ESPN reports that the deal to sell a minority share in the New York Mets to hedge fund manager David Einhorn will likely not close until August. Both sides are confident that the deal will get done, but the details are dragging out the process.
The deal differs from previous reports. Einhorn will initially own 33% of the Mets, but the arrangement changes in three to five years. The current owners, mainly the Wilpon family, must hand over another 20% of the team to Einhorn after the agreed upon number of years. The Wilpon family would have veto power over the increased share, but could only block Einhorn's appeal for majority ownership if they repaid the $200 million Einhorn is paying initially--and Einhorn would retain 1/6th of the team regardless. In this scenario, Einhorn is basically loaning the Wilpons $200 million, and the interest they would pay would be a portion of the team.
The Mets lost $51 million last year and are forecast to lose $70 million this year. The owners of the team, Sterling Enterprises, led by the Wilpon family, lost $500 million in the Bernie Madoff fraud scandal, leaving the baseball team in a teetering posture. Major League Baseball lent $30 million to the Mets late last season amidst a cash-flow emergency.