$20 Million Can Buy Quality Time With Mr. Met
Suzy Allman for The New York Times
The Mets are seeking minority investors, and the perks include access to the mascot, a parking space and a business card.
By RICHARD SANDOMIR
Published: December 20, 2011
It is, understandably, not the easiest sell: $20 million to own a small, noncontrolling interest in a baseball team renowned of late for losing — on the field and at the gate.
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Suzy Allman for The New York Times
One of the minor perks is discounted merchandise, although the availability of team-branded dustpans was uncertain.
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.
But for those perhaps uncertain over whether to part with their millions, the owners have listed some less obvious perks that would come with a share of the Queens ball club.
¶ Access to Mr. Met, the team mascot, although the degree of access is not entirely spelled out. It definitely means you, as a part-owner, can schmooze with Mr. Met at Citi Field. It’s less clear whether you could get him to come to your child’s birthday party without a fee.
¶ A formal business card, complete with the prominent designation: “Owner.”
¶ And if you are a wealthy doctor, commodities trader or real estate mogul who wants to try to swat the ball over the newly pulled-in outfield fences at Citi Field on a Mets day off, you are entitled to attend what appears to be an exclusive kind of fantasy camp: “Owners’ workout day.”
These benefits of ownership are laid out in a term sheet given by the Mets’ owners to prospective partners. The document, drawn up by the club’s investment banker and obtained by The New York Times, runs to three pages, and includes a mix of complex financial arrangements and, well, simpler stuff.
Parking will not be a problem for new owners, the document makes clear. A single spot at the ballpark is reserved for anyone who signs on for $20 million. The chance to throw out a game’s first pitch will be an annual privilege. Every minority owner will be assigned a team executive, who will be charged with tending to an array of possible needs, season tickets for family members among them. The document suggests, however, that those tickets will cost money beyond the $20 million investment.
The sale of minority stakes in sports franchises is fairly common and can serve a variety of purposes — a sense of inclusiveness for community and ethnic groups, estate planning for an aging majority owner, and a degree of civic commitment or political influence. And, in many cases, to raise necessary cash.
That is, it seems, the express goal for the owners of the Mets, Fred Wilpon and Saul Katz. The club lost $70 million in 2011; the men are facing trial over tens of million of dollars being sought by the trustee for Bernard L. Madoff’s victims; and they just lost their best player, Jose Reyes, when they were unable to match an offer from the Miami Marlins. They just obtained a $40 million bank loan to tide them over for the next several months.
Since September, the owners have been trying to raise in excess of $200 million through the sale of 10 to 12 minority stakes. The owners have said publicly that interest in the stakes is high but that they have been unable to get any of the potential cash until all the needed shares have been sold.
The term sheet was issued by the club’s owners early in their hunt for investors. It is the kind of document that can evolve over time.
Team officials would not comment on the document when contacted by The Times. They refused to say publicly whether the terms of the offers to investors had changed, in major or minor ways.
It seems unlikely that too many of the perks offered by the owners have changed radically. And that goes for some of the truly appealing ones. In the document, for instance, each minority partner will receive one luxury box at Citi Field. This would seem an unqualified benefit. That said, it could indicate the club has had trouble leasing the suites for additional money. There are 54 suites in the park that lease for $250,000 to $500,000 a year, according to one industry publication.
Of course, the refusal of the team to comment on any changes to the offers inevitably results in a certain amount of guesswork.
In the document, the Mets told potential investors that they could get their money back after six years with 3 percent compound annual interest included. In essence, the investment would be a loan. For the same six years, the investors would not have to invest another cent. Those details were first reported by Sports Business Journal.
Curiously, Sterling Equities, the Mets’ parent company, has told potential partners that it will buy “at least” two of the units. That would mean buying stakes in a team that Wilpon and Katz already own — using money, at least $40 million of which they need for other pressing reasons.
Rob Tilliss, the president of Inner Circle Sports, a financial consultant to sports teams, said, “It’s basically an affirmation to other investors that they’re stepping up and are effectively shoulder to shoulder with their new investors.” He said that the practice was designed to create momentum.
But, he added, “If I were investing, I’d discount that.”
Still, Wilpon and Katz’s investment in their own minority stakes may indicate that they have more money than previously believed.
The document does not address one of the serious financial concerns hanging over the team’s owners: how much, if anything, they will have to pay to the Madoff trustee.
“You might not have that in the initial document,” said Robert Boland, a sports business professor at New York University. “It’s something you’d negotiate for. But when you’re buying such a small share, you don’t have much power to structure a deal. At 4 percent, it’s take it or leave it.”
As for the more minor details, there was no shortage of specifics: the $20 million would include one free trip with the team during the regular season (the Mets would pick the city); one free weekend’s stay at spring training; and a lot of potential lunch dates — with broadcasters and former players. A luncheon with the manager and general manager? Off-season only, the document says. Merchandise? Discounts, but not giveaways
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