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Mets sell 12 minority shares of team, repay loans to MLB and Bank of America

Mar 19, 2012, 8:13 PM EDT

New York Mets' owners Katz and Wilpon speak to the media outside the New York Federal Court

This is a good day for the Mets’ owners.

Less than 12 hours after learning that the Wilpons and Saul Katz reached a settlement out of court to pay $162 million to trustee Irving Picard in the Bernie Madoff case, Teri Thompson and Michael O’Keeffe of the New York Daily News are reporting that the Mets’ owners have closed those long-awaited deals to sell 12 minority shares in the team. Additionally, they have repaid their $25 million loan to MLB, a $40 million loan to Bank of America and additional club debt.

The minority shares are worth $20 million each. The total of $240 million is expected to cover the team’s operating costs during the 2012 season. Two of the shares are going to the Wilpons and Katz while another four are going to SNY, their partnered cable network. The only other known investor is hedge fund manager Steve Cohen, who is considered one of the frontrunners to buy the Dodgers.

I suppose it’s not surprising that this news came out on the same day as the settlement, as the Wilpons and Katz want to put this whole mess behind them and look like a solvent ownership group as soon as possible. Whether this is a positive development for the franchise or Mets fans in the long-term is up for debate, but the PR campaign is in full effect.

  1. Reflex - Mar 19, 2012 at 8:34 PM

    What terrible news for Mets fans…

  2. garryfish - Mar 19, 2012 at 8:34 PM

    ….and how does this help the Mets on the field????

  3. paperlions - Mar 19, 2012 at 8:52 PM

    So…..of this $240M, how much of it is really just the Wilpons/Katz moving money around among their leveraged investments? At least $120M of it, that really isn’t solving any of their long-term capital problems….if feels like some of the things McCourt was doing to buy himself more time to look for the escape hatch.

    • stex52 - Mar 20, 2012 at 3:50 PM

      If you look at the court settlement, it is more of the same. Sounds like most of this is moving numbers around on paper.

  4. chrisny3 - Mar 19, 2012 at 9:19 PM

    Excellent news day for Mets fans. Out of the 12 shares, only 2 that we know of involves money from internal sources. The 4 shares being bought by SNY were bought with money from the outside — from Time Warner and Comcast. Then there is the share by Steve Cohen. Who bought the other 5 shares no one knows yet.

    • jwbiii - Mar 20, 2012 at 12:44 AM

      The Mets own 65% of SNY, Time Warner 27%, and Comcast 8%. So of that $80M from SNY that we know of, that’s $52M from the Mets, $21.6M from Time Warner, and $6.4M from Comcast. That we know of. So paperlions is a bit closer to being right.

      Do you really think Time Warner and Comcast would be kicking in more without increasing their equity stake in SNY?

      • chrisny3 - Mar 20, 2012 at 11:59 AM

        No, you and paperlions are mistaken. It was reported by the NY Times that the SNY shares are being wholly financed by Times Warner and Comcast– from money that didn’t exist anywhere inside of Sterling Enterprises before the sales of the shares.

        It is not shifting around money because it didn’t exist before the sales. No one within the Mets had access to this money before the sale.

        I don’t really know the motives or reasons for what TW and CC did. But that is what the NYT’s reported. You will have to ask them if you want to know.

      • jwbiii - Mar 20, 2012 at 1:06 PM

        I think you are referring to this article

        http://www.nytimes.com/2012/02/03/sports/baseball/steven-a-cohen-expected-to-buy-stake-in-mets.html?ref=fredwilpon

        which doesn’t really say anything about the ownership of SNY.

        My 65%/27%/8% SNY ownership split figures come from here

        http://www.reuters.com/article/2011/03/19/us-baseball-mets-madoff-idUSTRE72I2SQ20110319

        This is from when I owned Comcast stock and had Comcast on my news feed. I honestly don’t know what it is now.

        There is one misstatement in Richard Sandomir’s NYT article:

        But Cohen might not own a bit of the Mets for long. If he beats a crowded field of rivals bidding for the Dodgers, he would have to sell his Mets’ stake.

        The MLB rules say:

        20 CONFLICTING INTERESTS

        (a) OWNERSHIP AND FINANCIAL INTERESTS. No Club, or owner, stockholder, officer, director or employee (including manager or player) of a Club, shall, directly or indirectly, own stock or any other proprietary interest of have any financial interest in any Club in its League, provided, however, that any owner or stockholder of a Major League Club (who is also not an officer, director or employee of a Club) whose interest does not exceed 5% of such Club and whose interest does constitute a control interest (as Defined in Article V, Section 2(b)(2) of the Major League Constitution) may own a non-control interest not exceeding 5% of any other Club or Clubs in its League, unless the Commissioner determines that such ownership would not be in the best interests of baseball.

        I think we can agree that:
        1. The Mets are worth more than $400M (gross value), so that Steve Cohen’s $20M stake in the Mets is worth less than 5%, so it’s ok, unless Chairman Selig decides it’s not,
        2. Chairman Selig is not going to rule against the Wilpons unless forced to do so, and
        3. Commissioner Landis really liked run on sentences.

        This especially odd for a NYT article, as the NYT owns small, non-controlling interests in both the Yankees and the Red Sox. You’d think Sandomir would know that.

      • chrisny3 - Mar 20, 2012 at 1:42 PM

        jwbii — The ownership composition of SNY is totally irrelevant to the fact that the money for the shares has come wholly from the outside, independent of SNY, from infusions of cash by TW and CC. The Mets could own 0% of SNY or 100% of SNY and it wouldn’t make a difference in the sense the Mets owners are getting money they didn’t have access to before. And, yes, that is the article I am talking about. It clearly says that the shares are being financed by TW and CC.

        And how is the NYT’s statement regarding Cohen’s ownership in conflict with the MLB rule? As I read it, the statement in the article is not contradicted by the rule at all. If Cohen is chosen as the Dodgers owner, he will obviously own more than 5% of that club, making him instantly ineligible to own another piece of another club, regardless of how large or small that other piece is. You are misreading the MLB rules. And not only will Cohen’s percentage of ownership of the Dodgers make him ineligible, but his status as a Dodger “officer, director, or employee” will make him ineligible.

        It should be noted, though it is irrelevant to the article, that Cohen will be given lots and lots of time to sell his Mets share should he become Dodger owner. I believe it was John Henry (or maybe Loria) who owned parts of two teams for well over a year at one point.

      • chrisny3 - Mar 20, 2012 at 1:46 PM

        P.S. The ownership composition of SNY is only relevant insofar as the more of SNY owned by Fred Wilpon and Katz, the more this cash infusion by TW and CC appears to be a gift. But we actually don’t know the terms of the agreement. Perhaps Wilpon and Katz gave up something to TW and CC in return for their cash infusions. We just don’t know since we are not privy to the agreement.

      • jwbiii - Mar 20, 2012 at 4:47 PM

        First, upon reading through this again, I agree with your, and Sandomir’s point about Cohen and his Mets ownership stake.

        Second, if the Mets own less of SNY, that would lower their future cash flow in exchange for current cash. Comcast has quite a bit of cash on their balance sheet and they are currently buying up their own 7% corporate debt hand over fist. Why would they be interested in buying a minority share of a closely held company unless it pays more than the debt which they are retiring (it doesn’t) or they gain some other benefit (additional equity and future cash flow from SNY)?

      • chrisny3 - Mar 20, 2012 at 5:58 PM

        Well, the idea that Cohen would have to sell his Mets share if he won the bidding for the Dodgers has been repeated in many places by many people, not just Sandomir. So it’s not just the interpretation of a few. Of course, I’m sure most of the others have just been repeating what they read elsewhere, but I’ve seen no one question this until you did. So I gather it’s correct.

        if the Mets own less of SNY, that would lower their future cash flow in exchange for current cash.

        Yes, but that’s only if the Mets changed their ownership percentage of SNY as a direct result of this agreement and outside cash infusion. We don’t know what, if anything, was given to TW and CC in return for their cash infusion.

        When I said it doesn’t matter what percentage of SNY the Mets have I was talking about it strictly from the perspective of obtaining this cash infusion from the outside sources. Whether Wilpon and Katz own 25% right now … or 80% right now, is irrelevant. Point is they needed people to invest outside money into the Mets and they got TW and CC to do it via SNY. It was money that didn’t exist inside of SNY prior to TW’s and CC’s investment. As far as we know, the Mets ownership percentage of SNY remained the same after the cash infusion.

        As for why CC would want to invest in the Mets (via SNY)? Again, I don’t know and you would have to ask them. But it’s been speculated that the Mets long-term interests are also critical to Comcast. Maybe from a programming and/or subscriber fee perspective. I really don’t know and I don’t want to speculate too much here. People have been doing too much of that when it comes to the Wilpons and their finances. And most of the time they are way off base … very wrong. The outside financing is what it is. For now, at least, according to the NYT’s.

    • Reflex - Mar 20, 2012 at 1:56 PM

      Why would this be excellent news for Mets fans? The Wilpons have put a terrible product on the field more often than not, and have demonstrated themselves to be complete financial morons and possibly criminals in the Madoff mess. How can this possibly be good news for Mets fans?

      • chrisny3 - Mar 20, 2012 at 2:03 PM

        LOL, you really expect me to get into it with you after you start acting like a child and throw personal insults around when you are losing and at a loss for words? Why should I waste my time with you?

      • Reflex - Mar 20, 2012 at 2:28 PM

        The bigger question is why you waste your time astroturfing for a billion dollar organization.

      • chrisny3 - Mar 20, 2012 at 2:38 PM

        No, I think the biggest question is why you are so obsessed about a team you’re not a fan of.

        I am here because I’m a Mets fan. So it’s logical I am here. No mystery at all.

      • paperlions - Mar 20, 2012 at 5:29 PM

        I’ve seen no evidence you are a Mets fan, you are only here to defend the Wilpons…any other time when it is just about baseball, you are no where to be seen.

      • chrisny3 - Mar 20, 2012 at 5:40 PM

        First you are wrong. I was here first and foremost to defend Wally Backman against Craig’s trashing of him. Second, since I participate in several other baseball boards that are more important to me, why should I spend more time here? There is only so much time in one day. I gather you live on forums, paperlion. Third, I only came back to “gloat” that virtually everything I predicted a year ago about Wilpon/Picard came true. And to see what type of delusional or sarcastic comments would come out of the mouths of those who were wrong.

        I don’t have to defend who I am to anyone. If you want to be “willfully blind” and hold on to the delusion I am someone I am not, that’s your problem. Keep being blind for all I care.

      • chrisny3 - Mar 20, 2012 at 6:14 PM

        Hey paperlions, just curious, who in the Mets organization do you really think I am? This is funny and I’d love to know, lol.

      • Reflex - Mar 20, 2012 at 6:39 PM

        Who knows who you are exactly? You are connected, that much is certain. Nobody outside of the press or the organization knows as much about the Wilpon situation as you.

        Yes, you are astroturfing. And no, you aren’t ever around issues that don’t involve the Wilpons. Including the Backman situation, which as pointed out before, had inside supporters. And yes its reasonable to assume a member of the front office in that faction could try to go out on forums and drum up ‘popular support’ for thier candidate.

      • chrisny3 - Mar 20, 2012 at 7:36 PM

        Once again, reflex is wrong! Many know I commented heavily about Backman, Bonds, and occasionally about other steroids issues. I had many heated debates with the many steroids apologists here about Bonds, including with Craig. So he knows I’ve been on a few topics. Oh, and I’ve commented occasionally about other Mets topics if I happened to be here already.

        But this isn’t really about me. It’s about YOU and why you are so delusional and insecure that you you just can’t discuss the issues. Instead you have go around name calling and pretending people are someone who they are not. Too funny, and it’s really sad about you.

        And everything I’ve said here about the Wilpons has been in published reports. Just because you apparently don’t read much, don’t think it’s not out there.

      • paperlions - Mar 20, 2012 at 7:56 PM

        I don’t know/care who you are….but to say you are here because you are a fan of the Mets is laughable (risible even). If you were here because you were a fan of baseball or the Mets, you would post about baseball or the Mets…but you don’t. You post about Mets ownership and nothing else baseball or Mets related. You’ve also been extremely biased in your take on the Mets ownership situation, and been pretty much wrong so far in everything you have said about it.

      • chrisny3 - Mar 21, 2012 at 4:39 PM

        paperlions, I have posted about the Mets team here quite a few times. I originally came here posting about the Mets team well before I ever uttered the word “Picard” on this website. That is a fact. Provable too. Obviously you are laughably prone to so much “willful blindness” as you know you are wrong. So it’s better for you to just ignore the facts and operate under delusion.

        As for my predictions on the Mets ownership, to the contrary, I have been pretty much right on everything I’ve said. From the Picard suit to the sales of the minority shares. It’s YOU who have been pretty much wrong on just about everything. There goes your “willful blindness” again. For you, ignorance is bliss.

        Oh, and for just the latest instance of you being wrong, all you have to do is look at your latest statement above about $120 million of the sales being just a shift of money around. The link posted here from the NYT’s proves you are dead wrong. You lose again.

      • chrisny3 - Mar 21, 2012 at 4:55 PM

        You know, even if I had never made a single comment here about another topic, the idea that I work for the Mets front office is just too comical. The idea that a Mets front office executive would waste his/her time engaging in a pissing match with pedestrian fans like you and reflex is just hilarious.

  5. randygnyc - Mar 19, 2012 at 9:24 PM

    This just gave the wilpons a way to invest their own personal money (however they got it), into the baseball operation. It props them up this year. They’ll downgrade the operating expenses (payroll etc) and hope the gate and tv earns more than expenses. The Mets lost $70 million last year. Expect a few years of poor product.

  6. Baseball Beer Burritos In That Order - Mar 19, 2012 at 9:57 PM

    Well that’s fine, all I need is this alcohol. Alcohol and this bowl. And that’s all I need.
    And the San Francisco Giants could be good this year. Alcohol and this bowl and the Giants should be fun to watch this year, and that’s all I need.
    And Old Gator. Alcohol and this bowl and Old Gator going on weird tangents that indicate he is either a learned man or a liberal conspiracy spambot and the Giants should be fun to watch this year and that’s all I need. I don’t need anything else.
    And this lighter. Alcohol and the bowl and this lighter and Old Gator and the Giants and that’s all I need.
    What are you looking at?

    • Old Gator - Mar 19, 2012 at 10:50 PM

      You are my beloved son in whom I am well pleased.

    • ezthinking - Mar 19, 2012 at 11:23 PM

      Navin, my boy, I think you just found your rhythm.

  7. knicks4life - Mar 19, 2012 at 10:15 PM

    Sell more

    • Old Gator - Mar 19, 2012 at 10:51 PM

      Like, maybe, 51%?

  8. jfk69 - Mar 19, 2012 at 10:31 PM

    The Wilpons confirmed through their new mouth piece Francesca that many rich people were taken in. Wilpon also stated that the real estate market is back and we won’t be needing that dirty Wall Street money anymore. So with that out of the way….How many shares can i sell you in the New Mets???
    No the money making cable rights are not included. But i did buy many shares myself. See…read the fine print. SEC APPROVED!

  9. randygnyc - Mar 19, 2012 at 11:20 PM

    Baseball beer and buritto, don’t be a jerk. (was I right?

    • Baseball Beer Burritos In That Order - Mar 20, 2012 at 12:12 AM

      You mean I’m gonna stay this color?

  10. weaselpuppy - Mar 20, 2012 at 2:01 AM

    I think Mets fans just found out what Wilpon’s “special purpose” is….

  11. chrisny3 - Mar 21, 2012 at 4:37 PM

    paperlions, I have posted about the Mets team here quite a few times. I originally came here posting about the Mets team well before I ever uttered the word “Picard” on this website. That is a fact. Provable too. Obviously you are laughably prone to so much “willful blindness” as you know you are wrong. So it’s better for you to just ignore the facts and operate under delusion.

    As for my predictions on the Mets ownership, to the contrary, I have been pretty much right on everything I’ve said. It’s YOU who have been pretty much wrong on just about everything. There goes your “willful blindness” again. For you, ignorance is bliss.

    Oh, and for just the latest instance of you being wrong, all you have to do is look at your latest statement above about $120 million of the sales being just a shift of money around. The link posted here from the NYT’s proves you are dead wrong. You lose again.

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