Steve Cohen’s bid to buy the New York Mets seems to be falling through. Control seems to be the issue destroying the deal.
News broke on Tuesday that Steve Cohen’s bid to buy the New York Mets is falling through. Multiple sources reported that the team’s sale is in trouble prompting a response from current owner Fred Wilpon.
Statement from #Mets ownership on reports that Steve Cohen is backing out of deal to purchase majority stake in club: “The parties are subject to confidentiality obligations, including a mutual non-disclosure agreement, and therefore cannot comment.”
— Ken Rosenthal (@Ken_Rosenthal) February 4, 2020
That’s not a denial and it should scare Mets fans. The Wilpons have tanked two other potential sales before. Tanking a third would be a shock.
It wasn’t long after the Mets’ statement that Thorton McEnery of the New York Post reported that the deal’s “on life support.”
Michael Mayer of Metsmerized Online specifically points to control as a central issue. He notes that talks were in the final stages, but that Cohen and the Wilpons couldn’t agree on when Cohen would take over.
My understanding from sources is that Steve Cohen wanted control of operations once the sale went through and that the Wilpons are unwilling to do that. They preferred the 5-year plan that was previously reported.
— Michael Mayer (@mikemayer22) February 4, 2020
Cohen wanted immediate control. It makes sense that the majority owner would be the controlling owner. Why would he want the Wilpons in charge of spending his money, especially after the Wilpons operated in the red each of the last two years?
Meanwhile, the Wilpons wanted to have the previously reported deal where they stayed in control for five more years, one that makes little sense for Cohen. Obviously, the Wilpons would want to keep their jobs for five more years; who wouldn’t? However, Cohen has no reason to keep them on.
Cohen was upset that the Wilpons changed the terms of the deal during the final stages, so he’s walking away. That’s left the sale on life support if it’s not already dead.
This is nearly identical to what happened in 2011 with David Einhorn.
Einhorn was posied to talk control of the team, but after the Wilpons changed the terms at a late stage, Einhorn walked away and accused the Wilpons of working in bad faith.
The Wilpons have to do something. The team is in debt and there is a divide between the Katz family and the Wilpons. They simply don’t have the resources to run a major league baseball team anymore. They’re backed against a wall and will have to sell at some point.
The sale falling through with Cohen will hurt their negotiations if they continue to pursue a sale. Nobody wants to work with someone who’s perceived as working in bad faith.