Some might’ve wondered what would possess an otherwise competent financial wizard like hedge fund manager David Einhorn to pump $200 million of his own money into the New York Mets without any voting rights or piece of the SNY action, particularly the same week Fred Wilpon characterized the club as “snake-bitten” and “bleeding cash” in successive interviews. ESPN.com’s Adam Rubin reveals more specifics surrounding Einhorn’s arrangement with Wilpon and Saul Katz, and you might say the head of Greenlight Capitol is making a somewhat measured bet against the majority shareholders’ surviving their bought with Irving Picard.
Einhorn has agreed in principle to purchase roughly 33 percent of the team for $200 million, which will infuse cash and keep the organization solvent in the immediate future. In three years, according to the source, Einhorn has an option to up his stake to 60 percent, although principal owner Fred Wilpon and his family have an opportunity to block Einhorn from gaining that majority stake.
The source said the Wilpons can stop Einhorn from gaining the majority share essentially by returning Einhorn’s initial $200 million investment. In the latest incarnation of the deal, if the $200 million is returned Einhorn’s share of the team will be reduced from a third to a sixth. It was originally reported that Einhorn would retain the 33 percent share of the team.
So, in essence, for the opportunity cost and other associated risks of loaning the Wilpons $200 million for three years, Einhorn would get one-sixth of the team.