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2/7/20

Reese Kaplan -- To Have, Have Not and Have Again



For people who grew up in a Christian belief system, there was a period in their lives when they questioned the reality of Santa Claus and what his existence could mean to improving their lives.  Many Christians and non-Christians had that same kind of moment of wonder when on December 4th came the announcement everyone dreamed but no one believed would ever be made – that the New York Mets owned and mismanaged for years by the Wilpon family was being sold to Steve Cohen, a Mets fan version of Santa Claus.  It was all anyone could imagine having a new owner who would forge ahead with proper investment in talent to propel the team into the post season once again.


Yup, that sounded like a nice dream.  Then we woke up.  On Tuesday, February 4th the announcement came from hither and yon that the whole Cohen-as-savior gambit was dead in the water.  Oh no…say it ain’t so! 


The issue at hand allegedly was an eleventh-hour change in contract terms by the Wilpon family which would ensure they would get Mr. Cohen’s money right away, but the Wilpons would not relinquish any control of authority for more than five full years.  Just so we understand what this means to the deal, the Cohens and Wilpons agreed in principle that Cohen would infuse capital immediately and would assume management at the same time.  Then the Wilpons realized that as much as they desired money, they were not exactly ready to vacate their offices and let someone else prove to the world how dumb they have been (Jeff, more so than Fred).  The Wilpons are drowning in debt and one of the major partners, Saul Katz, wants out immediately.  It seemed as if minority owner Steve Cohen’s interest in expanding his role was a perfect fit until they decided at the last minute to test whether he wanted to own the team or run the team.

Steve Cohen essentially told the Wilpons to do something anatomically impossible and was prepared to walk away entirely.  Some media pundits are claiming that it’s all a big negotiating tactic between the two sides to get some movement on the contract terms.  Others are jumping into the pit of misery, figuring the last great hope for a post-Wilpon Mets has been dashed.  The New York Times is one of the few legitimate outlets stating that the deal is not dead and movement can still happen.  Then again they predicted Hillary Clinton would be President, so we don’t know how much faith to put into their prognostications.
As normally pessimistic as I am about things on the Mets front, the fact is that the club is desperate for money and these alleged contract changes pretty much seal the deal that they will have to embrace Cohen or realize there’s no one out there stupid enough to put up with their shenanigans.  Cohen is a master negotiator himself and knows that by threatening to pull out before the deed is done, he’s in the driver’s seat.  He has put out a statement saying the deal is dead and the Wilpons have done the same.  No one is going to want to embrace the Wilpons given what they've done.  Even with the proclamation from Rob Manfred that it's not going to happen, I still think it will get done.  Even the Mets say they want to find a new buyer.  No one is shallow enough to sign up to work with the Wilpons.  Of course, the anxiety the Wilpons caused their fans is simply par for the course and should have been expected. 

9 comments:

  1. As much as I'd like to believe in Santa Claus being Steve Cohen, both sides have now said that the deal is dead. The Wilpons have hired a consulting company (Allan & Co.) to pursue a deal with another party.

    You may say, "Who would want to do a deal with the Wilpons with the kind of demands they are putting on a potential buyer"? On the surface, I would kind of agree with that. But, then you have to think. There are so many multi-millionaires and billionaires out there these days that would love to own a ML team. There are only 30 of them. Of those, probably only about 10-12 are in major markets like New York. And they don't come up for sale everyday. If any one of those mega-wealthy investors (or a consortium of a group of them) really want a team, they may pay the freight and live with the Wilopns running the team, just to say "I (we) own this". Either that, or really overwhelm them with money to go away,

    More reports from this morning (take it for what it's worth). A report on WFAN quoted CNBC correspondent Marc Faber (apparently someone in close with Cohen). The three things that changed were:

    1. The Wilpons and Cohen agreed to the fact that the Wilpons would be in control for five years. The Wilpons then tried to extend that at the last minute.

    2. The Wilpons (Jeff and Fred) draw a $2.5 million salary from the Mets per year. They demanded it be raised to $4 million per year.

    3. Steve Cohen wanted to bring in his own analytics people to review the operation. The Wilpons refused.

    All of this taken separately may not seem to be enough to kill the deal. From Steve Cohen's view it was: "You make a deal with me and ask me to trust you for five years, and we can't even get to the deal being done and you're renegeing on parts of it. How can I trust you for five years"?

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  2. I am REALLY bummed out about this.

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  3. Hasn't Mark Cuban (Dallas Mavericks) been searching for a few years to become the owner of a baseball team?

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  4. To me, the worst part of this is that the Mets will now not invest money into their roster for all of this year and probably through next year as a buyer has to be found and the sale finalized.

    This most likely puts the end to any thought that the Mets will get Mookie Betts to patrol center field in free agency.

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  5. Bob G.

    I dont think Cuban would ever invest 2.6 billion bucks for something he couldn't manage for 5 years.

    Even Mr. Wonderful would smack him in the back of his head.

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  6. Mack.........EXACLTY!

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  7. Bob G.

    What's even worse to me is that, in the next year or two, they will be in the window where they would want to lock up players like Conforto, McNeil, Alonso, etc. to long-term deals and buy out their arbitration years and some of their free-agent years. Without that, they may be staring at a Mookie Betts kind of situation a few years from now.

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  8. Anyone with even faint awareness of the stock market knows about a phenomenon called "Mergers and Acquisitions".

    One company wants to merge with another, or take it over, and negotiations begin. Each side has concerns about the deal, beyond the price. Sometimes things proceed quickly, sometimes they drag on, and sometimes the deal falls through.

    Both principals in the Mets deal are very wealthy men, who ha e made many corporate deals. If they don't agree on the terms, there's no deal. "Blame" is an emotional term, not a financial one.

    The only thing we know for sure is that there apparently was a deal in place, but it never was completed. It may be fun to speculate on what went wrong, but ultimately it doesn't matter.

    The bottom line is that the buyer and the seller disagreed on the final terms, so there apparently is no deal.

    The sellers are looking for another buyer, and if they disagree they will have to compromise if a deal will be made.

    And life will go on.

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