The sale of the underperforming New York Mets — which is losing at least $50 million a year — to hedge fund billionaire Steven Cohen has been called off.
Cohen, who currently owns eight percent of the team once called the “Amazin’ Mets” for their improbable feat of winning the 1969 World Series, was set to plunk in $2.6 billion for an 80 percent stake in the ball club. If it had gone through, the $2.6 billion tag would have been the highest price ever paid for a Major League Baseball (MLB) ball club.
Cohen is a lifelong Mets fan willing to take the risk of owning the Mets despite a demand by the current owner, Fred Wilpon, he be allowed to control the franchise for five years after the deal had closed. Fred Wilpon also wanted his son, Jeff, to stay on as Mets’ COO for the same length of time.
The Wilpons and Cohen announced their agreement for a sale in December. The specific wording of the deal provides that “Fred Wilpon will remain in the role of the Control Person and CEO for five years and Jeff Wilpon will remain in his role of Chief Operating Officer for the 5 year period as well.”
Pundits said the wording of the agreement left the term “role” open to interpretation. Some said role might mean a title and salary without actual power. Others say a role is what it says it is, a role.
Cohen, who has a net worth of $9.2 billion, and the Wilpons reached an interim agreement on the sale in December 2019 despite the catch. The deal was set for signing when Cohen imposed last minute demands. While the exact reasons for the failed deal are unclear, it’s widely believed a significant portion of the disagreement revolved around how much power such “roles” granted the Wilpons even after Cohen owned 80 percent of the club. Those demands weren’t revealed but they were huge enough to be a deal breaker, according to reliable sources with knowledge of the deal.
After the failure of the Cohen deal, the Wilpons and co-owner Saul Katz are now open to ceding power immediately. Bloomberg reports the Wilpons and Katz won’t attach any preconditions regarding control of the team to the upcoming sale. This means whoever buys the Mets will likely assume control immediately from the Wilpon family.
Baseball pundits said by showing a willingness to cede control at the outset, the Wilpons may get more than the record $2.6 billion Cohen had agreed to pay.
“In most cases an immediate sale with control will lead to a higher price than a sale today with a future option of control,” said sports consultant Marc Ganis. “Most parties who buy a team want to own and operate it sooner rather than later. They don’t want to be in a position where the interim owner may reduce the value, take on debt or make bad trades.”