Tag:Wilpons and Madoff
Posted on: June 15, 2011 10:38 am
Edited on: June 15, 2011 1:01 pm
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New minority owner can buy rest of Mets for $1

By Evan Brunell

The incoming minority owner of the Mets will have a chance to purchase the entire team in three years for just $1, Forbes reports.

Einhorn agreed to purchase 33 percent of the Mets for $200 million, and can purchase the rest for a buck unless current owner Fred Wilpon repays Einhorn the full $200 million, which would then reduce Einhorn's share to 16 percent.

This is a major, major gamble by Wilpon who is banking on his finances being in order three years from now. The Mets are currently so desperate for money that they agreed to the sweetheart deal in order to stop their bleeding. The Mets could post a $70-million loss this year, $20 million more than 2010. That's a major hole to dig out from under, especially with the $1 billion lawsuit over profits from Bernie Madoff's scheme pending.

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Posted on: June 1, 2011 11:27 pm
Edited on: June 1, 2011 11:36 pm
 

Einhorn has right to buy majority share of Mets

By Evan Brunell

The New York Mets's new minority owner in David Einhorn has the ability to purchase 60 percent of the team in five years, reports SI.com's Jon Heyman.

It's unclear how both sides will determine a price for Einhorn to upgrade, but current owner Fred Wilpon is able to block the deal. If Einhorn decides to upgrade his ownership stake, Wilpon can repay Einhorn his $200 million investment, which would block Einhorn's move as well as reduce his minority share to 16.5 percent. (A previous report had Einhorn retaining the 33 percent stake after repayment.)

Heyman's sources say that there's zero chance Wilpon allows Einhorn to make a move for majority ownership unless Wilpon is forced to pay the $1 billion -- or some other significant amount that would cripple his ability to run the Mets -- that Bernie Madoff trustee Irving Picard is demanding. It's unlikely that Picard will be able to justify or collect that ripe sum, but could still make life very difficult for Wilpon.

Einhorn also has the ability to buy the rest of the team should Wilpon be forced to sell at any time.

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Posted on: May 28, 2011 2:55 pm
Edited on: June 1, 2011 11:37 pm
 

Einhorn has track to majority ownership of Mets

By Matt Snyder

David Einhorn has agreed to purchase about one-third of the Mets for $200 million, but he may end up owning up to 60 percent of the ballclub in three years, ESPN New York has reported (and is backed up by a report in the New York Times). Einhorn's current buy in will help the Mets keep their heads above the water in the short-term, but there's an option to up his stake in the team to 60 percent, according to ESPN New York's source.

The Wilpon family, the current majority owners of the Mets at present, could reportedly stop Einhorn from gaining control of the team, however, by returning his $200 million and allowing him to retain the 33 percent share in the Mets when the time comes.

Much of what happens will come down to the findings of the Wilpons' lawsuit to recover funds lost in the Bernie Madoff Ponzi scheme. If a favorable ruling comes about, the Wilpons will likely have enough cash to retain the majority ownership of the Mets. If not, it's likely the family will not have enough money to run the Mets' franchise, so they'd be forced to allow Einhorn to take the team over.

Einhorn, 42, is the president of Greenlight Capital, Inc.

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Posted on: May 24, 2011 12:23 pm
Edited on: May 24, 2011 3:03 pm
 

Wilpon says Mets will lose up to $70 million

Wilpon

By Evan Brunell


Fred Wilpon is certainly making the rounds in the media lately.

A day after talking to the New Yorker and blasting players Carlos Beltran, Jose Reyes and David Wright, there is news that Wilpon spoke to Sports Illustrated and revealed the Mets are on track to lose up to $70 million, MLB.com is reporting.

The Mets are "bleeding cash," as Wilpon says, and also notes that he should have a minority owner in place to purchase shares of the club for a price around $200 million, which would give the Mets funds to stay afloat, plus provide a cushion while the Bernie Madoff fallout is sorted out.

Speaking of Madoff, Wilpon admits he would be willing to settle a $1 billion lawsuit against him for an alledged role in Madoff's Ponzi scheme -- an allegation Wilpon steadfastly declines. Trustee Irving Picard is alleging that Wilpon knew that something was amiss with Madoff but did not take action.

A press release from Sports Illustrated reveals more on the matter, with Wilpon saying that Picard's lawsuit is what spurred him to seek a minority owner.

“I think the club became in jeopardy when [Picard] filed [for] this billion dollars. That’s when I decided to sell part of the club and maintain control in our operations and share the partnership with somebody,” Wilpon said.

Wilpon added that he would be willing to discuss reparations of $295 million in fictitious profits, but cannot pay back the $700 million in principal that Picard also wants.

“Governor [Marino] Cuomo has not been able to at this stage convince [Picard] that the 700 is not going to be obtainable,” Wilpon says, referring to the former New York governor who has been appointed as mediator between the two parties to try to facilitate an agreement.

And surprise, surprise but Madoff is also connected to the Bobby Bonilla fiasco. Back in 1999, Wilpon bought Bobby Bonilla out of his $5.9 million owed for the 2000 season, instead deferring his payment to a 25-year plan starting in 2011 in which Bonilla will be paid $1.19 million annually -- a $29.8 million total. Everyone has long wondered just why, and now we know.

“You can fault us for that. The judgment, in retrospect, was not good," Wilpon said.

That judgment was that the Mets planned to invest the saved $5.9 million with Madoff and receive the usual return of 10-12 percent, while Bonilla's deferred payments were based on an interest rate of eight percent. The Mets were hoping that they could make money off of the extra $5.9 million being converted into a profit.

"We trusted a man who turned out not to be trustworthy,” Wilpon added.

And if he had a face-to-face meeting with Madoff, currently in jail where he will remain for the rest of his life?

“If I saw Bernie, would I want to kick him or punch him? No, no. I’ve heard some people say, ‘that son of a bitch, I’d like to kill him,’ " Wilpon said. That’s not how I feel. I’ve tried to temper that because I’ve got to be focused on getting where we need to and putting this behind us.”

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Category: MLB
Posted on: May 23, 2011 11:25 pm
Edited on: June 1, 2011 11:38 pm
 

Wilpon: Mets are 'bleeding cash'

By C. Trent Rosecrans

Mets owner Fred Wilpon is talking again -- and this time it's not just about his players. In an upcoming Sports Illustrated story, Wilpon says the Mets are "bleeding cash," the New York Daily News reports.

Wilpon tells the magazine he could reach an agreement to sell a minority stake in the team for $200 million in the next three weeks, but didn't say to whom. 

Wilpon said he's afraid he'll lose the team if Irving Picard, the trustee who represents Bernie Madoff's victims, wins his $1 billion lawsuit against him.

The more and more that comes out about the Wilpons, it seems like it won't be long until Bud Selig has to act much like he did in Los Angeles. 

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Posted on: May 23, 2011 3:56 pm
Edited on: May 23, 2011 9:14 pm
 

Wright, Boras speak out on Wilpon's comments

By Evan Brunell

WilponEarlier Monday, Mets owner Fred Wilpon ripped several players in an article that ran in the New Yorker. Granted, those quotes were made in April while the Mets were busy being a mess, but that doesn't excuse Wilpon, who said third baseman David Wright, the face of the franchise, was a good player but not a superstar. Could have surprised the fanbase, as Wright has been marketed as a superstar to attract fans to the park.

He also called himself a schmuck for being suckered into Carlos Beltran's massive contract following his 2004 explosion in the postseason, as well as saying there was no way Jose Reyes would sniff a contract like Carl Crawford's seven-year, $142 million pact.

Wright chose to take the high road, declining to get into a tit-for-tat argument.

"Fred is a good man and is obviously going through some difficult times," he said in an e-mail to the New York Daily News. There is nothing more productive that I can say at this point.”

The Daily News adds that while Reyes is aware of the comments, he was "not bothered" and that his agents will not be commenting on the story. Carlos Beltran's agent, meanwhile, had different ideas. Scott Boras lashed out, saying he was surprised with the comments.

“These statements are not indicative of the Fred Wilpon I know,” Boras told the New York Post. Boras produced Beltran's statistics on the year, currently at .280/.377/.533 to dispute Wilpon's contention that the center fielder-turned-right fielder was "60 to 70 percent of what he once was." Again, Wilpon made these comments in April, when no one knew what to expect from Beltran as he moved to a new position to avoid wear and tear on the knees, plus was coming off an uninspiring 2010. But Boras also said, rightly so, that he didn't feel as if these comments should have been made.

“If you’re a member of a team or an organization and respect one another, any evaluation or internal opinion of players currently on the team should stay there,” he said. “If you want success and optimal performance, it’s best to keep those in-house.”

All this has led to uncertainty about Beltran's future in the city post-2011, as he is an impending free agent. Wilpon may not agree to bring him back, or Beltran may not be interested.

“Carlos enjoys being a Met and is excited by how well he’s doing,” Boras said. “I have always had a good relationship with Jeff [Fred's son, on the right in the photo, with Fred] and Fred. It’s up to the individual player to look at the context of the statements discussed and come up with their own opinion.”

One Met -- who probably doesn't make enough to enter Wilpon's radar -- had a suggestion for the team's owner.

"Sometimes people say things they regret," pitcher Mike Pelfrey told the New York Times. "It’s a mistake and you learn from it. Maybe next spring when we have our media workshop for the players, Fred can come and sit in on it."

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Posted on: May 11, 2011 7:20 pm
 

Cohen pulls out of bidding for Mets stake

By Evan Brunell

The Mets are now back to square one in their search for a new minority owner after heavy favorite Steven Cohen backed out of a $200 million purchase with backing from Goldman Sachs.

A source close to the proceedings told the New York Post that Cohen has now lost interest, forcing the Wilpons to ask rejected bidders to make new counteroffers. As a result of Cohen's pull out, the Mets will be unable to name a preferred bidder at the upcoming owners's meetings. This could be an issue as MLB wanted a bidder named by this time when it loaned New York $25 million in November.

Cohen may have withdrawn from consideration because he's getting caught in an insider-trading snafu and baseball would have wanted some questions answered. Two employees at Cohen's hedge fund pleaded guilty to insider trading and now federal prosecutors are looking into Cohen's role in the trading as it directly benefited his personal account. While earlier reports had Cohen walking away from the scandal unscathed, that's changed.

This could be a blessing in disguise, even if Cohen is truly innocent. It would have been idiotic for the Mets to sell a minority share of the team -- which will likely eventually turn into a majority share -- to someone with connections to shady financial deals. Shady financial deals is exactly what got the Mets in hot water in the first place with the Bernie Madoff scandal.

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Category: MLB
Posted on: April 30, 2011 11:22 am
Edited on: May 11, 2011 7:12 pm
 

Mets to give new minority owner say in finances

Wilpon

By Evan Brunell

When the Mets sell a minority stake in the team, the holder is expected to have input on the team, as the New York Post reports.

In fact, the new owner will receive veto power over some financial decisions -- but not all, Mets officials reportedly told the suitors still in the hunt for the stake. Such veto power will be used for overall payroll and large contracts to players, which is quite a bit of influence to have for someone not expected to be deeply involved with the club. The current owner, Fred Wilpon (pictured), does not intend to give up his majority stake and has his brother-in-law as president and son, Jeff, as COO. That doesn't leave much room for influence, but the Wilpons will make room by creating a board of directors to oversee the Mets' financial operations.

This represents a turnaround, as all three had previously said they would "continue to control and manage the team's operations," but now plan to treat the new owner as a "real partner."

What's the reason for the change of heart?

It's difficult to say as there's no reports on the change of heart. In pure speculation, one has to wonder if the Wilpons are now less confident about being able to hang onto their majority share of the Mets. They are being sued for a billion dollars by trustee Irving Picard, tasked with overseeing the reparations of Bernie Madoff's victims. The Wilpons were heavy investors with Madoff and made millions of false profits and also encouraged select friends and associates to invest with Madoff. They also put Madoff's fund in the 401(k)s of employees at Sterling Equities, the Wilpons' real-estate firm, which has wiped out many employee's retirement savings.

In addition to the Madoff scandal perhaps impacting the change of heart, the Dodgers situation may also have caused consternation. Bud Selig has come under fire for the perceived similarities between L.A. and New York, and yet treating the two differently, perhaps because the Wilpons are long-time friends of Selig. The commissioner has denied this, saying the two situations are sharply divergent. That said, public pressure could be enough to cause the Wilpons to make concessions to ensure the grace of their fans that the Mets are being run properly. Giving the new owner, who could command a stake anywhere from 20 to 49 percent, more say could be one way of addressing that.

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The views expressed in this blog are solely those of the author and do not reflect the views of CBS Sports or CBSSports.com