The New York Mets' financial "bailout" may have taken another positive step, according to various reports.
David Einhorn's $200 million agreement with the Mets -- which accounts for 33 percent of the team -- is technically a temporary three-year loan. After these three years, Einhorn will have the ability to acquire a "majority stake" in the team, which was first reported by ESPN NY's Adam Rubin.
Because the team is carrying about $425 million in debt, the value of the team is roughly $1 billion, according to the person. In three years, Mr. Einhorn would have the right to acquire an additional 27% of the team based on the $1 billion valuation, a move that would make him the team's majority owner.
Wilpon can turn down the offer after the two years, but then he must pay the $200 million back to Einhorn and allow him to keep the 33 percent stake of the Mets. Doing this will net Einhorn more than $130 million just on interest of the loan alone.
After three years, the Mets could have a new principle owner, as Einhorn could have at least a 60 percent stake in the team. The Wilpons have owned the team for more than three decades.
This is definitely great news for the Mets organization because, to me at least, it slowly transitions to some financial stability. It doesn't mean that the situation is over -- the Wilpons are certainly not in the clear -- but at least there is some optimism around this organization's finances now. You almost don't want the Wilpons to recover so that this team can turn a new page ...
Einhorn is not getting a leading voice with the Mets, or a share of the SNY TV money. Rovell said he is surprised because Einhorn is "not exactly a “sit back and watch” kind of guy.
Here is how Einhorn explained his decision to Rovell in an interview on Thursday:
“All I can really say is that I’m very comfortable with the financial arrangement that we’re contemplating for this transaction,” he said.
Maybe Einhorn is doing this to help out a friend in Fred Wilpon, though a $200 million investment seems like a lot more than just help. Maybe he is doing it, and accepting the short-term lack of authority, because in the end he believes the Wilpons will have to sell and this puts him in perfect position to take full control of the franchise.
The New York Mets finally found a buyer for a minority stake in the team in David Einhorn, president of Greenlight Capital, a hedge fund. For approximately $200 million, Einhorn will receive less than 50 percent of the team and reportedly not get any part of SNY, the Mets television network.
While it's not the end of the problems for the Wilpon family, it does allow them -- along with partner Saul Katz -- to keep control of the Mets while fighting off debt and a lawsuit seeking $1 billion due to their involvement with the Bernard Madoff Ponzi scheme.
Einhorn is a board member of The Michael J. Fox and Robin Hood foundations and also a major contributor to both. After finishing in the top 20 at the World Series of Poker main event in 2006, Einhorn donated his entire winnings of $659,730 to the foundation.
With his big check and charitable donations also comes a history of trouble with the SEC. Einhorn was investigated for market manipulation following a prolonged battle with Allied Capital, a private equity firm, that was detailed in his book "Fooling Some Of The People All Of The Time".
Einhorn reportedly owns 9.1 million shares of Microsoft, giving him plenty of money to purchase the club outright if Wilpon and Katz are forced to sell their remaining share.