Today in Burying the Lede

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.

- Richard Sandomir, “$20 Million Can Buy Quality Time with Mr. Met”
New York Times

So if a 4% ownership interest in the team is worth $20 million . . . *Furiously Does Math* . . . that puts the current value of the New York Mets at $500 million dollars. (Math may be wrong here. I have no idea if 100% ownership interest equals 100% value of the team. Why do we write about money and law in convoluted terms?) The Houston Astros — who play in Houston and are the Astros — were just sold for $680 million dollars, although the Astros’ sale included “related entities,” where this valuation of the Mets does not include their “related entities,” such as SNY. But $500 million dollars is far less than people and magazines have been estimating for some time.

I also recommend checking out the Times’ copy of the term sheet for becoming a partial owner of the Mets. I’m generally not interested in the finances of baseball, but I am interested in unintentional comedy, and this definitely falls into the latter. The term sheet reads like a brochure for an incredibly expensive and totally lame fan club. I thought the Times article was a parody at first glance — “Owners workout day” — but these are the actual perks of forking over $20 million dollars to a baseball team. Partial owners not only get sweet business cards that say “owner,” they also get Paul DePodesta’s cell phone number and “discounts on all MLB-licensed merchandise.”

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15 Comments

Filed under Mets, Words

15 responses to “Today in Burying the Lede

  1. AV

    My friend’s brother got Mr. Met to make a surprise appearance at his wedding, so I doubt kids’ birthday parties would be an issue for an “owner”. They even did a story on the 8/31/2007 episode of SNY’s Mets Weekly about the viral YouTube video from my friend’s wedding. (If you search for “Mr Met at Pinty and Pooja’s wedding” on YouTube, you’ll find the original video The Mets Weekly clip is also available on SNY’s YouTube page.)

  2. They also are guaranteed their investment won’t go down, get to go in on any Willets Point construction (probably a big deal if you’re interested in having the ‘best’ Sports bar/business/hotel there right?) and get to be part of an advisory board.

    Also get second rights to buy the other shares. Ultimately if you’re hoping to buy a MLB team one day, and you think the Mets are going to come up for sale, it sounds like you’d be ~10th in line if you don’t buy in now. That’s an interesting thought, that the Wilpons may be reaching out to those that are betting against them to try to stay afloat. Might be like taking out a gambling loan from the Mafia.

  3. Are we sure that the 20 mil buys 4%? When I first read it I thought the Mets were selling 4% of the team in 20 mil shares. Since there is an unknown number of shares you can guarantee that the Mets are worth more than 500 mil.

    • definitely says 4% and says they’re selling exactly 12 of them.

    • Patrick Flood

      They’re selling up to 40% of the team. Like Ceetar says, up to 12 shares at 4% per share, but two of the shares are being bought by the current owners as a sign of good faith. Or something. I don’t know how these things work.

      • Patrick,

        Can they be selling 40% of the team and maintain controlling interest of the team? I was under the impression (based mostly off this great fanpost on Amazing Avenue: http://www.amazinavenue.com/2011/12/11/2627933/an-in-depth-look-at-the-mets-finances), that Time Warner and NBC/Universal are already part owners. If the Wilpons were able to sell 40% of their 65% of the team, would that lead to them owning only 25% of the team? I guess that since these shares are being offered as non-voting shares, the Wilpons might be able to give “ownership” to the $20M investers, they’d retain the voting rights of the 65%. However, that *might* explain why a 4% “ownership” might not necessarily equate to 4% of the full value of the franchise. It’s being discounted because it doesn’t carry voting/control rights.

      • Patrick Flood

        Simple misunderstanding — Time Warner and NBC/Universal own part of SNY, not part of the Mets. The Wilpons, as of right now, own 100% of the Mets. They’re trying to sell 40% of the Mets, which would leave them with 60%.

        And yeah, Dan Lewis’ post is great, great stuff.

      • Small math note – selling 40% of a 65% share is the same as selling 26% of the overall product (.65 * .4 = .26). That would leave the original owners with 39% of the overall ownership, so they’d still outvote the bloc they gave up by a 3-to-2 margin, and would still outvote the remaining 35% ownership group.

        It wouldn’t leave them with absolute control if the other two blocs made a common cause, but they would still be the largest shareholders.

  4. Selling 4% for 20 mil does not value the Mets at 500 million as you have to take into account that the controlling interest in the Mets would be worth additional money beyond the 500 mil. I’m not sure how much that is but I would say it’s definitely a significant amount and would have to make up for a decent amount of the difference between the Astros price and the Mets.

  5. Patrick, I don’t really understand the title of this post. “Lede” in journalism terms atleast, is meant to be in the opening paragraph and should “grab” the reader. Also, the “burying the lede” thing is when the most interesting part of the story isn’t in the opening paragraph. The paragraph that this quote was taken from was the second but the first was basically just a minor opener so the “burying the lede” thing doesn’t really apply here. And yes I am bored, and yes I am jewish with all of my friends out doing christmas things. But I’m just curious as to what you mean by the title. – Joe Harry

    • Patrick Flood

      What I meant by the title: The most interesting thing in the article, at least the way I saw it, was the $500 million dollar self-valuation of the Mets (which wasn’t actually stated, but something one had to do math to figure out). In Forbes and other places, the guestimations were coming in around $750 million or higher. I thought the value of the Mets was the most interesting leak — hence the buried lede — though perhaps I was wrong.

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