So how much money did the Wilpons lose by torpedoing Steve Cohen’s $2.6 billon handshake to purchase the Mets?
It’s too early to tell in the early innings of the nation’s fight to contain the COVID-19 outbreak. But you can bet the price has plunged since the Cohen deal collapsed in February, with Citi Field gone dark and all that game-generated revenue suspended indefinitely.
“Trying to sell the team in the coming months, it’s got to be worth a lot less,” said Smith College economics professor Andrew Zimbalist, a nationally renowned authority in the business of sports. “If I had to a pick a number, I’d pick one between $1.5 and $2 billion.”
Either way, that would be a crusher for the Wilpons, who were on the verge of completing a sale that would have been an MLB franchise record. Zimbalist is quick to point out, however, that there are a multitude of factors at work in any current valuation of the Mets, including the rekindled pursuit by the glamour duo of Alex Rodriguez and Jennifer Lopez.
The Mets remain a highly coveted baseball property, even in this devastating economic downturn, and Zimbalist cautioned against putting too much stock in these 2020 losses. A sports franchise, while often a vanity purchase for billionaires, is a long-term investment. Still, there is a great deal of unknown ahead, and that is likely to pose a problem for A-Rod in rounding up investors.
“As we emerge very slowly out of this mess that we’re in, provoked by COVID, the economy is going to lag and have all sorts of ups and down and create all sorts of uncertainty with higher rates of unemployment and more price instability than we’re used to,” Zimbalist said. “That, and the fact that the economy is going to be limping for a couple of years, that could have an impact on either A-Rod’s assets or the assets of the people that come into partnership with them . . . It’s a very difficult environment in which to buy this kind of wealthy asset, whether it's a baseball team or a company or real estate. Any of that stuff is very problematic.”
The Mets already were losing $40 million to $60 million annually, according to some reports, and now are down another 40% based on the missing gate revenues, which include ticket sales, concessions and sponsorships. All of that debt has to be assumed by the next buyer, on top of the sale price -- unless the Wilpons get desperate enough to throw in SNY, which they have never intended to do.
Together, A-Rod and J. Lo have a reported net worth of approximately $700 million, so they’d need some deep-pocketed partners to pull this off, perhaps too big a group for MLB’s liking. Would their rich pals be willing to take such a gamble in this climate? And would the Wilpons need the cash badly enough to unload the Mets at a heavily discounted price?
“I think right now we’re in a little bit of a gridlock because I think, even for a multibillionaire, there’s not enough visibility as to what the future looks like to make a $2-billion-plus decision on this,” said Vince Gennaro, associate dean at NYU’s Tisch Institute for Global Sport. “I think in six months, in 12 months, it’ll be a little different story. I think whoever acts will act early — but not this early. We’re not even close to the new normal yet. We’re still in the middle of the crisis. I think as the crisis matures, someone will have a vision of what this will look like.”
As far as the Mets and A-Rod are concerned, an industry source said Tuesday that the former Yankee and J. Lo huddling with JP Morgan is “standard practice” and does not suggest they are any closer to purchasing the franchise. It’s also unclear what A-Rod’s role would be in this arrangement, but it’s reasonable to assume that the three-time MVP would want to have the final word on baseball decisions.
“I think it won’t be easy for A-Rod and J. Lo to find partners,” Zimbalist said. “I suspect that if they do, those people will also want to have some management influence on the team and that A-Rod is going to want to control it. I don’t know why those people would feel comfortable with A-Rod controlling the management of the team. I don’t think he’s shown himself to be particularly adept in management of himself, let alone management of an entire baseball team.”
That won’t stop A-Rod from trying. And based on the fans’ Wilpon fatigue, the next owner will be greeted like a conquering hero, as Cohen was for two months.
“They're going to believe that they could run this thing better than the Wilpons,” Gennaro said. “Whether that's true or not remains to be seen. Everybody's got an opinion on how well the Wilpons have run it, but they're going to see enormous upside. Whether it's really there and whether it could ever get realized is a whole different story.”