo said that by the end of next week, both sides should have submitted their valuations on the assets of Sterling Equities, Wilpon and Katz�s holding company. Those assets include the Mets, real estate and private equity investments and 65 percent of SNY, the Mets� cable network. �After that, we�ll have some serious sitdowns,� he said by telephone. �It won�t take long after that to see if a deal will be made.� Cuomo spoke one day after Wilpon was quoted as saying in an article in Sports Illustrated that Cuomo had been unable to persuade Picard �that the 700 is not going to be obtainable.� Picard is seeking the $1 billion in two major parts: $700 million in principal that Wilpon, Katz and their Sterling partners had in their Madoff accounts, and $300 million in fictitious profits from them. Cuomo said that Wilpon�s statement was premature. �It is a fact that I have not suggested any specific deal to either party,� he said. �We�ve not gone to the trustee and said, �Here�s a number we�re proposing to you.� � Wilpon appeared to be suggesting that $700 million was off the table because negotiating in that range would imply that he and Katz knew or should have known that Madoff might possibly be a fraud. Picard has accused them of turning a blind eye to warnings about Madoff in order to keep collecting consistent returns on their investments; they, in turn, accuse Picard of distorting or fabricating evidence. Karen Wagner, one of their lawyers, said in a statement: �Fred was referring to the fact that because he and Saul had no way of knowing anything about the fraud they�re unwilling to negotiate as though they�re not innocent victims.� Cuomo said that during meetings with the two sides, there have been discussions about the value of Sterling assets, and explorations of legal issues. When the property values are all in, he added, �we can start discussing the structures of possible settlements that will take into account all the differences in legal positions they have and the differences in factual positions they have.� He said that structuring a settlement �will be difficult given the disparity� between their positions. �One side says $100 million or whatever and the other side says $1 billion,� he said. �That certainly makes it challenging.� David Waldstein, Ken Belson and Michael S. Schmidt contributed reporting.

[Ceetar]

I guess the percentage might be up for debate still? They haven't actually finalized the details and won't until the end of June.

[Guest themetfairy]

metirish wrote: Here's an even younger looking picture of him Mets investor David Einhorn as Dave Kingman per Metsblog

I like the concept of having an owner who is also a true fan.

[metirish]

He really hasn't aged all that much from that picture has he? , must be nice to have that kind of wedge.

[MFS62]

He is the same age as my oldent daughter. Why couldn't she have met him while she was at Binghamton and he was at Cornell? Oh well...
Anyhow, the guy has balls. He once told the President of Microsoft to step down. Wilpon is a small fish by comparison.
I'd have preferred the team be sold to someone with hard assets, rather than a paper empire. But he seems stable enough, as long as he doesn't invest with a second coming of Bernie Madoff.

Later

[Edgy MD]

I'd have preferred the team be sold to someone with hard assets, rather than a paper empire.

I understand and agree with this. But the real money --- the money that produces the sorts of young men with rising financial profiles --- is in moving paper around these days.

Grew up in Milwaukee? Selig approves!

They would be the second big-league team with an Einhorn as a high-profile minority owner.

[Guest LeiterWagnerFasterStrongr]

MFS62 wrote: Anyhow, the guy has balls. He once told the President of Microsoft to step down. Wilpon is a small fish by comparison.

TODAY. He said it today. (Then, as per Metsblog, went back to the mike and added, "Go Mets.")

[metirish]

shares of microsoft went up after he said that.

[TransMonk]

LeiterWagnerFasterStrongr wrote: TransMonk wrote: Finished top-20 in the WSOP main No Limit Hold' Em event when he played.

Won $659,730 and donated it to the The Michael J. Fox Foundation of which he is a board member.

He also wrote a book.

[Edgy MD]

�Ballmer�s problem is that he�s stuck in the past,� Einhorn said. �He�s allowed competitors to beat Microsoft in huge areas, including search, mobile-communications software, tablet computing and social networking. Even worse, his response to these failures has been to pour tremendous resources into efforts to develop his way out of these holes.�

Over-relying on market position and it's advantage in resources instead of continuing to innovate, perpetually leaving you spending the most to come in second or third in new markets. True of Microsoft, true of Disney, true of the Mets.

[TransMonk]

From what I've found out about this guy over the past 2 hours, I like him a lot.

[Guest metsguyinmichigan]

Has better hair than Jeff!

Now, if and or when the Wilpons do sell, are we looking at the Mets next majority owner?

[soupcan]

metsguyinmichigan wrote: Has better hair than Jeff! Now, if and or when the Wilpons do sell, are we looking at the Mets next majority owner?

You've gotta think so, right?

I don't think a guy this savvy would throw $200M at the Mets unless there is an opportunity at some future point to purchase more.

Reminds me of Mark Cuban - in a good way. Young, wealthy, a personality a fan.

[metirish]

soupcan wrote: metsguyinmichigan wrote: Has better hair than Jeff! Now, if and or when the Wilpons do sell, are we looking at the Mets next majority owner? You've gotta think so, right? I don't think a guy this savvy would throw $200M at the Mets unless there is an opportunity at some future point to purchase more. Reminds me of Mark Cuban - in a good way. Young, wealthy, a personality a fan.

Agree , two years he'll own the Mets in full.

[metirish]

Here's David Einhorn's quotes from conference call ... Why buy in? "This is just something of great personal interest. I�m very excited to have this life experience. I�ve followed baseball all the way from my childhood. I probably watched hundreds or thousands of games all my life." Is this risky/sound investment? "I�m comfortable with the financial terms we�re working toward negotiating." How did this come about? "I read in the newspaper in, I think, January that the team wanted to sell a minority interest. � I thought I�d look into it. So we called over to their investment bankers. It�s been a very smooth process for the last several months. We�re very far along as understanding the business operations and prospects." You have been openly critical of companies such as Allied and Lehman. Are you really going to keep quiet? �First of all, the media can characterize how it does. I�ve always considered myself more of an investor. � We own way more things that is [sold] short. The perception out there is what it is.� Just the team? �I�m not really interested in owning a TV station." Bigger portion of ownership down the road? �What I�m interested right now is the opportunity in front of me right now. We don�t even have a completed transaction yet.� Will fans hear from you? "The Wilpons remain in control of the team. ... I think the Wilpons are the control holders of the team. I�m just looking forward to the overall experience this investment will lead to." Will you try to turn a profit from re-selling? "I have no real plans to sell this investment. I expect to hold it for a long, long time. ... The financial rewards, they'll take care of themselves over time."

[Guest John Cougar Lunchbucket]

Sounds like he's planning to have Fred killed before going all Barbarians at the Gate on Jeff.

I tentatively approve.

[Fman99]

I'm fine with it as long as Einhorn is not also Ray Finkle.

[ashie62]

John Cougar Lunchbucket wrote: Sounds like he's planning to have Fred killed before going all Barbarians at the Gate on Jeff. I tentatively approve.

It appears that way.

I hope he doesn't KKR it and gut the team for sale down the road. I don't trust him implicitly.

[Valadius]

Fman99 wrote: I'm fine with it as long as Einhorn is not also Ray Finkle.

Love it.

[HahnSolo]

Valadius wrote: Fman99 wrote: I'm fine with it as long as Einhorn is not also Ray Finkle. Love it.

Judging by the number of references to this I've seen in the last 24 hours, am I the only person who's never seen Ace Ventura?