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David Einhorn is getting one heck of a deal

May 28, 2011, 3:06 PM EDT

david einhorn poker

UPDATE: The New York Times confirms Adam Rubin’s report and adds that the deal being discussed between Einhorn and the Mets does not include SNY, which is the team’s television network. Einhorn didn’t say much during the conference call Thursday, but was adamant that he had “no interest” in owning a television station.

9:30 AM: Adam Rubin of ESPN New York reports that David Einhorn does indeed have a path to majority ownership with the Mets. Of course, that was the assumption all along, as it wouldn’t make much sense if he didn’t have that option, but the exact terms of the deal are a doozy.

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 said the Wilpons can stop Einhorn from gaining the majority share essentially by returning Einhorn’s initial $200 million investment yet allowing him to keep the 33 percent share of the team.

So, basically, in three years either Einhorn will either have majority control of the Mets or get his initial $200 million investment back and still keep one-third of the team. Kind of makes you wish you had $200 million sitting around, right? Not only is this the best deal you’ll see this week (year?), but it also tells you how hard-up the Wilpons are for cash right now.

  1. irishjackmp - May 28, 2011 at 9:46 AM

    Wow. What a can’t lose deal if you are Einhorn.

    Nice to see Fred Wilpon isn’t any brighter than when he thought it was a good idea to invest his money with Bernie Madoff.

  2. yankeesfanlen - May 28, 2011 at 10:15 AM

    As of the day he turns the $200M check to the Wilpons, Einhorn is in the drivers seat. He has all the equity of an illiquid asset. The banks (Wilpon’s loans) own the rest. The banks are like Goodfellas characters- “Pay me the Money”, and have no interest in running a team. Einhorn does, and will, the Wilpon’s will cry that they own 67% and Einhorn will say that’s the banks money, I have $200M in this team, you have horsefeathers.
    Nive poker face, Einhorn.

    • paperlions - May 28, 2011 at 10:34 AM

      Is it true that the loans are to the Wilpons and not to the team? Meaning that all of the debt is still the Wilpons? It would seem that the loans would have to be specifically to the team, otherwise the sale would have to be approved by the banks, who likely would require refinancing because the Wilpons no longer owned the entire asset that serves as collateral for their loan.

      • yankeesfanlen - May 28, 2011 at 10:40 AM

        Yes, the loans were to the team, however , they’re hundreds of millions that obviously the Wilpons can’t pay, and Einhorn could, for further control of the team, if it came to that.

      • moralitydecay - May 28, 2011 at 11:32 AM

        Financial institutions usually don’t want you to refinance at a lower interest rate if you make the payments. As interest rates have been declining for a while and Einhorn has supplied liquidity I don’t see why they would push for a refinancing of the team, they probably lose in the long-run.

  3. paperlions - May 28, 2011 at 10:32 AM

    A 3-year $200MM loan without interest in exchange for 33% of the team or the right to own 60%. Ho. Lee. Crap.

    I have a hard time believing that there were any remaining viable suitors if that is the deal Einhorn got….because how in the world could the Wilpons do no better than that?

    I would be surprised though if it actually happens this way. Does anyone else think the Wilpons can survive 3 more years running the team? I bet they sell a controlling interest (or all of it) to Einhorn before then.

    • D.J. Short - May 28, 2011 at 10:33 AM

      Right. I have a feeling it won’t take three years.

    • cur68 - May 28, 2011 at 11:30 AM

      This could be the best thing for the Mets. He’s got 3 years to figure out how to run a club and get a management team in place. This guy is sharp, sharper than any Wilpon, so here’s hoping he makes something of that club.

    • spudchukar - May 28, 2011 at 12:47 PM

      Even 600 mil seems cheap for the Mets. I wonder if there are any clauses in the deal that open up to Einhorn TV rights?

      • jwbiii - May 28, 2011 at 1:12 PM

        $600M Seems about right. The last Forbes report had the Mets at $850M with $450M debt. The last to teams to be sold, the Cubs and the Rangers, went for 20-25% more than their most recent Forbes valuations. This moves the Mets to a little over $1B, less the $450M debt, right at about $600M.

      • jwbiii - May 28, 2011 at 1:48 PM

        As for the TV rights, 67% of SNY is owned by the Mets, not by the Wilpons as a separate entity. Time Warner and NBC Universal are the minority owners. Their ownership agreement makes it difficult for the Mets to sell their share, as the minority owners have the right to match offers. NBC Universal is owned by Comcast and GE and they may be willing to do that. However, if Einhorn winds up with the Mets, he’ll also get the controlling interest in SNY.

  4. mornelithe - May 28, 2011 at 11:16 AM

    Einhorn is Finkle? Einhorn’s a man???!??!?

    • cur68 - May 28, 2011 at 11:28 AM

      Laces out Dan…

      • mornelithe - May 28, 2011 at 4:18 PM

        Hi-5!

    • Old Gator - May 28, 2011 at 12:43 PM

      No, but Einhorn’s not inbred. Look at the little Wilpon….you can see the telomeres fraying even now….

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