Fred Wilpon is Gambling… with the Mets

David_einhorn_moneyYou got three years, Wilpon

Just another day in Flushing, folks.

According to ESPN, David Einhorn, a hedge fund manager who played in the World Series of Poker, is paying $200 million for a minority stake in the New York Mets.

Here's the fun part: Fred Wilpon has exactly three years to pay back Einhorn's money. If he is unable to do so, Einhorn can retain 60% ownership of the team for $1. Yep, no decimals points there- just a dollar.

[ESPN.com]

Einhorn has agreed in principle to purchase roughly 33 percent of the team for the $200 million, which will infuse cash and keep the organization solvent in the immediate future. The deal must still be approved by Major League Baseball.

Einhorn isn't out even if the Wilpons pay back the $200 million. He would still retain one-sixth of the team, a source told ESPNNewYork.com's Adam Rubin.

By taking the risk that they lose control of the team the Wilpons get to be solvent and continue to pay the money they owe to creditors and for team operations until the resolution of a $1 billion-plus lawsuit brought by the trustee trying to recover funds for the victims of Bernard Madoff's Ponzi scheme.

 

Seeing as though Forbes valued the Mets at $747 million (sans debt), Einhorn could gain 60% control – and become the team's owner – by paying only 25% of its worth.

The clock is ticking for Wilpon. He has three years to come up with the money, or else Einhorn takes over.

Wilpon and Einhorn, Einhorn and Wilpon.

I'm sure the folks over at FOX can turn this into a 24-hour-long story (17.5 with commercials) about a nuclear arms dealing baseball team owner who enlists the help of a now rogue Jack Bauer to save the franchise from a poker playing financial wiz. Boom: Season 9 of 24. Someone tell Chloe to set up a perimeter.

H/T to Tyler and (@PiercingsByAJ)

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2 Responses

  1. Not exactly sure but from what i read i think Einhorn gets to keep 33% of the team even if Wilpon repays him the 200 million. So this guy is either buying 66% for 200 millioin or 33% for free.

  2. He retains 16.6% of the team or a 1/6th stake in team if the loan of $200 million is repaid by the Wilpon’s in 3 years. Put it to you this way, if they pay him back he get a 16.6% stake in the team as interesting for loaning the Wilpon’s $200 million, if they don’t pay him back, he becomes majority owner and has a 60% stake in the team for $200,000,001. $1 will buy him a 27% stake in the team if he isn’t paid back his loan from good ol’ Freddie. Seems like a great “investment” as he was quoted on saying when everyone thought he was crazy for thinking that purchasing the Mets was actually considering to be just that.

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