The New York Mets announced today that they have broken off negotiations with David Einhorn.
Here is the statement from both the Mets and from Einhorn courtesy of CBS/WFAN
Mets statement:
The New York Mets’ Owners announced today that their period of exclusive negotiations with David Einhorn regarding a minority, non-operating interest in the Mets has expired and Ownership has decided not to extend the exclusive negotiating period any further. After months of negotiation, the parties were unable to reach agreement, and Mets Ownership has decided to explore other options.
Ownership has provided additional capital to cover all 2011 losses and is moving forward with the necessary resources to continue to operate the franchise. Ownership will explore other strategic transactions and is under no financial pressure to do a deal on any particular schedule.
“We are very confident in the team’s plans – both off and on the field,” said Mets Chairman and CEO Fred Wilpon. “We will engage with other individuals, some who have been previously vetted by Major League Baseball, along with other interested parties, regarding a potential minority investment into the franchise. My partners and I thank David for his interest in considering this opportunity and wish him well in the future.”
Einhorn statement:
“I am disappointed to announce that I will not be purchasing an ownership interest in the New York Mets baseball team at this time. It is clear that it will not be possible for me to consummate the transaction on the terms that the Sterling-Mets organization and I originally agreed to several months ago. The extensive nature of changes that were proposed to me at the last minute has made a successful transaction impossible.
“I want to thank the entire Mets organization and Major League Baseball for their efforts. This experience will always be a happy memory for me because of the Mets’ fans. A good number of you have reached out to offer me encouragement. I will always be touched by the warmth that you showed me.”
21 comments
SaltyGary
9/1/2011-3:18pm at 3:18 pm (UTC -4)
Let the bye bye Reyes anxiety begin. You know I am fine with it. No need to pay a guy 100m to only play half seasons.
Darknova306
9/1/2011-7:19pm at 7:19 pm (UTC -4)
I’m right there with you, Salty. I’ve been moving over to the ‘don’t sign Reyes’ camp over the past year and a half as his legs continue to give him trouble. The absolute minimum he’ll get, in my eyes, is 5/90, and he’ll almost definitely get a good deal more. I love him, but his game is entirely based on speed and those leg injuries keep popping up. Too bad he isn’t playing every game of every season like he was doing for a few years early in his career. I say “bye bye, let’s keep turning this roster over”.
SaltyGary
9/1/2011-7:44pm at 7:44 pm (UTC -4)
I love him too. His first half was one of the most impressive Mets performances ever. Why can’t we as fans appreciate the type of player he is but understand that he is not capable of performing for a long period of time. This is not a recent issue over the last couple of years. These are issues that have affected him since the minors.
Anonymous
9/1/2011-4:11pm at 4:11 pm (UTC -4)
The Mets were looking for a minority partner due to a 1 billion dollar lawsuit hanging over their heads. Since the deal was reached, Picard’s lawsuit has shrunk to around 300 mil so the need for Einhorn became less.
Sandy has re-stated the Mets will have a payroll from 100-110 mil next season which means that they certainly will have a high enough budget to retain Reyes and make some other small additions.
Anonymous
9/1/2011-4:41pm at 4:41 pm (UTC -4)
Agreed. All it means is they no longer needed Einhorn, so they pushed him out.
There is no one worth spending on other than Reyes, so there wasn’t going to be anyone signed anyway.
As long as this doesn’t stop them signing Reyes, this is pretty much a non-story for on the field stuff.
Anonymous
9/1/2011-4:44pm at 4:44 pm (UTC -4)
exactly. We might get a cheap SP if Santana is not making progress or a 4th OF like DeJesus but other than that, its Reyes and the bullpen
Anonymous
9/1/2011-4:52pm at 4:52 pm (UTC -4)
I will say, though, you can throw the idea of Darvish out the window..
SaltyGary
9/1/2011-5:33pm at 5:33 pm (UTC -4)
Not to always be the pessimist around here, but I don’t know why people are comfortable with this capital falling through. That 100-110 statement for payroll is lower than 120 that they were throwing around previously. The Einhorn capital was supposed to pay the $25 million loan to MLB along with keeping operating expenses going. Wilpon’s are in serious debt and the minimum that they will pay Picard is 300m. Financial instability is back on the table all winter long for this franchise.
Anonymous
9/1/2011-5:47pm at 5:47 pm (UTC -4)
I would say if they really really really needed the money, then all these last minute changes wouldn’t have popped up, or at least as much of it. When you go from having to possibly pay a billion to down to 300 million, it’s takes a little stress off, you know? And while we know paying a billion was never going to happen, I can guarantee they had to plan for the worst and get their crap in line as best they could.
Overall, it still sucks. It still hampers the team from upgrading the BP with a higher costing higher ceiling type guys But I don’t see it hamstringing the team. It still has Alderson is basic small ball mode. But maybe those restrictions keep the focus on rebuilding the farm system and developing cheap, young, good players. Not the worst side effect.
If only it will crush the Wilpons into selling…
SaltyGary
9/1/2011-6:01pm at 6:01 pm (UTC -4)
Look, for me this is a blessing is disguise. I want the Wilpon’s gone, I don’t want to re-sign Reyes and I want the team to be in a full re-build mode. I am also smart enough to understand that this wish list is extreme and very much an outlier to what most of the fanbase wants. This fanbase is going to be freaking out if there isn’t a good turnaround by 2013 and I personally think it won’t even begin until them and I am willing to be patient for the long term good.
My point, is how is this a good thing. They are still losing money and they still have a crap-load of debt. Not needing the money all of the sudden makes no sense at all to me.
SaltyGary
9/1/2011-5:55pm at 5:55 pm (UTC -4)
So far this year, Met’s attendance is down “213,838″ (third worse in the league). If you place a $50 per person cost it comes to almost 11million less than last year which may be a conservative estimate. Seeing the team lost $50m on last year alone, this capital was sorely needed. Really trying not to be “Mr. Doom and Gloom”, but I would not believe anything the Wilpon’s say about this matter. They are in the s*** right now. Think the attendance is going to have a major bounce back next season?
Anonymous
9/1/2011-6:01pm at 6:01 pm (UTC -4)
they are going to get the money, just now that they need less, its going to be from their buddies and family not from an outsider.
SaltyGary
9/1/2011-6:05pm at 6:05 pm (UTC -4)
This is management of Sterling:
http://www.sterlingequities.com/about/leadership.php
This is the family and they all got hosed. They lost their ability to maintain their standard of living, the entire family! Why do you feel they need less money than at this point at the beginning of the year?
Anonymous
9/1/2011-6:31pm at 6:31 pm (UTC -4)
because the potential damage from the lawsuit is far less.
If they really needed the money that badly, then why did they bail on Einhorn??? Einhorn has been sitting here waiting to make a deal and the Wilpons have been slowly pushing him out the door…
SaltyGary
9/1/2011-7:37pm at 7:37 pm (UTC -4)
your logic is based on possible additional debt, not current. Right now they have a loan out to JP Morgan for 430M they also have to pay 30m in interest payments plus 50m a year to cover the bonds that funded the stadium. What is considered the total debt by the start of the season is $850 which is probably close to what the team is worth. Add the 25m loan to MLB. Add a minimum of 300m to give back in fictitious profits and maybe more (which we won’t know that the decision will be until 03/2012). Add in what will easily be 50m in loss based on attendance (50m was last years figure and attendance has slid over 200k). The team is seriously underwater and the final total will not be until spring training at the earliest.
1st, How can they possibly be allowed to sign Reyes for 100m?
2nd, Who in the world would give them money unless the can get heads up full ownership.
SaltyGary
9/1/2011-7:39pm at 7:39 pm (UTC -4)
And pure speculation here but maybe the deal fell through because MLB and Wilpon’s know full well they need to outright sell and would rather put the full team up for bid instead of letting Einhorn slide in on the cheap.
Anonymous
9/1/2011-8:15pm at 8:15 pm (UTC -4)
From MLB.com:
“Negotiations between the Mets and David Einhorn regarding Einhorn’s purchase of a minority stake in the team ended Thursday, as both sides announced that they could not reach an agreement. Einhorn, a Manhattan hedge-fund manager, had previously pledged to pay $200 million for an unspecified minority stake in the team. A minority investor has been sought by the team as a result of a lawsuit it is facing regarding the Bernard Madoff financial scandal. The Mets are fighting a $1 billion clawback suit brought against them by the trustee for the victims of the Madoff Ponzi scheme.
“I am disappointed … that I will not be purchasing an ownership interest in the New York Mets,” David Einhorn said. (Getty) The Mets said in a statement that the ownership group has provided additional capital to cover all 2011 losses. ”We are very confident in the team’s plans — both off and on the field,” said Fred Wilpon, the team’s chairman and chief executive officer. “We will engage with other individuals, some who have been previously vetted by Major League Baseball, along with other interested parties, regarding a potential minority investment into the franchise. My partners and I thank David for his interest in considering this opportunity and wish him well in the future.” Einhorn, the president of Greenlight Capital, Inc., issued a statement regarding the dissolution of the deal and later took questions from reporters as part of a conference call. Einhorn, 42, did not address specifics of the deal due to a confidentiality agreement, but speak in generalities about the negotiations. He said in May that he was excited to reach agreement, terming it “a dream come true for me and my family.” Einhorn said that he and the Mets began an exclusive negotiating period and came to an agreement on all outstanding issues, including certain modifications, in July. He believed the deal was ready to close until the Mets sent “extensive” changes to the agreement last week. At that point, he said that he preferred to walk away rather than renegotiate. He suggested that the changes had nothing to do with his level of participation in team decisions. ”My position relating to the structure relating to control has been completely unchanged from my original submission,” he said. “Not one word, not one bit, not one aspect has changed.” Einhorn said that much of the press coverage regarding the deal has been “inaccurate and unhelpful,” and he termed the dissolution “a sad outcome.” Einhorn also said that there would be no litigation as a result of the deal and that he’d remember the experience fondly due to his interaction with fans of the team, who had seemingly welcomed him as a part of the ownership group. ”I’ve negotiated a lot of deals. A lot of them get done and some of them don’t,” said Einhorn. “When they fall apart, they always fall apart at the end.” Spencer Fordin is a reporter for MLB.com. This story was not subject to the approval of Major League Baseball or its clubs.”
Anonymous
9/1/2011-8:26pm at 8:26 pm (UTC -4)
From MLBTR:
“Earlier today we learned that Wilpons’ deal with David Einhorn is dead, so now let’s recap the rest of the news surrounding the Amazins…
In the wake of the Einhorn non-deal, the team may now try to sell ten ownership shares for $20MM each to match the $200MM they were expected to receive from Einhorn, report Gregory Zuckerman, Matthew Futterman, and Brian Costa of The Wall Street Journal.GM Sandy Alderson indicated to Adam Rubin of ESPN New York that the team’s payroll will go down next year. “[The] fact is, even at $100 million or $110 million, we’re still in the upper echelon of payrolls,” said Alderson. The Mets started the year with a payroll of about $140MM.
Rubin reports (via Twitter) that lefty reliever Danny Ray Herrera was on the list of players the team chose from to complete the Francisco Rodriguez trade. The Mets have two players to be named later coming from the Brewers, though the identities of both are still unknown.”If there’s something like that out there, that would be great,” said Chris Capuano to Rubin when asked about signing a multi-year deal as a starting pitcher after the season. “If it’s a one-year deal or something, at this point in my career I’m excited to have the opportunity to go out there as a starting pitcher. I’m not as concerned with the contracts and everything else. As long as I have an option next year to start, I”ll be happy.” Capuano has a 4.38 ERA in 26 starts this year.”
“The Mets announced that they acquired Adrian Rosario and Danny Ray Herrera to complete the trade that sent Francisco Rodriguez and cash to Milwaukee in July. The Mets and Brewers initially agreed that two players to be named would join the Mets in the deal, which is now complete.
Rosario, a 21-year-old right-hander, spent the 2011 season at Class A. He started 14 games and worked out of the bullpen for a 4.32 ERA with 7.3 K/9 and 4.0 BB/9.
Herrera, a 26-year-old, left-hander, has a 3.94 ERA with 6.3 K/9 and 3.3 BB/9 in 93 2/3 innings of work for the Reds and Brewers in his four-year MLB career. He spent most of the 2011 season at Triple-A, where he posted a 2.20 ERA with 7.9 K/9 and 2.2 BB/9 in 61 1/3 innings.
MLB.com’s Adam McCalvy first reported the deal (on Twitter).”
Anonymous
9/1/2011-8:41pm at 8:41 pm (UTC -4)
This is looking like a pure salary dump with these guys they got in return.
Anonymous
9/1/2011-9:21pm at 9:21 pm (UTC -4)
rosario is appealing enough to have been a rule V pick.
Anonymous
9/1/2011-9:32pm at 9:32 pm (UTC -4)
Here’s to hoping he turns into a pitching version of Uggla.