The New York Mets are such a toxic asset that their current book value is -$225 million. So who in his right mind would want to become a minority owner in this? Billionaire hedge-fund operator Steven Cohen, that's who.
Cohen, a native of Great Neck, N.Y., is said to view the team as both a bauble and a bankable. A source close to Cohen told the New York Post, "What he wants he gets. It's a trophy to him but not just a trophy. In time, it can be a real asset."
He would seem like a natural fit with majority owners Fred Wilpon and Saul Katz. For one thing, he has a great deal of something they seem to lack: money. His net worth has been estimated at $8 billion. For another, he's also under government scrutiny for some of his business dealings, just like Wilpon and Katz.
Two employees at SAC Capital Advisors have pleaded guilty to insider trading in relation to a fund overseen by Cohen. While there have been no accusations of wrongdoing against either him or SAC, prosecutors have continued their probe of the trades despite the guilty pleas by portfolio managers, Noah Freeman and Donald Longueuil. So the purchase of the beloved and beleagured baseball team would likely also purchase Cohen some welcome PR.
Wilpon and Katz's legal woes come from their deep entanglement with Ponzi man Bernie Madoff. They are so deeply entangled that the man in charge of recouping money for Madoff's victims has sued them for more than $1 billion including nearly $300 million in false profits and about $700 million in principal they withdrew. While the pair claim to be Ponzi patsies, it has forced them take out roughly $800 million in loans against the Mets and their 65 percent stake in regional sports network Sportsnet New York. That's in addition to the $25 million loan from Major League Baseball.
The current owners are already promising that their new partner will have more say than a minority owner usually does. However, that is unlikely to be enough for Cohen, and he won't be content to stay in the minority for long. A year ago, before Wilpon and Katz's financial problems were known, Cohen turned down an offer to purchase this same minority stake -- because he had no interest in being a junior partner. But now, with the financial fecal matter hitting the fans, that role puts him in the perfect position to get the whole franchise if or when the team goes up for sale.
Still Cohen would end up owning a diamond very much in the rough:
- Attendance at the brand new expensive stadium has been generously estimated around the 60 percent mark -- despite a 14 percent cut in ticket prices.
- The Mets started the season with the seventh-highest payroll in baseball, just shy of $119 million. Nearly $20 million of that is going to players cut from the team.
- The team lost eight of its first 10 home games and may still have a chance to take equal the120 loss mark set by MLB's worst team ever: The 1962 New York Mets.