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$20 Million Can Get You Lots

G-Fafif Dec 20 2011 09:56 PM

Sandomir of ye old Times on what Mets are offering prospective minority share owners. $20 Million Can Buy Quality Time With Mr. Met By RICHARD SANDOMIR It is, understandably, not the easiest sell: $20 million to own a small, noncontrolling interest in a baseball team renowned of late for losing — on the field and at the gate. Of course, the owners of the Mets, who have spent the last four months trying to line up 10 or so minority partners, have some long-term upsides to sell: the $20 million would buy 4 percent of a New York City sports franchise that, history instructs, is likely to rise in value over time. But for those perhaps uncertain over whether to part with their millions, the owners have listed some less obvious perks that would come with a share of the Queens ball club. ¶ Access to Mr. Met, the team mascot, although the degree of access is not entirely spelled out. It definitely means you, as a part-owner, can schmooze with Mr. Met at Citi Field. It’s less clear whether you could get him to come to your child’s birthday party without a fee. ¶ A formal business card, complete with the prominent designation: “Owner.” ¶ And if you are a wealthy doctor, commodities trader or real estate mogul who wants to try to swat the ball over the newly pulled-in outfield fences at Citi Field on a Mets day off, you are entitled to attend what appears to be an exclusive kind of fantasy camp: “Owners’ workout day.” These benefits of ownership are laid out in a term sheet given by the Mets’ owners to prospective partners. The document, drawn up by the club’s investment banker and obtained by The New York Times, runs to three pages, and includes a mix of complex financial arrangements and, well, simpler stuff. Parking will not be a problem for new owners, the document makes clear. A single spot at the ballpark is reserved for anyone who signs on for $20 million. The chance to throw out a game’s first pitch will be an annual privilege. Every minority owner will be assigned a team executive, who will be charged with tending to an array of possible needs, season tickets for family members among them. The document suggests, however, that those tickets will cost money beyond the $20 million investment. The sale of minority stakes in sports franchises is fairly common and can serve a variety of purposes — a sense of inclusiveness for community and ethnic groups, estate planning for an aging majority owner, and a degree of civic commitment or political influence. And, in many cases, to raise necessary cash. That is, it seems, the express goal for the owners of the Mets, Fred Wilpon and Saul Katz. The club lost $70 million in 2011; the men are facing trial over tens of million of dollars being sought by the trustee for Bernard L. Madoff’s victims; and they just lost their best player, Jose Reyes, when they were unable to match an offer from the Miami Marlins. They just obtained a $40 million bank loan to tide them over for the next several months. Since September, the owners have been trying to raise in excess of $200 million through the sale of 10 to 12 minority stakes. The owners have said publicly that interest in the stakes is high but that they have been unable to get any of the potential cash until all the needed shares have been sold. The term sheet was issued by the club’s owners early in their hunt for investors. It is the kind of document that can evolve over time. Team officials would not comment on the document when contacted by The Times. They refused to say publicly whether the terms of the offers to investors had changed, in major or minor ways. It seems unlikely that too many of the perks offered by the owners have changed radically. And that goes for some of the truly appealing ones. In the document, for instance, each minority partner will receive one luxury box at Citi Field. This would seem an unqualified benefit. That said, it could indicate the club has had trouble leasing the suites for additional money. There are 54 suites in the park that lease for $250,000 to $500,000 a year, according to one industry publication. Of course, the refusal of the team to comment on any changes to the offers inevitably results in a certain amount of guesswork. In the document, the Mets told potential investors that they could get their money back after six years with 3 percent compound annual interest included. In essence, the investment would be a loan. For the same six years, the investors would not have to invest another cent. Those details were first reported by Sports Business Journal. Curiously, Sterling Equities, the Mets’ parent company, has told potential partners that it will buy “at least” two of the units. That would mean buying stakes in a team that Wilpon and Katz already own — using money, at least $40 million of which they need for other pressing reasons. Rob Tilliss, the president of Inner Circle Sports, a financial consultant to sports teams, said, “It’s basically an affirmation to other investors that they’re stepping up and are effectively shoulder to shoulder with their new investors.” He said that the practice was designed to create momentum. But, he added, “If I were investing, I’d discount that.” Still, Wilpon and Katz’s investment in their own minority stakes may indicate that they have more money than previously believed. The document does not address one of the serious financial concerns hanging over the team’s owners: how much, if anything, they will have to pay to the Madoff trustee. “You might not have that in the initial document,” said Robert Boland, a sports business professor at New York University. “It’s something you’d negotiate for. But when you’re buying such a small share, you don’t have much power to structure a deal. At 4 percent, it’s take it or leave it.” As for the more minor details, there was no shortage of specifics: the $20 million would include one free trip with the team during the regular season (the Mets would pick the city); one free weekend’s stay at spring training; and a lot of potential lunch dates — with broadcasters and former players. A luncheon with the manager and general manager? Off-season only, the document says. Merchandise? Discounts, but not giveaways.

batmagadanleadoff Dec 20 2011 10:03 PM Re: $20 Million Can Get You Lots

G-Fafif wrote: Sandomir of ye old Times on what Mets are offering prospective minority share owners. $20 Million Can Buy Quality Time With Mr. Met By RICHARD SANDOMIR Curiously, Sterling Equities, the Mets’ parent company, has told potential partners that it will buy “at least” two of the units. That would mean buying stakes in a team that Wilpon and Katz already own — using money, at least $40 million of which they need for other pressing reasons. Rob Tilliss, the president of Inner Circle Sports, a financial consultant to sports teams, said, “It’s basically an affirmation to other investors that they’re stepping up and are effectively shoulder to shoulder with their new investors.” He said that the practice was designed to create momentum. But, he added, “If I were investing, I’d discount that.” Still, Wilpon and Katz’s investment in their own minority stakes may indicate that they have more money than previously believed. Or it could mean that Wilpon/Katz will rob Peter to pay Paul. Perhaps they're "buying" the remaining two shares, not as a showing of good faith, but because they're having trouble selling them, and MLB won't approve the $200M deal until all 10 shares are sold.

John Cougar Lunchbucket Dec 20 2011 10:03 PM Re: $20 Million Can Get You Lots

I'm just about embarrassed at this point.

batmagadanleadoff Dec 20 2011 10:05 PM Re: $20 Million Can Get You Lots

You should be.

duan Dec 21 2011 04:51 AM Re: $20 Million Can Get You Lots

It's actually par for the course in these yokes I suppose, but it is totally horrible way of constructing something. Makes you feel kinda quesy really.

metirish Dec 21 2011 05:34 AM Re: $20 Million Can Get You Lots

John Cougar Lunchbucket wrote: I'm just about embarrassed at this point. My exact same thoughts as I read the article, embarrassing.

G-Fafif Dec 21 2011 06:03 AM Re: $20 Million Can Get You Lots

The link to the Times story will lead you to a copy of the actual document listing the benefits. It's even starker in print.

metirish Dec 21 2011 06:05 AM Re: $20 Million Can Get You Lots

It does make for fun on twitter #metsminorotyownerperks , it'll be trending soon

Ceetar Dec 21 2011 06:46 AM Re: $20 Million Can Get You Lots

metirish wrote: It does make for fun on twitter #metsminorotyownerperks , it'll be trending soon I doubt it. It's the offseason, and some of the more popular memes during the season never really trended.

Ceetar Dec 21 2011 06:47 AM Re: $20 Million Can Get You Lots

Regardless, I imagine similar documents at big companies pitching to investors have the same stuff. Fail to see how it's embarrassing.

G-Fafif Dec 21 2011 07:50 AM Re: $20 Million Can Get You Lots

From the "Mets Investor Partnership Benefits" section of the actual document (as opposed to #metsminorityownerperks -- for which you're welcome). • One Empire Suite per unit (with food and drink allowance) Allowance? WTF? If I'm forking over $20 million, you bring an ox to my suite and call it crudité. And ox blood to wash it down. That's my food and drink allowance, bitch.

Benjamin Grimm Dec 21 2011 07:52 AM Re: $20 Million Can Get You Lots

I like how you get to go on a road trip, and the Mets pick which one you can go on. I give you $20 million and you tell me I can't go to San Diego, I have to go to Milwaukee?

John Cougar Lunchbucket Dec 21 2011 07:55 AM Re: $20 Million Can Get You Lots

The whole thing is laughable. I can make up biz cards that say I own the Mets.

Ceetar Dec 21 2011 08:03 AM Re: $20 Million Can Get You Lots

G-Fafif wrote: From the "Mets Investor Partnership Benefits" section of the actual document (as opposed to #metsminorityownerperks -- for which you're welcome). • One Empire Suite per unit (with food and drink allowance) Allowance? WTF? If I'm forking over $20 million, you bring an ox to my suite and call it crudité. And ox blood to wash it down. That's my food and drink allowance, bitch. That's good that you're using the whole ox. don't want to waste it. Food and drink allowance is probably the lawyer word for covering themselves in case you (anyone can order an Empire Suite after all) find a way to order a million dollars worth of stuff.

G-Fafif Dec 21 2011 08:18 AM Re: $20 Million Can Get You Lots

Nymr83 Dec 21 2011 08:19 AM Re: $20 Million Can Get You Lots

The list of so-called perks makes it clear that these people are to be treated like glorified season ticket holders with a very expensive PSL, not co-owners of the team. "Minority owner," to me, means all the rights of ownership except for making business and personnel decisions on your own. That means full access to Citi Field when YOU want, access to Alderson/Collins on demand, all the merchandise and food you want (with perhaps the one proviso that you can't just grab a bunch of swag and re-sell it.) I'm sure Prokhorav (sp?) doesn't treat JayZ this way.

G-Fafif Dec 21 2011 08:21 AM Re: $20 Million Can Get You Lots

I'm pretty sure they found an old Midget Mets membership form and used that as a template.

Benjamin Grimm Dec 21 2011 08:24 AM Re: $20 Million Can Get You Lots

I think they also require you to undergo Metsmerization.

Ceetar Dec 21 2011 08:29 AM Re: $20 Million Can Get You Lots

If I'm a potential developer for the Willets Point area, investing in the Mets to get included in any Sterling Equities development seems like a good idea. Get all buddy-buddy and probably can market a potential sports bar as "the Official Mets sports bar" or something like that.

Edgy MD Dec 21 2011 08:36 AM Re: $20 Million Can Get You Lots

Nymr83 wrote: I'm sure Prokhorav (sp?) doesn't treat JayZ this way. Sheesh, I would.

G-Fafif Dec 21 2011 08:37 AM Re: $20 Million Can Get You Lots

Benjamin Grimm wrote: I think they also require you to undergo Metsmerization. Extensive process. Includes filling batters with awkwardly rhymed terror and forever renouncing the Red Machine.

Ceetar Dec 21 2011 08:37 AM Re: $20 Million Can Get You Lots

Also, being a business and being able to hold a holiday party or business event AT Citi Field seems pretty cool. Get to be on the 'advisory' board. Which sounds like just a lot of suits being informed of the 'big boys decisions' regarding budget and what not, but three advisory board members do get promoted to the main board, so there is some sense of input. Also get second rights of purchasing those other 1% pieces if they choose to sell. Edgy DC wrote: Nymr83 wrote: I'm sure Prokhorav (sp?) doesn't treat JayZ this way. Sheesh, I would. JayZ got to help woo LeBron didn't he? well, potential minority owners get to hang out as DePodesta drafts the players.

metirish Dec 21 2011 09:35 AM Re: $20 Million Can Get You Lots

Not for nothing but Fred needs to hire Ceetar as the seller.

Ceetar Dec 21 2011 09:41 AM Re: $20 Million Can Get You Lots

metirish wrote: Not for nothing but Fred needs to hire Ceetar as the seller. i barely understand what those clauses in there mean. Initial Liquidation preference? Becomes common equity interest if not sold? It doesn't really seem like a hard-sell to me. They're selling 12 and Sterling will buy at least two. They'll get their 240 million dollars. That's what they need, and what they planned for. It's fun to laugh at the perks, but there's nothing really odd-ball or embarrassing about it. I bet Yankees minority owners get discounts on merchandise as well.

soupcan Dec 21 2011 09:47 AM Re: $20 Million Can Get You Lots

Ceetar wrote: Regardless, I imagine similar documents at big companies pitching to investors have the same stuff. Fail to see how it's embarrassing. Really? One of the minor perks is discounted merchandise, although the availability of team-branded dust- pans was uncertain .

Ceetar Dec 21 2011 09:52 AM Re: $20 Million Can Get You Lots

The alternative of course is _not_ getting a discount. Or not being allowed to have Mr. Met at your corporate event. Or not being given the right for family and friends to have first right to buy tickets to games, home and away, all-star and postseason. They're perks, not selling points.

Fman99 Dec 21 2011 10:23 AM Re: $20 Million Can Get You Lots

For $25 million can I get Mr. Met to toss my salad?

Edgy MD Dec 21 2011 10:30 AM Re: $20 Million Can Get You Lots

Ceetar wrote: The alternative of course is _not_ getting a discount. Or not being allowed to have Mr. Met at your corporate event. Or not being given the right for family and friends to have first right to buy tickets to games, home and away, all-star and postseason. They're perks, not selling points. Well, that's an alternative course. Another one is Mr. Met on call, an awesome box so tricked out that you and your guests want for nothing, seats on the team plane on all road trips, voting board membership (even if the Wilpon majority is unbreachable). Links memberships. Instant class. Ownership privileges. Not the sort of privileges you get when you join a club. But the sort of privileges you get when you join a CLUB. I agree that too much is being made of this, as is often the case when it comes to zinging the Mets. But one has to acknowledge that the itemization seems drawn up as much to make the prospect appealing as to make clear to uppity wannabes what they're not getting. Formerly treated himself as an uppity wannabe, Fred Wilpon knows this game.

themetfairy Dec 21 2011 10:35 AM Re: $20 Million Can Get You Lots

$20 million doesn't include season tickets? Cheapass management....

G-Fafif Dec 21 2011 10:39 AM Re: $20 Million Can Get You Lots

Another one is Mr. Met on call Mets thought process: "What if two of our minority share owners wants Mr. Met at the same time?" Mets not realizing: "We can probably coordinate it so we have one Mr. Met here and another Mr. Met there without the unwashed masses being any the wiser. We do have a closetful of gigantic heads, don't we? "Don't we?"

metsmarathon Dec 21 2011 10:53 AM Re: $20 Million Can Get You Lots

but how could he be in two places at one time? i mean, maybe he could send a helper, like santa for all the mall visits...

themetfairy Dec 21 2011 10:57 AM Re: $20 Million Can Get You Lots

When I wanted to book Mr. Met for MK's Bar Mitzvah on the afternoon of the 1969 40th Anniversary celebration, I was told there is only one Mr. Met.

batmagadanleadoff Dec 21 2011 11:18 AM Re: $20 Million Can Get You Lots

ESPN Sportscenter vid at bottom pf page -- talking jock and analysts riff on the $20M term sheet. http://www.sportsgrid.com/mlb/sportscenter-clowns-mets/ The real treat comes at end of video -- a link to color film footage of '62 Mets, including highlights from game against Mil. Braves, (I determined that game was played on 6/20/62). Highlights include a Marv Throneberry HR and an opposite field single by Richie Ashburn that provides a good visual sense for just how shallow (279 feet away straight down the line) the Polo Grounds left field corner was. Rod Barajas would've broken Maris's HR record in that stadium. By the All-Star break.

Ceetar Dec 21 2011 11:40 AM Re: $20 Million Can Get You Lots

Another one is Mr. Met on call Mets thought process: "What if two of our minority share owners wants Mr. Met at the same time?" Mets not realizing: "We can probably coordinate it so we have one Mr. Met here and another Mr. Met there without the unwashed masses being any the wiser. We do have a closetful of gigantic heads, don't we? "Don't we?" Well Mr. Met is only on call within the stadium. You don't get him to come to your house. So there only needs to be one. I suspect there are more though, unless they got laid off. Ownership privileges. Not the sort of privileges you get when you join a club. But the sort of privileges you get when you join a CLUB. I agree that too much is being made of this, as is often the case when it comes to zinging the Mets. But one has to acknowledge that the itemization seems drawn up as much to make the prospect appealing as to make clear to uppity wannabes what they're not getting. Formerly treated himself as an uppity wannabe, Fred Wilpon knows this game. Presumably you're not really joining the CLUB, just the club. You're being invited to pledge the fraternity, not being inducted. You're invited to apply, you're not given the job. There is also the Allen & Company "STRICTLY CONFIDENTIAL" please do not distribute statement on there that someone obviously broke. Not that the Mets should've assumed no one was going to leak it, but hey, it did take a couple of months.

Edgy MD Dec 21 2011 11:43 AM Re: $20 Million Can Get You Lots

Yeah, I'd want to be in the CLUB.

Benjamin Grimm Dec 21 2011 11:45 AM Re: $20 Million Can Get You Lots

For $20 million? You bet. That certainly deserves the full red carpet treatment. (And that's just a little less than the Doubleday/Wilpon group paid for the entire franchise back in 1980!)

batmagadanleadoff Dec 21 2011 12:12 PM Re: $20 Million Can Get You Lots

Did The Met Fairy buy into the Mets? She has access. http://www.businessinsider.com/hang-out ... et-2011-12

themetfairy Dec 21 2011 12:17 PM Re: $20 Million Can Get You Lots

batmagadanleadoff wrote: Did The Met Fairy buy into the Mets? She has access. http://www.businessinsider.com/hang-out ... et-2011-12 Damn - I was trying to keep that a secret from the rest of you....

Ashie62 Dec 21 2011 01:37 PM Re: $20 Million Can Get You Lots

Somehow I doubt the interest in these shares is high.. Lousy investment..pays no interest or dividends..Dead money.. A vanity purchase, thats all.

Edgy MD Dec 21 2011 01:39 PM Re: $20 Million Can Get You Lots

Well, they come with a guaranteed return. That's something.

Ceetar Dec 21 2011 02:10 PM Re: $20 Million Can Get You Lots

Edgy DC wrote: Well, they come with a guaranteed return. That's something. plus interest. plus guaranteed not to depreciate. there is reportedly interest though. Interesting that this would end up selling off MORE of the team than the Einhorn deal would've.

Ashie62 Dec 21 2011 02:15 PM Re: $20 Million Can Get You Lots

Does pay 3% over six years. Is the principal guaranteed?? Low risk for sure..but..

batmagadanleadoff Dec 21 2011 04:54 PM Re: $20 Million Can Get You Lots

What guarantee will the minority owners be given for their respective $20M investments against a bankruptcy?

Ashie62 Dec 21 2011 05:33 PM Re: $20 Million Can Get You Lots

that

Ceetar Dec 21 2011 07:44 PM Re: $20 Million Can Get You Lots

batmagadanleadoff wrote: What guarantee will the minority owners be given for their respective $20M investments against a bankruptcy? I don't understand the legal mumbo jumbo, but I'm pretty sure that's protected.

Nymr83 Dec 21 2011 08:26 PM Re: $20 Million Can Get You Lots

Ceetar wrote: batmagadanleadoff wrote: What guarantee will the minority owners be given for their respective $20M investments against a bankruptcy? I don't understand the legal mumbo jumbo, but I'm pretty sure that's protected. I really wouldn't assume that.

Ceetar Dec 21 2011 09:16 PM Re: $20 Million Can Get You Lots

Nymr83 wrote: Ceetar wrote: batmagadanleadoff wrote: What guarantee will the minority owners be given for their respective $20M investments against a bankruptcy? I don't understand the legal mumbo jumbo, but I'm pretty sure that's protected. I really wouldn't assume that. it's an educated assumption, and one i'm fairly confident in. Especially given that the Mets will exist in 2018.

Rockin' Doc Dec 21 2011 09:20 PM Re: $20 Million Can Get You Lots

John Cougar Lunchbucket wrote: The whole thing is laughable. I can make up biz cards that say I own the Mets. Why would you want to do that? Ownership cards would only serve to make you a laughingstock and associate you with the current clueless ownership.

Vic Sage Dec 21 2011 09:34 PM Re: $20 Million Can Get You Lots

you bring an ox to my suite and call it crudité. And ox blood to wash it down. That's my food and drink allowance, bitch. Lee Harvey, your a madman. I want to party with you, Cowboy. it's an educated assumption, and one i'm fairly confident in. Especially given that the Mets will exist in 2018. that statement indicates a fairly UNeducated assumption, or set of assumptions. Yes, it is likely the Mets will exist in 2018, but not at all a foregone conclusion that they'll be owned by Wilpon & Co, or anybody else who invests in the team under their stewardship. They could all get wiped out in a bankruptcy proceeding. And their is no way the Wilpon group could guarantee an investor otherwise, unless this "investment" is merely a priority loan that would get paid back first, but i don't think the banks they are currently in hock to up to their fucking eyeballs would ever allow them to offer such terms to any third parties. No, this is purely a vanity purchase, like a yacht with gold toilet seats. Wait. I take that back. A Yacht has actual value; gold toilet seats can be melted down, or at least shat through. These are just pimped out season ticket holders with a shot of getting their money back (plus 3%) in 6 years, but not necessarily a good shot. No educated investor looks at this and says "whoa, Nelly, where do i sign?" This is for stupid rich fanboys looking to blow some bucks to say they own the Mets, and maybe get Mr. Met for the their kid's bar mitzvah. I assure you, Einhorn-types look at this bullshit and laugh.

metsmarathon Dec 21 2011 09:47 PM Re: $20 Million Can Get You Lots

now, vic. if there's one thing this wilpon ownership group has taught us, it's that our beloved mets most certainly can be shat through.

batmagadanleadoff Dec 21 2011 10:42 PM Re: $20 Million Can Get You Lots

Ceetar wrote: batmagadanleadoff wrote: What guarantee will the minority owners be given for their respective $20M investments against a bankruptcy? I don't understand the legal mumbo jumbo, but I'm pretty sure that's protected. I asked a rhetorical question. The investors have no guarantee in a bankruptcy because there, the owners will owe a lot more money than they have to pay out. The Mets have two large creditors that are owed about $400M --each-- and we know that those banks didn't lend the Mets those huge sums of money without reserving for themselves the right to approve or veto any subsequent loan to the Mets. They have that clout because of the money they lent to the Mets. And they're not gonna approve any new loans that further compromise their own chances of being repaid. This wouldn't ordinarily matter so much except that if the numbers being cited by the NYT, Megdal, et.al. are reasonably accurate, then there is a very realistic chance that the Mets end up in bankruptcy if they don't first sell the team. The Mets appear to be at the mercy of their large creditors. And unless those creditors are willing to restructure when the principal payments become due (beginning about two seasons from now) Fred and Saul won't be able to retain the team. The big black hole, though, in all of these forensic studies of the Mets finances is how much money the owners have access to outside of their baseball operations. No one knows for sure, and this could change things drastically, though it's a good guess that they're tapped out all around because why else would they need to borrow from MLB, or take out a bridge loan, or just now decide to eliminate a whole minor league team? All this, without even accounting for a single penny of damages from the Picard suit. The Mets are trying to sell between 40% and 48% of the team just to keep the lights on for another 10 months. Financially, they appear to be in a death spiral.

Ashie62 Dec 22 2011 09:07 AM Re: $20 Million Can Get You Lots

There is a pecking order of creditors in any banruptcy. It doubt the 20 million dollar chips rank very high. Someone noted earlier, Vic perhaps, that the Einhorn types laugh at this kind of shit... Uh huh...Kinda like when the prospectus came they might say "hey, look at this piece of shit." and toss it in the garbage. Sterling Properties debt is junk rated.