New York Mets Receiving Loan from Hedge Fund Manager

Currently third in the National League East, the New York Mets (58-57, 7.5 games out of wild-card lead) have something to look forward to besides next year. David Einhorn, President of Greenlight Capital GLRE, recently restructured an agreement with the New York Mets to help relieve multiple debtors including Major League Baseball and JPMorgan Chase JPM. According to the NY Post, the original $200 million investment was to be repaid by June 2014 by co-owners Fred Wilpon and Saul Katz for a reported 17 percent stake in the team. The restructured agreement splits the investment into two parts and extends the deal to five years in order to repay JP Morgan Chase and other banks before Einhorn. One hundred million will be used to pay off loans while the other half will be spent to cover the 2011 operating losses, which are estimated to be $60 million. The loans that will be repaid include $30 million from Major League Baseball and a $70 million reduction in a $500 million debt owed to a lending group. The deal is expected to benefit both the Mets and Einhorn. Wilpon and Katz should have enough time to resurrect the Mets. Currently, the duo and their investment company, Sterling Equities, own 100 percent of the team. However, if they fail to repay the loan within the five-year period, Einhorn has the option to purchase a majority stake in the Mets. Mets Curveball The Mets have had to make crucial decisions in order to keep the ball club rolling this season. Outfielder Carlos Beltran and pitcher Francisco Rodriguez have both been traded in season. The reason for these trades has been the $120 million payroll for the season, which ranks seventh in Major League Baseball. From the dugout to the front office, a fair share of ups and downs has plagued the Mets. In 2000, a loss to cross-town rival New York Yankees extended the World Series Championship drought to 25 years. Then in 2006, the team won the National League East only to lose the Division Title to the eventual World Series Champion – the St. Louis Cardinals. Problems in the front office have also hindered the Mets' return to the playoffs. Wilpon, Katz, and Sterling Equities have had their hands tied attending to a billion dollar lawsuit following Bernie Madoff's Ponzi scheme.