Silly Wilpon Tricks

[Bugg]

Ruh Roh-

JPMorgan Chase holding up Mets-Einhorn deal

By JOSH KOSMAN

Last Updated: 8:16 AM, July 24, 2011

Posted: 10:07 PM, July 23, 2011

The Mets' pending deal to sell a minority stake in the team to David Einhorn is dragging on well beyond its expected closing date because lender JPMorgan Chase is not letting the team structure the deal as a loan, making it harder to complete, The Post has learned.

"The Wilpons are having a tough time with the banks," a source close to the talks said. (This tends to happen when you a. lose vast sums of money and b. fail to repay said loans in a timely fashion).

Fred Wilpon's Sterling Equities, which owns the Mets, last week extended its exclusive negotiations with Einhorn after failing to reach a deal by the June 30 deadline. (Extended because he had no chocie once Chase wouldn't go along).

Einhorn's $200 million purchase of a 33 percent stake in the money-losing Mets franchise is structured as a loan -- with the hedge-fund investor getting paid back in three years and having his stake reduced to about 16 percent.

JPMorgan Chase, which is owed about $500 million by the team, won't approve such a deal unless its loans get serviced -- repaid or restructured -- prior to Einhorn.

In addition to objecting to the Einhorn deal, in the last few months the bank wrote a "tough" letter to Sterling telling it that the Mets had breached their loan in 13 different ways, said the source, who has seen the letter. (Chase doesn't want the loan to be deemed nonperforming or in default; they want it paid back, and don't want the embarrassment of foreclosing on an MLB franchise; it would not only be a disaster for the Mets, Wilpons and MLB, it would make Chase look like a bunch of fools for giving the loan in the first place.)

The bank did not put the team in default, but the letter puts it on notice so the bank could more easily pursue that course in the future, the source said.

The 43-year-old Einhorn, if he is not repaid in three years, has the option of acquiring a controlling stake in the Mets at a predetermined price.

The JPMorgan Chase-led lending group has said that the Mets cannot simply pay Einhorn back to keep its majority stake, at least if they intend to do so before June 30, 2014, when their loan matures, the source with direct knowledge said.

And Einhorn wants to be paid back by that time.

The bank group, which has the right to approve all loans to the team, wants a complete restructuring of the $500 million-plus in debt as part of any plan to pay Einhorn back.

"I'm very confident this can't be a loan," the source said. "It needs to be complete recap."

With the Mets on track to lose $60 million this year, the banks will likely want more of their loan paid down.

The Mets, to execute a full recap and pay back Einhorn, will likely need a new equity investor to get a deal done at that time, the source said. (At which point you have to ask why the Wilpons refsue to sell, and how they can expect to keep the team if they now need ANOTHER BIG INVESTOR to bail them out).

Sterling, which also owns a majority stake in the profitable SportsNet New York (SNY) regional cable sport network, was planning to use free cash from that business to pay Einhorn, the source said.

"Einhorn will have to wait until later, or be part of a larger package," the source said.

Sterling likely does have enough money to fund the Mets for some time, the source said, but Major League Baseball and the lending group have put pressure on Sterling to sell a minority stake in the team after it took an emergency loan in November from MLB.

Lenders are becoming tougher about their troubled loans to sports teams because of losses taken last year in the Texas Rangers bankruptcy case, and that might be coming now in the Los Angeles Dodgers bankruptcy, sources said.

"JPMorgan has been very difficult on several sports loans," another source said. "They are being supremely cautious."

"We have a very good relationship with all of our lenders and are working closely with JPMorgan, as agent for the lending syndicate, in connection with the current minority sale process," said a Mets spokesperson last night.("Other than we owe them A sh*tLOAD OF CASH WE HAVE NOT PAID BACK")

jkosman@nypost.com

Read more: http://www.nypost.com/p/news/business/mets_feel_heat_4061OZ06XbegZENoa6T31M#ixzz1T24vNHWL

[Scott Dierking]

Ruh Roh-

JPMorgan Chase holding up Mets-Einhorn deal

By JOSH KOSMAN

Last Updated: 8:16 AM, July 24, 2011

Posted: 10:07 PM, July 23, 2011

The Mets' pending deal to sell a minority stake in the team to David Einhorn is dragging on well beyond its expected closing date because lender JPMorgan Chase is not letting the team structure the deal as a loan, making it harder to complete, The Post has learned.

"The Wilpons are having a tough time with the banks," a source close to the talks said. (This tends to happen when you a. lose vast sums of money and b. fail to repay said loans in a timely fashion).

Fred Wilpon's Sterling Equities, which owns the Mets, last week extended its exclusive negotiations with Einhorn after failing to reach a deal by the June 30 deadline. (Extended because he had no chocie once Chase wouldn't go along).

Einhorn's $200 million purchase of a 33 percent stake in the money-losing Mets franchise is structured as a loan -- with the hedge-fund investor getting paid back in three years and having his stake reduced to about 16 percent.

JPMorgan Chase, which is owed about $500 million by the team, won't approve such a deal unless its loans get serviced -- repaid or restructured -- prior to Einhorn.

In addition to objecting to the Einhorn deal, in the last few months the bank wrote a "tough" letter to Sterling telling it that the Mets had breached their loan in 13 different ways, said the source, who has seen the letter. (Chase doesn't want the loan to be deemed nonperforming or in default; they want it paid back, and don't want the embarrassment of foreclosing on an MLB franchise; it would not only be a disaster for the Mets, Wilpons and MLB, it would make Chase look like a bunch of fools for giving the loan in the first place.)

The bank did not put the team in default, but the letter puts it on notice so the bank could more easily pursue that course in the future, the source said.

The 43-year-old Einhorn, if he is not repaid in three years, has the option of acquiring a controlling stake in the Mets at a predetermined price.

The JPMorgan Chase-led lending group has said that the Mets cannot simply pay Einhorn back to keep its majority stake, at least if they intend to do so before June 30, 2014, when their loan matures, the source with direct knowledge said.

And Einhorn wants to be paid back by that time.

The bank group, which has the right to approve all loans to the team, wants a complete restructuring of the $500 million-plus in debt as part of any plan to pay Einhorn back.

"I'm very confident this can't be a loan," the source said. "It needs to be complete recap."

With the Mets on track to lose $60 million this year, the banks will likely want more of their loan paid down.

The Mets, to execute a full recap and pay back Einhorn, will likely need a new equity investor to get a deal done at that time, the source said. (At which point you have to ask why the Wilpons refsue to sell, and how they can expect to keep the team if they now need ANOTHER BIG INVESTOR to bail them out).

Sterling, which also owns a majority stake in the profitable SportsNet New York (SNY) regional cable sport network, was planning to use free cash from that business to pay Einhorn, the source said.

"Einhorn will have to wait until later, or be part of a larger package," the source said.

Sterling likely does have enough money to fund the Mets for some time, the source said, but Major League Baseball and the lending group have put pressure on Sterling to sell a minority stake in the team after it took an emergency loan in November from MLB.

Lenders are becoming tougher about their troubled loans to sports teams because of losses taken last year in the Texas Rangers bankruptcy case, and that might be coming now in the Los Angeles Dodgers bankruptcy, sources said.

"JPMorgan has been very difficult on several sports loans," another source said. "They are being supremely cautious."

"We have a very good relationship with all of our lenders and are working closely with JPMorgan, as agent for the lending syndicate, in connection with the current minority sale process," said a Mets spokesperson last night.("Other than we owe them A sh*tLOAD OF CASH WE HAVE NOT PAID BACK")

jkosman@nypost.com

Read more: http://www.nypost.com/p/news/business/mets_feel_heat_4061OZ06XbegZENoa6T31M#ixzz1T24vNHWL

Mets got good news on the clawback this week-Won't get sued for damages.

I actually read an article where the Mets were getting a little upset with Einhorn, and started negotiating with a 3rd party, outside Einhorn. They then negotiated better terms with Einhorn and extended how window.

[Maxman]

Are the Mets really losing 60 million per year? How is that possible?

[Bugg]

Are the Mets really losing 60 million per year? How is that possible?

On paper, yes.And they are not drawing anywhere hear they expected to when they opened Citifield.

But 2 things would tell you it's not that bad.

SNY-the Wilpons own a majority share, and it makes money hand over fist, which is why they do not want Einhorn or anyone else to get any of it. Consider also that the rights fees between the Wilpon-owned Mets would get form a 3rd party would be much higher than what they pay Wilpon-owned SNY in house on the books. If they still were part of MSG, that would be a significant increase in revenues. Thus is something the Sawx, Yanks, Braves and Cubs (all who own all or part own their own TV network)all take advantage of such bookkeeping self-dealing. Their rights fees are pracitally nonexistent and the ad revenue goes into their pockets, albeit through the TV channel pocket rather than directly. You cannot look at the books of any of these franchises (like the Knicks and Rangers as well) without seeing that allows the teams to underreport revenues. In fact the Wilpons adamantly refuse to sell any part of it; small wonder. It makes very good money.

Citifield is relatively new. Which means they are taking a huge depreciation deduction for the next few years, fully and legally, thereby knocking down their revenues.

Still, that Chase is basically demanding repayment if quietly is a cause for concern. As does the idea that the Mets now think they need another investor. Don't think Einhorn was very happy to hear any of this.

[Maxman]

On paper, yes.And they are not drawing anywhere hear they expected to when they opened Citifield.

But 2 things would tell you it's not that bad.

SNY-the Wilpons own a majority share, and it makes money hand over fist, which is why they do not want Einhorn or anyone else to get any of it. Consider also that the rights fees between the Wilpon-owned Mets would get form a 3rd party would be much higher than what they pay Wilpon-owned SNY in house on the books. If they still were part of MSG, that would be a significant increase in revenues. Thus is something the Sawx, Yanks, Braves and Cubs (all who own all or part own their own TV network)all take advantage of such bookkeeping self-dealing. Their rights fees are pracitally nonexistent and the ad revenue goes into their pockets, albeit through the TV channel pocket rather than directly. You cannot look at the books of any of these franchises (like the Knicks and Rangers as well) without seeing that allows the teams to underreport revenues. In fact the Wilpons adamantly refuse to sell any part of it; small wonder. It makes very good money.

Citifield is relatively new. Which means they are taking a huge depreciation deduction for the next few years, fully and legally, thereby knocking down their revenues.

Still, that Chase is basically demanding repayment if quietly is a cause for concern. As does the idea that the Mets now think they need another investor. Don't think Einhorn was very happy to hear any of this.

Thanks Bugg.

[Scott Dierking]

On paper, yes.And they are not drawing anywhere hear they expected to when they opened Citifield.

But 2 things would tell you it's not that bad.

SNY-the Wilpons own a majority share, and it makes money hand over fist, which is why they do not want Einhorn or anyone else to get any of it. Consider also that the rights fees between the Wilpon-owned Mets would get form a 3rd party would be much higher than what they pay Wilpon-owned SNY in house on the books. If they still were part of MSG, that would be a significant increase in revenues. Thus is something the Sawx, Yanks, Braves and Cubs (all who own all or part own their own TV network)all take advantage of such bookkeeping self-dealing. Their rights fees are pracitally nonexistent and the ad revenue goes into their pockets, albeit through the TV channel pocket rather than directly. You cannot look at the books of any of these franchises (like the Knicks and Rangers as well) without seeing that allows the teams to underreport revenues. In fact the Wilpons adamantly refuse to sell any part of it; small wonder. It makes very good money.

Citifield is relatively new. Which means they are taking a huge depreciation deduction for the next few years, fully and legally, thereby knocking down their revenues.

Still, that Chase is basically demanding repayment if quietly is a cause for concern. As does the idea that the Mets now think they need another investor. Don't think Einhorn was very happy to hear any of this.

The Mets were the ones quietly pushing Einhorn aside, not the other way. Supposedly, Einhorn re-negotiated less friendly terms for himself, not the other way around.

[Maxman]

The Mets were the ones quietly pushing Einhorn aside, not the other way. Supposedly, Einhorn re-negotiated less friendly terms for himself, not the other way around.

How do you know?

[Scott Dierking]

How do you know?

Even amid assertions that negotiations with David Einhorn were moving toward a positive conclusion next month, the Mets reopened discussions recently with at least one other serious bidder for a minority share of the team, according to two people with knowledge of the talks.

The Mets have reached out to Ray Bartoszek, the billionaire former oil trader for Glencore International, and asked him to re-enter the bidding, the two people said.

Fred Wilpon, the Mets’ principal owner, met with Bartoszek on Wednesday at Wilpon’s Long Island estate, and the sides had been expected to continue negotiations over the next few days.

But later in the day Wilpon and his son Jeff, the chief operating officer of the team, met with Einhorn, said another person with knowledge of those talks, and apparently concluded a new exclusive negotiating agreement with him that is expected to lead to a final deal next month, on better terms for the Mets.

Just hours after meeting with Bartoszek, the Mets released a statement at 7:05 p.m. that said they were negotiating only with Einhorn, raising questions about the purpose of the meeting with Bartoszek.

“We are in exclusive negotiations with David Einhorn and continue to have positive and productive discussions regarding David’s ongoing interest in an investment in the Mets,” the statement said.

Other parties who were involved in the original bidding were also contacted and invited to renew their efforts after the Mets and Einhorn failed to reach a final agreement within the initial exclusivity period that ended last month.

Based on the sequence of events, it is not inconceivable that the Mets could have used the negotiations with Bartoszek, and others, to compel more favorable terms from Einhorn. That certainly appears to be reflected in an agreement on a new period of exclusivity.

Bartoszek, a former college infielder who grew up a devout Mets fan, was involved in the original bidding process and was said to have come in second to Einhorn.

The Mets chose Einhorn in an unusual deal that would provide them with much-needed capital — $200 million — at a time when they were facing severe financial distress. That included the specter of a billion-dollar lawsuit filed by Irving H. Picard, the trustee for the victims of Bernard L. Madoff’s Ponzi scheme.

Since then, the Mets’ owners, who were heavy investors with Madoff, won a favorable ruling that shifted the case out of bankruptcy court. That may have emboldened them to seek a deal better than the one initially reached with Einhorn in May.

Although the framework of the original deal has not been made public, most agree that it provided Einhorn with a clear path to majority ownership if the Mets could not repay him the $200 million within a time frame said to be between three and five years. The number of years depends on the outcome of the Madoff litigation and would be negotiated once the result of the lawsuit is determined.

Commissioner Bud Selig has spoken favorably about Einhorn, whom he has known since Einhorn was a child in Milwaukee and played baseball on the lawn of one of Selig’s neighbors. Selig is thought to favor Einhorn’s candidacy, especially because he could end up controlling the Mets within a few years.

But at a recent news media conference at Sun Valley, Idaho, Wilpon told people that he was not happy with the deal he cut with Einhorn and was willing to accept new bids.

Regardless of the Madoff lawsuit, the Mets still need an infusion of cash to pay off their loans and meet payroll demands.

Richard Sandomir contributed reporting.

[Maxman]

Yes but those are just words. How do you really know?

[Scott Dierking]

Yes but those are just words. How do you really know?

That is a secret that Ruh-Ruh and I will keep