The proposed sale of Major League Baseball’s New York Mets to hedge fund billionaire Steve Cohen, said to be troubled for several days, is now officially dead. But the club’s current owners, Fred and Jeff Wilpon, now intend to pursue a new sale.
MLB commissioner Rob Manfred, speaking February 6 at the end of league business meetings in Orlando, Florida, struck the first confirmation of the troubled negotiations between the Wilpons and Cohen, saying “it’s my belief that that transaction is not going forward.”
Later that night, Sterling Equities, the Wilpon-controlled firm that holds the Mets, and Cohen released their own statements indicating the prospective deal for the Mets valuing the club at a league-record $2.6bn will not happen.
“The transaction between Sterling and Steve Cohen was a highly complicated one,” the statement from Sterling Equities read. “Despite the efforts of the parties over the past several months, it became apparent that the transaction as contemplated would have been too difficult to execute. Sterling intends now to pursue a new transaction and has engaged Allen & Company to manage that process.”
Allen & Company, a New York-based investment bank, has been involved in many other team sales across US pro team sports.
“I’m very disappointed we couldn’t work out a deal,” Cohen said in a statement. “I gave it my best shot.”
Amid all the confirmations of the deal collapse, questions are now left as to what happened and why.
Cohen, already an 8 per cent shareholder in the Mets, was originally in line to take on an 80 per cent stake in the team and succeed current majority owner Fred Wilpon by 2025. But that elongated transition time, something the Wilpons were said to want to extend even further, raised many eyebrows around the industry, as it far from the normal deal structure for team sales, even those with path-to-control provisions.
The core dispute, according to multiple reports, is the role of the Wilpons after Cohen would have taken equity control of the franchise. Cohen, not surprisingly, was favoring more ceremonial roles for the Wilpons, who instead wanted to remain in much more active senior management-level functions.
Manfred, however, quickly rose to the defense of the Wilpons.
“I can tell you – and it’s based on conversations with the buyer and the seller on an ongoing basis – the assertion that the transaction fell apart because of something that the Wilpons did is completely and utterly unfair,” Manfred said.
It is not known whether the Wilpons’ new engagement with Allen & Co. will lead to a sale of a controlling share of the club, or whether another protracted transition will be part of the deal.
The Wilpons have been down a similar road before regarding a possible sale with the Mets. Back in 2011, another hedge fund executive, David Einhorn, neared a $200m deal for minority share of the Mets that also included an eventual path to majority control. But Einhorn blamed the Wilpons for late and unexpected changes in transaction terms, and that deal ultimately fell apart.
“I received a new round of comments on our definitive agreement,” Einhorn said at the time. “I was very surprised to see that many of the provisions of the deal, that were in place (for three months prior), had been changed … A week ago I thought this deal was in great shape and would be done very soon.”
The Cohen saga extends a turbulent offseason for the Mets that also has seen the abrupt departure of former manager Carlos Beltrán, who was tied into MLB’s electronic sign-stealing scandal.