Mets' value could rise after Dodgers' $2B sale
New York Mets owner Fred Wilpon watches his team during a spring training workout. (Feb. 27, 2012) Credit: AP
The magic number for valuing Major League Baseball teams -- including the financially troubled Mets -- could rise dramatically with the agreement reached late Tuesday night on a record $2-billion sale of the Dodgers to a group that includes Hall of Fame basketball star and entrepreneur Magic Johnson.
Besides Johnson, the ownership group includes longtime baseball executive Stan Kasten. Mark Walter, chief executive officer of the financial services firm Guggenheim Partners, would become the controlling owner. The deal, which nearly doubles the previous record amount paid for a major U.S. professional sports franchise, is subject to approval by Major League Baseball, a person familiar with the transaction said.
"There's only one other person smiling bigger than [MLB commissioner] Bud Selig today and that's Fred Wilpon," Wayne McDonnell, associate professor of sports management at New York University, said of the Mets' principal owner.
The Mets, who lost $70 million last season and recently settled for $162 million with the trustee in the Bernard Madoff Ponzi scheme, raised $240 million through the sale of 12 minority shares at $20 million per unit. McDonnell said, "With everything the Mets have gone through . . . this grossly exorbitant purchase price of the Dodgers puts the Mets in a position that is quite favorable."
The Mets were valued at $719 million by Forbes before the Madoff settlement. "Everyone is going to use the Dodgers as the bellwether," McDonnell said. "If the Mets went to open market they would be just as valuable or more under these new rules."
Steve Greenberg of Allen & Co., the firm that handled the Mets' minority sales, said, "Those people who bought units in the Mets in the last month hopefully feel very good about their investment."
David Berri, professor of economics at Southern Utah University said the Mets, if need be, would now be in good position to borrow on the likely increased equity in the team. "If [Forbes] were to reassess the value of the Mets, you would expect them to go up," he said.
The Yankees could see their value, estimated at $1.85 billion by Forbes, rise. "The Yankees are in a different stratosphere," McDonnell said. "It wouldn't surprise me under these rules that you could see the Yankees being a $3-$5 billion franchise."
