Let’s just say, for the hell of it, that I’m a multi-billionaire with nothing to do with my money. Just out of the blue, I happen to pick up a newspaper and see that the Mets are selling 25% of the team. I always wanted a piece of a major league franchise so after doing so basic math, I’m looking at a withdrawal of about 2-3 hundred million from my local ATM if I want in.
A drop in the bucket.
The following is a fictitious conversation between Fred Wilpon and my Billionaire self.
Fred Wilpon: So your interested in a partial share of my club.
Gonzo: Yes I am, after buying 3 islands, I’ve decided to invest my money and be a part of my favorite team. How much do you want and who do I write the check out to?
Fred: Great! We’re very excited. Now if you please, write out a check for 250 million dollars and I’ll have my secretary write you a receipt. Oh by the way you don’t have to put my real name on the check, just use my middle name…Cash.
Gonzo: Wow, I never thought it was that easy, do you have a pen, I left my in my 3 bladed helicopter.
Fred: Sure, here, use my Philly pen. I picked up for free from last years visit to Philadelphia.
Gonzo: Hey wait a second ( As I’m about to sign the check) Exactly what I am getting for this?
Fred: What ever do you mean? You will be a part owner of the Amazing Mets.
Gonzo: I know but do I get anything for it? I want to do more than root for them, I’m about to hand over a lot of money. Bottom line: what do I get to do?
Fred: I understand! First you will have a box seat in the front row for every game, just give me a few minutes to take the nameplate off it, but if your first name is Bernie, I could leave it on.
Gonzo: Great! But how about some other things like……control?
Fred: I don’t understand.
Gonzo: Do I get a say in who we can sign for a free agent? How about trades? Maybe a a little input about the concession stands?
Fred: All good ideas but no…no….and no.
Gonzo: Do a get a say in ticket prices?
Fred: Absolutely not.
Gonzo: Will I get my own SNY show?…I already have a name for it. Gonzo gone wild: A Romp through the Major Leagues in my Buick.
Fred: No, sorry, Beer Money is our number 1 show and we are thinking about expanding it to Beer Money on Ice.
Gonzo: Geez, y’know I really want to spend my money but what do I get besides a box seats?
Fred: A jersey with your name on it, a great parking space, free access to the whole field, unlimited Shake Shack meals and for the kicker……..your own office overlooking 5 exclusive body shops at Willets Point. Not to mention the fact that the Mets might be the greatest tax write off in American history.
Gonzo: Deal!
I never was good at money decisions but the point I’m looking to make here is this: Why would someone invest in the Mets with no control over anything whatsoever? I love the Mets and I sincerely hope the Wilpons can get out under this mess but honestly, if I’m a potential buyer, what do the Mets have to offer me? A share in the profits? My name on a seat?
According to Jeff Wilpon, there are people that are interested. I’m just curious to know who and what kind of deal they are willing to settle for.
Your thoughts?
45 comments
metsfan4decades
2/18/2011-9:29am at 9:29 am (UTC -4)
I don’t know anything about these type of business deals but I understand that the Mets are practically the only franchise left that’s currently owned 100% by one family.
In that case…what – exactly – are the other partial investors getting for their money in the other 29 franchises? Sounds to me like each one has a majority owner, even though ownership is somewhat diversified. So the minority owners, I’m assuming, are not getting a say in the running of the team, FA acquisitions, concession stand offerings, etc. That leaves me to believe it’s a partial stake strictly for investment purposes.
Wouldn’t minority ownership in the NY Mets be all about an investment as well?
If yes, are we saying here that the Sterling Mets appear to be broke and it would be some years before investors saw any return on their investment(s)?
saltygary
2/18/2011-9:36am at 9:36 am (UTC -4)
You get to have a opinion and a chance to profit off of the money you invested. Think of it like buying a house as an investment property. Most of these franchises are very profitable especially a baseball team in NY. For someone that has that kind of money it’s a no-brainer. Also many people that have that kind of money are busy doing other things, they are just looking for profit centers and diversification.
TRS86
2/18/2011-9:51am at 9:51 am (UTC -4)
Salty beat me to it. It’s called an investment for a reason. Honestly think of it as 250M shares of stock in the Mets. That is when the Mets as a company is desperate and selling that stock at a cheap rate. If the Mets as a stock does well then those 250M shares will be worth much more in the future. When you invested in IBM you did not get to make decisions but hey you got a quarterly news letter. I realize that this is a lot of money but a billionaire most likely has that much money tied up in other stocks as well. Perhaps they view the Mets under Sandy as an investment that is safe.
Also the angle of if the Mets decide to sell then they could be in position to increase their share.
fongy2
2/18/2011-9:55am at 9:55 am (UTC -4)
I think the proble is that with the Wilpon’s you’d be a true minority
share holder, very little say running things day to day and always overshadowed by the lone majority holder (Freddy).
Just about any one with the means to buy in at a quarter of a billion
is going to have and ego and want to be the face of ownership,
like Steinbrenner was with the yanks.
kistics
2/18/2011-10:05am at 10:05 am (UTC -4)
I’m not sure if you would invest in a baseball team for increase in team value like buying stocks. I would think if you were buying part of a team, you would want share of profit as well.
TRS86
2/18/2011-10:23am at 10:23 am (UTC -4)
Who is to say that they would not get a share of the profits? I am sure they would. I would guess they would get 20-25% of them if that is the % they own.
saltygary
2/18/2011-10:23am at 10:23 am (UTC -4)
How about free chicken tacos?
kistics
2/18/2011-10:59am at 10:59 am (UTC -4)
It’s giving up a lot….
kistics
2/18/2011-10:02am at 10:02 am (UTC -4)
You would have a great pickup line.
“Hey, I own the NY Mets. You wanna come check out my crib?”
Besides that, I think it’s the profit you would get on your investment. I don’t know how profitable baseball franchises are, but I’m assuming you would get decent returns on your investments.
But if I were an investor buying part of the Mets, I would certainly ask for shares in SNY which I believe is very profitable.
fongy2
2/18/2011-10:11am at 10:11 am (UTC -4)
I think “Hey, I’m a billionaire, wanna check out my crip” is a pick-up
line that likely works REAL well already.
Just sayin’………….
kistics
2/18/2011-10:14am at 10:14 am (UTC -4)
Good point…
gategem
2/18/2011-3:57pm at 3:57 pm (UTC -4)
I recall reading an old issue of the Baseball Digest where they recanted the story about the owner of the Boston RedSox, Harry Frazee, who sold Babe Ruth to the New York Yankees in the off-season of 1919-1920. As the story goes Harry Frazee was trying to impress an attractive young lady by showing her the ballpark he owned, Fenway Park. So he hailed a cab and he and the attractive female were chauffeured to the ballpark. The cab driver overheard Mr. Frazee boast to the girl that he owned both the team and the ballpark. When Freeze stepped out of the cab so did the cab driver who asked Mr. Freeze if he was the one that sold Babe Ruth to the Yankees. When Freeze nodded in the affirmative he was decked by the cab driver.
metsfan4decades
2/18/2011-10:28am at 10:28 am (UTC -4)
Off subject:
Saw this tweet from Heyman:
SI_JonHeyman: enjoyed my 2 days w the crazy #mets beat writers. 2 of them bet on who’ll live longer. unsure how winner collects
***************************
So on top of everything else, we have the craziest beat writers to boot?
LOL….okay……
kistics
2/18/2011-10:58am at 10:58 am (UTC -4)
I wonder who those 2 are… Ed Coleman maybe?
Ceetar
2/18/2011-11:06am at 11:06 am (UTC -4)
Probably Popper and Ledger (can’t remember the guys name) or Lennon. Those 2-3 are always the ones joking around with each other.
btw, one of them won a bet with Rubin about whether Ollie would make it to Spring.
metsfan4decades
2/18/2011-11:12am at 11:12 am (UTC -4)
So did Rubin win or lose that bet?
Don’t know why anyone would bet against Ollie making it to ST anyway. It was a no brainer, given his contract. Other than appeasing the fan base, there was no reason to release him prior to going through ST.
I’m really hoping Rubin is completely wrong on his 80 Win prediction.
Ceetar
2/18/2011-11:16am at 11:16 am (UTC -4)
Rubin lost.
And he will be wrong.
It was Puma and Popper on the bet btw.
kingman 26
2/18/2011-11:22am at 11:22 am (UTC -4)
Hmmm, Rubin was wrong on something?
Very interesting, and clearly unprecedented.
And he will be wrong on the 80 wins too.
Probably more like 75.
TRS86
2/18/2011-11:33am at 11:33 am (UTC -4)
Kingman, why do you think the Mets will win less this season than last? I understand the loss of Johan but do you really expect Bay, Reyes and Beltran to give the same production as last year?
Mr North Jersey
2/18/2011-11:40am at 11:40 am (UTC -4)
FWIW I can see the Mets just winning 75 as well. It’s not that big a stretch I think.
TRS86
2/18/2011-11:43am at 11:43 am (UTC -4)
LOL, I had to go figure out what FWIW means.
It’s not a big stretch but saying that would also say it’s not a big stretch to see them win 85.
metsfan4decades
2/18/2011-11:40am at 11:40 am (UTC -4)
No, not if healthy for most of the year. If they are, I’m willing to bet the offense production has to be better than last year.
And offense was our bigger problem. We lost 30 one run games last year. Couldn’t get that big hit to save their lives.
gategem
2/18/2011-4:02pm at 4:02 pm (UTC -4)
Perhaps it’s because their starting pitching is extremely suspect and it’s difficult to predict how Beltran and Bay will bounce back from their injuries.
stickguy
2/18/2011-4:10pm at 4:10 pm (UTC -4)
it must be in a met fans DNA to always think that if I guy had a good year, it must have been a fluke and he could never do it again (as opposed to assuming that he is good, and will!)
metsfan4decades
2/18/2011-11:39am at 11:39 am (UTC -4)
I knew someone was going to go less instead of more…
stickguy
2/18/2011-11:41am at 11:41 am (UTC -4)
Knog, I would be happy to bet you an autographed Bone Cellar CD vs. my green dog that the mets will win more than 75 games this year.
no chance they win less than last year. The real +/- shold be set at 85.
TRS86
2/18/2011-11:44am at 11:44 am (UTC -4)
I would not go that high at all. I would say the +/- should be exactly how many wins they got last year.
stickguy
2/18/2011-11:51am at 11:51 am (UTC -4)
then I will be happy to take the over.
I just based the number on what I think the team is reasonably capable of doing, at this point, with the talent on hand.
TRS86
2/18/2011-11:54am at 11:54 am (UTC -4)
Right but the same thing could be said for the last 3 years.
stickguy
2/18/2011-12:01pm at 12:01 pm (UTC -4)
can’t live in the past my man.
different team, different time.
kingman 26
2/18/2011-12:01pm at 12:01 pm (UTC -4)
TRS and Stick–
First off, Dickey and Pelf repeating last year is a HUGE if. Niese was awful the last two months of the year. Those are our “sure things.”
We have no idea what we will get from Reyes/Beltran/Bay.
We have no idea if the June/July or the Aug/Sept Pagan will be the one we see.
The pen? Potentially very good, potentially mediocre.
Hey, I love the future, but this year we have VERY little starting pitching and basically, other than Wright, and entire lineup of ifs.
Love the team, very excited about the new start with Collins, looking very forward to a hustling team which will be getting younger, but not expecting much. To me, it is 1983. Clearly on the right path, but clearly a year away.
Let us remember that we have 54 games against PHIL/ATL/FLA, all of who will probably be better than us.
We were 21–32 against them last year.
stickguy
2/18/2011-12:05pm at 12:05 pm (UTC -4)
If all that stuff goes wrong and they struggle to finish with 75 wins, then frankly the future sucks monkey balls.
you can pretty much expect the entire roster to be blown up, and a couple years of 100 losses while young guys (maybe) learn on the job.
I really don’t see any reason to expect success in 2012 unless the guys they have now show something positive in 2011, because there will not be that many (potentailly) changes, other than a couple of their best players leaving.
kingman 26
2/18/2011-12:11pm at 12:11 pm (UTC -4)
Stick, I would never make a bet where I would have to root for the Mets to lose. Never.
But I do think that 75 wins is the realistic over/under.
stickguy
2/18/2011-12:20pm at 12:20 pm (UTC -4)
serious question. And I know there are “ifs”. every team has ifs.
but looking at what happened in 2009, and all the issues/problems/etc. in 2010, why do you think they are going to be even worse in 2011 than last year (and just as close to 2009 levels)?
are you assuming everything possible goes wrong? Since an over/under whould be what you would get in a normal situation (not worst case).
metsfan4decades
2/18/2011-12:24pm at 12:24 pm (UTC -4)
I know you weren’t asking me but….
We would really have to have some incredibly back luck again (i.e. lengthy injuries to key players) to be in the position we were in 2009.
I keep going back to the 30 losses in one run games. If we cut that in half even, we’d make up ground right there.
Not saying though the possibility doesn’t exist for our SP to not keep us close enough to win these one run games. To me, the key is going to be the pitching – it’s the biggest question mark.
kingman 26
2/18/2011-12:30pm at 12:30 pm (UTC -4)
Good question and a good way to look at it.
Two major factors:
–I guess to me, I think that without Johan we lose a bunch of games we did not lose the last two years. He is being replaced by Young or Gee or Capuano?? Johan started 29 games last year and 25 in 2009. You may be underestimating the HUGE factor this is.
–Our division is going to be brutal. You ARE underestimating the HUGE factor THIS is.
Minor factors:
–Will Dickey and Pelf be as good as 2010?
–Will Ike be as good as 2010?
–Will the pen replace Taka and Feliciano’s contributions?
I know we all like to pretend that Jerry’s absence is automatically good for lots of wins; I don’t think this will turn out to be true.
The pitching staff has the potential to be really bad.
TRS86
2/18/2011-12:29pm at 12:29 pm (UTC -4)
No way do they finish with less than 75 wins. Just can’t see it. A lot more than went wrong last year would have to go wrong this year. I understand your thoughts on what went right last year but in my opinion more went wrong than went right.
kingman 26
2/18/2011-12:31pm at 12:31 pm (UTC -4)
Still think that missing Johan and 54 games with PHIL/ATL/FLA is brutal, and may compensate for the things that go better this year.
The offense might be hugely better, but we may lose a lot of 8-6 games.
stickguy
2/18/2011-12:39pm at 12:39 pm (UTC -4)
It just seems to me that there is a tendancy to assume the worst, and use that as the baseline expectation.
but normally, everything does not go perfectly for a team, but neither does everything go wrong (2009 being the exception!)
so, say the worst case, regress from 2010 and approach 2009 is 75 wins.
but, best case, no injuries, some unexpected great seasons, and they can win 91 and the WC.
so split the difference and you are stiing at 83, assuming some goes right, some goes wrong (IOW, a normal year). and the 8 wins from that is probably a normal standard deviation amount for a team year to year.
and if I am underestimating not having JOhan make 20% of the teams starts, then others are underestimating not have Maine and Ollie make 10% again this year!
kingman 26
2/18/2011-11:20am at 11:20 am (UTC -4)
Will, if someone gave $250 mil for 25–30% of the Mets right now, and in 5 years the US economy is booming and the Mets are in the spot they were in in about 1986–1988, that $250 mil would be worth maybe $350–400 mil and probably easily cashed in to a new buyer.
Prismo
2/18/2011-12:19pm at 12:19 pm (UTC -4)
I’ll tell you what, I wouldn’t do it, especially if I had no say in the team.
Basically without say, it’s just like investing $250M in ONE company’s stock. Talk about a lack of diversification.
The risk in the investment is ***high*** – payroll’s been decreasing and is expected to decrease further, same with attendance numbers. The economy is in the shItter, but it doesn’t sound like an investor is really getting any discount on the stake!
I’ve consistently used the Orioles of the late 90s/early 00s as a comparison point.
Their value dropped from $351M in 1999 to $296 in 2004 (dropped every year) and only came back to $359 in 2006 (using a discount rate, I assume that’s really losing money as that’s only a 2.3% gain in an 8 year period).
So if I’m going to invest 1/4 of a BILLION dollars in one company, I better damn well have a say about what goes on in that company.
stickguy
2/18/2011-12:28pm at 12:28 pm (UTC -4)
there is a problem with the orioles example. The #s you used are someones estimate (Forbes?) of what it would be worth. But the team was not sold (or put on the market), so no one really knows what it could be had for.
MLB teams are in very limited supply. And ones in major markets, with huge fan bases, that have the potential to rake in a ton of money, are in even shorter supply (and very rarely available).
So if you want in, you have to grab the opportunity when it pops up, because it may not come around again for a long time (at least not in NY)
And anyone buying in will have had the accounting work done to make sure it is going to turn a profit for them (and remember, there is book profit, and there is wht you really make!).
Don’t discount the rights of first refusal that would have to be in place for a deal like this.
Like others have said, every team has limited partners. People must do it for wom reason! But maybe what the Mets need is not 1 guy, but rather say 25 investors that will each put up $10mill to get into the action.
it might also have to be at a discount to get them to bite. say the real value is 1 bill. But if desperate, Fred could sell 25% for 200mill (at 20% discount). That should get some action.
metsfan4decades
2/18/2011-12:29pm at 12:29 pm (UTC -4)
Heard an investment analyst talking yesterday on the radio where he stated something to the effect that you get a pretty good return on monies invested in a ML baseball team. Especially if you leave it there long term. Said something about it being a pretty safe bet.
I know next to nothing about billion dollar investments and companies but I would have to think that ‘ownership by committee’ type mindset when it comes to a ML team has to be a recipe for disaster.
stickguy
2/18/2011-12:40pm at 12:40 pm (UTC -4)
unlike most companies you can invest in, while the wilpons might go broke, the Mets aren’t going to go out of business.
gategem
2/18/2011-4:13pm at 4:13 pm (UTC -4)
No, they won’t go out of business, but like the Texas Rangers they could go bankrupt.