David Einhorn is out as a possible part-owner of the New York Mets. Now the team is looking to sell shares of the ball club. But before you go running to your E-Trade account, one share will run you around $20 million.
The Mets ended negotiations with Einhorn after a “heated” meeting Thursday morning, according to the Daily News. It seems Einhorn was not satisfied with being a minority owner — he wanted a clearer path towards majority ownership.
The News writes:
According to people familiar with the negotiations, Einhorn’s attempts to gain approval from Major League Baseball as the team’s “control person” – or voting representative – within a five-year period met with resistance from baseball and threw the negotiations into turmoil.
“What he was asking for was unprecedented,” said one source familiar with the talks. “He was asking to become the control person before it was clear that he would ever gain a majority interest in the team.”
Under baseball’s rules, a team’s control person is not necessarily the majority owner, although in the case of the Mets, Fred Wilpon, a principal owner, is the control person.
Einhorn claims he discussed this with MLB Commissioner Bud Selig, whom he said had no problem with it.
Einhorn said in a statement:
It is clear that it will not be possible for me to consummate the transaction on the terms that the Sterling-Mets organization and I originally agreed to several months ago. The extensive nature of changes that were proposed to me at the last minute has made a successful transaction impossible.
A Mets source calls Einhorn’s version of the events “fictional, a fairy tale.”
The original deal called for Einhorn to get 33% of the team for $200 million. He would have been able to increase his stake in the team to 60% if the Wilpons did not repay the money within five to eight years. If they did, Einhorn would have gotten to keep 16% of the team as “interest” for what would have amounted to a loan.
But Einhorn seemed to want an assurance that he would someday be majority owner. The Wilpons nixed that idea.
Now they move on to their latest scheme, which is to sell 10-12 shares of the team for $20 million each, raising the same amount of money Einhorn was to infuse into the club.
“They’re not going back to one big investor,” said one source.
Fred Wilpon said in a statement:
We are very confident in the team’s plans – both off and on the field. We will engage with other individuals, some who have been previously vetted by Major League Baseball, along with other interested parties, regarding a potential minority investment into the franchise.
The Mets can likely do this because financial situation has reportedly improved in the months since the Einhorn negotiations began. They have covered the expected $70 million in loses this season, and while the Wilpons still face that $1 billion Madoff clawback lawsuit, recent court rulings suggest they will likely only be responsible for paying back the profit they made from their investments, which is far less than $1 billion.
So let’s all begin the process of digging in the couch cushions, selling those old vinyl albums and borrowing money from friends and relatives to raise the $20 million for a share of our beloved Mets.