SBD/June 16, 2011/Franchises

Mets Downplay Report That Einhorn Could Buy Controlling Interest For $1

Einhorn's agreement with Mets includes option to increase stake in three years

Mets Senior VP/Marketing & Communications David Newman said that a Forbes report claiming prospective investor David Einhorn could gain control of the team in three years for $1 "wasn't accurate," according to Mark DeCambre of the N.Y. POST. Einhorn's agreement to buy a minority stake in the Mets for $200M included "an option to increase" his share in three years, and the report indicated that the "option price is $1." But Newman said, "Like many other media reports related to the terms of a potential agreement, (this one) is again simply false." Newman declined to elaborate on "what in the report was false." A spokesperson for Einhorn declined comment, but sources said that the $1 price is "off-base without offering details, because the negotiations are still in flux" (N.Y. POST, 6/16). In the original report, FORBES' Mike Ozanian noted Einhorn's deal with the Mets calls for him to "pay $200 million for a one-third stake in the Mets and would have the right to obtain a 60% interest in three years unless” team Owners Fred Wilpon and Saul Katz “returned the $200 million to Einhorn but allowed” him to retain his 33% ownership. A banking source said the "strike price" for the 60% stake is $1. Ozanian wrote while the deal is "not final and is subject to the approval of MLB, its terms underscore the desperation of Wilpon and Katz" (FORBES.com, 6/15).

CONFLICTING NUMBERS: In N.Y., Andy Martino cites sources as saying that Einhorn's agreement, "expected to be finalized before the All-Star Game," allows him to "double his 33%, $200million stake to 66% if Fred and Jeff Wilpon and Saul Katz do not buy him out for his original investment within five years." If the Wilpons and Katz "do buy him out, Einhorn will pay $1 to retain a one-sixth stake in the team," not the 33% that has been reported (N.Y. DAILY NEWS, 6/16). ESPN N.Y.'s Adam Rubin also cited a source as saying that Einhorn "would still retain one-sixth of the team" if the Wilpons and Katz return his $200M initial investment. Additional sources said that Einhorn “is shielded from any obligations should the Wilpons have an unfavorable resolution in the Ponzi scheme case” (ESPNNY.com, 6/15). 

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