Saturday, May 28, 2011

Einhorn pact a bad deal for Wilpon, Mets

I couldn't help but wonder over the last two days why anyone would sink $200 million into a flailing baseball team without getting a say in running the ballclub? Now I know the answer.

David Einhorn is willing to make the $200 million investment in the New York Mets that owner Fred Wilpon needs to ride out the storm of the Bernie Madoff clawback lawsuit. But there apparently is a major catch. Einhorn will get about 33% of the team, but has the option to raise that stake to 60% in three years. And the only way Wilpon can stop him is by paying back the $200 million, but allowing him to retain his one-third share.

Is it a bad deal for Wilpon and his family? Absolutely. But, right now, Wilpon has no choice. He doesn’t want to sell his team or a stake in his profitable television network, which would expand the pool of potential investors. Wilpon desperately needs the cash and seems to be making the best deal he can with that metaphorical gun pointed at his head.

Wilpon may just be delaying the inevitable. He might be able to use Einhorn’s money to survive for the next few years, but he is going to have to bank on the Mets improving their on-field and financial performance enough to make the team profitable again. He’s going to have to pray that the trustee in the Madoff case fails in his effort to force Wilpon & Co to pay back the full principal of their Madoff investments. Too much has to go right for Wilpon for him to retain control of the Mets and nothing has gone right for him in the last week, let alone the last two years.

We may be getting a glimpse of the future majority owner of the Mets in Einhorn and we know nothing about the type of owner he would be. Is he going to be a Wilpon or George Steinbrenner type, willing to spend money on payroll in a quest for on-field success? Or is he going to hoard the money, cut payroll and just use the cache of owning a Major League Baseball team for his own purposes, screwing Mets fans in the process? We simply do not know and that could make this a very bad deal for the Mets.

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