What's Your Language?

Wednesday, February 23, 2011

Mets may sell more than 25 percent of team

According to Richard Sandomir and Ken Belson of the New York Times, the Wilpons and Mets team president Saul Katz are willing to sell more than 20 to 25 percent of the team as long as they hold the majority.

"Let's just say that a noncontrolling stake could be north of 25 percent," said Steve Greenberg, who is advising the Mets on the sale.

Time for a process of sale like this (according to the NY Times) can take awhile.  Bidders have to get a background check from Major League Baseball, which includes their Financial records so they can prove they can back their financial investment.

The Times is claiming that the portion (25%) which the Mets are looking for can run about $100 Million.

Then once the bidder is approved by all owners and MLB the bidder can examine all the Mets Financial Books. Bidders can adjust their expectations on what to offer for a piece of the club, or walk away.

All possible hypothetical sales packages are being floated by executives in the sports investment industry, who declined to speak on the record to the Times because they did not want to jeopardize their relationship with the Mets. They include:
  • The Mets sell 51 percent over several years, which would be similar to the phased-in, five-year sale of the San Diego Padres by John Moores to a group led by Jeff Moorad.
  • The Mets sell only 25 percent of the team but throw in 15 percent of SNY, the team’s profitable cable network.
  • The Mets sell 25 percent of the team but insist on getting a put option from the buyer that allows them to sell another 26 percent to the new investors at an agreed-upon price anytime over the next three years. The option gives the buyer the possibility of future control, but the decision to trigger the option would rest with Wilpon and Katz. 
Potential buyers could also ask for a call option, which would give them the right to buy a larger stake. But it is unlikely that Wilpon would give the buyer of a minority stake the leverage to buy control of the team.
The Mets have received plenty of interest according to the Wilpons, but several investors who have stepped forward publicly and others who have formed groups privately have said they want either a majority share of the team or an option to obtain control of the club over time.

Two potential bidders, Donald Trump and the investment bankers behind the BuyTheMets.com web site, have voiced a preference to buy all of the team.

Mike Repole, a co-founder of Glacéau, the maker of Vitaminwater, and the owner of the Kentucky Derby favorite Uncle Mo, has said he would invest in a minority interest only if he had a say in running the team.

All I know is this, someone will pay the Wilpon's price and pay it sooner than later...

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