Mets agree to sell part of team for $200 million
Einhorn, lifelong fan from New York area, enters exclusive talks
CHICAGO -- Shortly after reading in January that the Mets were looking to sell a minority stake in the franchise, David Einhorn contacted the team.
Four months later, he is close to completing a transaction that ranks beyond his "wildest childhood dreams." The Mets have agreed to sell a portion of the team to Einhorn, president of Greenlight Capital Inc., for $200 million, pending the completion of exclusive negotiations and approval by Major League Baseball owners.
"This is something of great personal interest," Einhorn said. "I'm very excited to have this life experience. I've followed baseball all the way from my childhood, having watched hundreds or thousands of games over my life. Having an opportunity to get involved at this level is going to be a fantastic life experience for me."
The Mets announced Thursday morning that Einhorn will make a "minority, non-operating investment in the team" and that the transaction should be completed by late June.
For Einhorn, 43, it is the realization of a lifelong personal goal. For the Mets, the sale will provide an immediate influx of cash to begin paying back loans from Major League Baseball.
"We are very excited about David joining our ownership group for several reasons," principal owner Fred Wilpon said in a statement. "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. In partnership with David, we look forward to achieving our ultimate goal of again becoming World Series champions."
Though neither Einhorn nor the Mets were willing to discuss the particulars of the deal in advance of its completion, various reports pegged Einhorn's $200 million stake at less than 49 percent of the club. The deal does not include any portion of the team-owned cable network SportsNet New York.
The influx of cash comes at an opportune time for the Mets, who are in the midst of litigation from a clawback lawsuit by the trustee seeking to recover funds lost in Bernard Madoff's Ponzi scheme. Wilpon told Sports Illustrated in a story appearing this week that the Mets are "bleeding cash" and could lose up to $70 million this year.
The Mets have not confirmed or commented on that report and neither Wilpon nor his son, Jeff, addressed the pending sale beyond the team's statement.
Einhorn, for his part, deemed the acquisition a "personal investment."
"I do expect the financial fortunes of the team to improve over time," Einhorn said. "I am comfortable with where we're headed. In fact, I'm beyond comfortable. I'm really excited."
Greenlight Capital, Inc., is a private investment firm that Einhorn co-founded in 1996. Einhorn also is chairman of the board of Greenlight Capital Re, Ltd. He gained national attention in 2008 for his criticisms of financial services firm Lehman Brothers, along with his short selling of Lehman stock.
Currently, Einhorn serves on the board of directors of The Michael J. Fox Foundation for Parkinson's Research and the Robin Hood Foundation. An avid poker player, Einhorn finished 18th in the 2006 World Series of Poker main event and donated his entire winnings of $659,730 to the Fox foundation. He is the author of the New York Times bestseller "Fooling Some of the People All of the Time: A Long Short (and Now Complete) Story," published in December 2010.
Einhorn hinted about his interest in the Mets at a hedge-fund conference on Wednesday, shouting "Let's Go Mets!" at the end of his presentation at the Ira Sohn Investment Conference in Manhattan, Reuters reported.
"This is a very, very exciting day for me," Einhorn said. "Having an opportunity to become part of the Mets franchise is exciting beyond my wildest childhood dreams."
Growing up a Mets fan in New Jersey, Einhorn once dressed in a homemade Dave Kingman Mets jersey for Halloween, and currently coaches his daughter's Little League team in Westchester County, N.Y. His connection to Major League Baseball followed him to his teenage home in Milwaukee, where his best friend lived in the same neighborhood as Commissioner Bud Selig.
"We played a lot of softball in the yard," Einhorn said. "If we hit it really, really far, it went into the Selig's yard, and that would be a home run."
The hope, for the Wilpons, is that Einhorn's investment will allow the team to stabilize its finances and increase liquidity. The Mets have borrowed a reported $100 million from Major League Baseball in light of their litigation with Irving Picard, and plan to reduce player payroll next season. General manager Sandy Alderson, who declined comment Thursday, said the 2012 payroll should fall between $100 million and its current level of roughly $140 million.
Since revealing their financial instability in late January, the Wilpons have been adamant in their desire both to retain a controlling interest in the team and to avoid selling any piece of SNY. The deal with Einhorn will allow them to achieve both goals.
For the team and its players, it should also provide some measure of stability. Alderson, manager Terry Collins and many prominent Mets have answered countless questions regarding the club's financial turmoil over the past four months, creating varying levels of distraction.
"This is obviously a good sign," Collins said. "This helps Fred and makes things run smoother, and I'm real excited for him."