The most exciting baseball game in New York is being played away from the field.
The sale of the New York Mets franchise has sparked a bidding war from an A-list crowd that spans Hollywood superstar Jennifer Lopez and hedge fund kingpin Steven Cohen.
As the auction heads into its final days, with recent bids approaching $2bn, people with direct knowledge of the process describe a passionate contest filled with competing egos and contrasting priorities.
For bidders, the end goal is not only owning a jewel of a leading sports franchise, but membership of one of the most elite social strata in the US.
"It is hard to imagine a more exclusive club in America than Major League Baseball owners," said Paul Finkelman, president of Gratz College and a baseball historian. Nearly half of the league's 30 teams have kept the same owners for more than two decades, and some for even longer.
Each of the suitors are being evaluated by the current Mets owners, the Wilpon family, and their financial adviser Allen & Company, which is managing the sale. The Wilpons took a stake in the team in 1980 and became majority owners in 2002, but their finances and reputation took a hit after they invested with asset manager Bernard Madoff, whose fund was later revealed to be a Ponzi scheme.
The Wilpon family
Who are they?
The current Mets owners are the Wilpon family, headed by patriarch Fred (above) with his son, Jeff. But after investing with now-disgraced asset manager Bernard Madoff, the family's financial profile has declined, leading them to consider a sale of the club.
The boardroom action comes as the Mets have started the pandemic-delayed baseball season slowly — once again paling by comparison with their crosstown rival, the 27-time World Series champion Yankees, who are in first place in their division.
Irrespective of the on-field performance, the Mets' devoted fan base and location in the cultural and financial capital of the US make them a glittering trophy asset, now for sale for the first time in nearly 20 years.
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To self-described "long-suffering Mets fan" Mohamed El-Erian, chief economic adviser at Allianz, the franchise is "a loveable team that, as consistent underperformers" has not yet lived up to its potential.
The three bidding groups for the franchise include Mr Cohen; former Yankees third baseman Alex Rodriguez and his entertainer fiancée Ms Lopez; and established billionaire sports team owners Josh Harris and David Blitzer, of Apollo Global Management and Blackstone, respectively.
Through a spokesman, Mets chief operating officer Jeff Wilpon declined to offer "details or updates on the timeline or process" of the team sale. Allen & Co declined to comment.
Of the Mets bidders, Mr Cohen is unquestionably the most driven: he is already a minority shareholder and the auction is his second attempt to buy the team and third overall for a baseball franchise. During an attempt to buy the Los Angeles Dodgers in 2012, he was out-bid by an investor group including basketball legend Magic Johnson and Guggenheim Partners executive Mark Walter, which paid around $2bn.
Mr Cohen also has the deepest pockets, with an estimated net worth of around $14bn, according to Forbes.
Bid 1. Steven Cohen
Who are they?
Steven Cohen, hedge fund manager behind Point72 Asset Management. Mr Cohen has long sought a baseball team. He already owns an 8 per cent stake in the Mets. Earlier this year, he agreed to buy the Wilpons' 80 per cent stake in a $2.6bn deal, but the transaction collapsed.
Chances of success? With the deepest pockets of any bidder, the auction is seen as Mr Cohen's to lose. But questions over his controversial past hang over the auction since any deal requires approval from the commissioner of Major League Baseball and the other franchise owners.
"The Mets have for so long been a punchline under the current ownership: they've been cheap, they've been frugal, they've been inept," said Adam Schein, a sports radio and television host for SiriusXM and CBS. "They deserve an owner that acts like they're in New York City and spends like they're in New York City."
For that reason, people involved in the sale consider the Mets Mr Cohen's to lose. "If I were a Mets fan, I'd want Steve Cohen in there to whitewash his image and spend millions of dollars," said one person following the process closely.
His former firm, SAC Capital, was fined $1.8bn for insider trading infractions in 2013. Mr Cohen himself was never charged but he was barred for two years by regulators from taking investor money in a 2016 settlement. He converted SAC into a family office called Point72 Asset Management and later reopened to outside investors, now managing $17.2bn.
A lavishly wealthy owner could be useful considering the constraints facing the Mets. In recent years, the team has been losing between $50m and $90m annually, people familiar with their finances said.
That was before the pandemic. Now with baseball playing a truncated season to empty stadiums, Chris Hartweg, chief executive of industry analyst Team Marketing Report, forecasts that the Mets will lose $247m this year from the loss of ticket sales alone.
The need for deep pockets not only to fund the bid but cover future losses is a limiting factor for Mr Rodriguez and Ms Lopez, whose combined wealth is in the hundreds of millions rather than billions of dollars.
They are pledging up to a combined $250m of their own money, according to two people with knowledge of their campaign, supplemented by larger stakes from high-frequency trading magnate Vincent Viola and Vitaminwater co-founder Mike Repole. The group is working with bankers at JPMorgan Chase to structure their bid.
Bid 2. Alex Rodriguez and Jennifer Lopez
Who are they?
Retired MLB star Alex Rodriguez and entertainer Jennifer Lopez are pledging up to $250m combined to fund their bid. They are joined by Vincent Viola, a billionaire markets tycoon, and Vitaminwater co-founder Mike Repole, who are each putting in large sums. The group is working with bankers at JPMorgan Chase to structure their bid.
Chances of success? With the most star power of any of the bidders, the biggest challenge facing their efforts is whether they can secure enough money to submit a winning offer.
The third camp is led by Mr Harris and Mr Blitzer, who are positioning themselves as the financially stable and disciplined option. The two private equity investors have experience owning and managing sports teams, including basketball's Philadelphia 76ers and hockey's New Jersey Devils. They also own a minority stake in Crystal Palace football club in England's Premier League. However, people close to the pair say their interest in bidding for the Mets is not limitless.
"With assets like the Mets, a deal is all about what the buyer thinks is the size of the home market and the value of the media rights," said Susan Kilsby, a former M&A banker who sits on boards including Diageo and Unilever.
A Mets season-ticket holder since 1987, Ms Kilsby added: "When a trophy asset attracts a trophy investor, you can end up with a successful outcome."
One of the prevailing questions in the auction is whether Mr Cohen will be welcomed into one of America's most exclusive clubs. Any sale of the Mets would have to be vetted and approved by the other MLB owners and the League commissioner, Rob Manfred. He is already in the midst of one of the most challenging years for the League in decades, hampered by a cheating scandal that engulfed the Houston Astros, an extended labour stoppage and the coronavirus-shortened 2020 season.
Despite not being convicted in 2012, the insider trading scandal still haunts Mr Cohen's image. More recently, people close to the sellers have also become concerned about allegations of mistreatment by women at Mr Cohen's firms, including two recent lawsuits alleging discrimination.
Point72 declined to comment.
Like Mr Cohen, Mr Rodriguez also has blemishes to overcome. In 2014, he was suspended by MLB for the entire year for what the League described as "overwhelming evidence" that he obtained performance-enhancing drugs.
Bid. 3 David Blitzer and Josh Harris
Who are they?
Private equity moguls David Blitzer (above) and Josh Harris own a series of sporting assets through their entertainment company. Their portfolio includes the NBA's Philadelphia 76ers, NHL's New Jersey Devils and a minority stake in the Crystal Palace football club in England's Premier League.
Chances of success? The investors are unlikely to drive up the price for the Mets. They will instead argue they are financially disciplined owners with a long record of owning and managing sports franchises.
But Mr Rodriguez remains a glossy magazine fixture along with Ms Lopez, and their celebrity could provide a much-needed pop-culture boost to MLB. Over the 10 years ended in 2019, the League's national television ratings have declined at a compound annual rate of 2 per cent, according to analysts at MoffettNathanson.
The National Football League and the National Basketball Association have extended their lead in TV audience over that period.
$2.6bnThe Mets valuation in FebruaryFinal bids to the Wilpons and Allen & Company are due by the end of this month and two people familiar with their thinking said the family is committed to a sale.
What is not clear is whether a glittery new owner will transform the image - and on-field performance - of New York's scrappy, underdog Mets.
Mr Schein, the radio host, said, "They need to get someone who is committed, who loves the Mets, who has deep pockets, and understands what it takes to win. There's no fan base more deserving than the Mets."
Written by: Sara Germano and James Fontanella-Khan in New York and Arash Massoudi in London
© Financial Times