By Howard Koplowitz
The financially strapped owners of the New York Mets have selected hedge fund manager David Einhorn as their preferred partner to sell a minority stake in the club worth $200 million, the team said last Thursday.
The agreement comes as Mets co-owners Fred Wilpon and Saul Katz, who lost $500 million in the Bernard Madoff Ponzi scheme, are fighting a $1 billion lawsuit from the trustee of the Madoff bankruptcy.
The $200 million stake is worth roughly 33 percent of the team, which means Wilpon and Katz will remain majority owners of the Flushing franchise.
The Mets need cash to cover operating expenses and pay off a $30 million emergency loan from Major League Baseball. If they wind up losing the lawsuit, the owners may be forced to sell off their remaining stake in the team.
Meanwhile, U.S. Rep. Gary Ackerman (D-Bayside) introduced legislation to provide assistance and expand protections to Madoff victims.
“If enacted, this legislation will go a long way towards finally providing the relief that the innocent victims of Bernard Madoff and other Ponzi scheme swindlers deserve,” Ackerman said. “More than 2 1/2 years since the Madoff fraud was uncovered, too many victims are still hanging in limbo. Prohibiting claw backs, extending insurance to indirect investors and defining net equity in a fundamentally fairer manner will finally allow victims to receive some much-needed justice. Congress has a responsibility to come to the aid of those defrauded by these unconscionable scams, and that is what this legislation does.”
Wilpon and Katz have insisted they are victims of the Madoff scheme, while Madoff trustee Irving Picard is alleging the owners knew their gains were ill-gotten.
In an article appearing in The New Yorker, Madoff said Wilpon was not stock market savvy and that he could not have known Madoff was duping investors.
“We are very excited about David joining our ownership groups for several reasons. David’s investment immediately improves the franchise’s financial position,” said Mets principal owner Fred Wilpon.
“Equally important, David’s intelligence, integrity and success in both business and civic affairs provide us with another prospective in evaluating what is best for this organization and our fans, and we welcome his input,” Wilpon said. “In partnership with David, we look forward to achieving our ultimate goal of again becoming World Series champions.”
The sale of the minority stake is subject to approval from MLB and Einhorn would have no decision-making authority on the team’s operations or transactions.
“Having an opportunity to become part of the Mets franchise is exciting beyond my wildest childhood dreams,” said Einhorn, president of the private investment firm Greenlight Capital Inc. “I spent my first seven years living in New Jersey and rooting for the Mets. In 1975, I even dressed in a homemade jersey as a Met for Halloween. I have been a baseball fan for my entire life and have enjoyed teaching the game as the coach of my daughter’s Little League team.
“I look forward to partnering with the Wilpon and Katz families through the good seasons, the tough seasons and especially the championship seasons,” Einhorn said.
The announcement came after Wilpon shot himself in the foot in the same New Yorker story that quoted Madoff when Wilpon called the Mets “a s—– team.”
Wilpon also took shots at Mets stars David Wright, Carlos Beltran and Jose Reyes.
He said Wright was “a very good player” but “not a superstar.”
Wilpon said Beltran, who has one year left on a seven-year, $119 million contract with the Mets, is “65 to 70 percent of what he was” and criticized himself for signing the outfielder to such a lofty deal based on the 2004 playoffs, when Beltran hit eight home runs with the Houston Astros.
“We had some schmuck in New York who paid him based on that one series,” Wilpon said.
Wilpon said Reyes “thinks he’s going to get Carl Crawford money” in free agency, referring to the seven-year, $142 million contract Crawford signed with the Boston Red Sox.
“He’s had everything wrong with him,” Wilpon said, referring to Reyes’ injury woes. “He won’t get it.”
Of the players brought up in the article, only second-year first baseman Ike Davis received praise from Wilpon, yet he still took a swipe at the team.
“Good hitter,” Wilpon said. “S—– team, good hitter.”
Reach reporter Howard Koplowitz by e-mail at hkoplowitz@cnglocal.com or by phone at 718-260-4573.
