For weeks, the New York Mets have been looking to bring in up to 12 limited minority partners each holding a $20 million stake (technically 10 as Sterling Equity will be buying two), or a 4% interest in the Mets. But, new details provided by The New York Times through a copy of the term sheet shows investors get little, if anything, for the large outlay. According to the term sheet, “Proceeds will be used to pay down Club debt and for working capital of the Club.”
So, what do you get in return? Not a heck of a lot. Here’s what you can consider “good”:
- Investor will have the opportunity to participate In any SterlIng Equities real estate development around Citi Fleld.
- Investor will not be required to make any capital contributions for the 6 years (in other words, no cash calls)
After that, it’s small pickings. And, one might suggest, insulting.
For $20 million, here’s where “insulting” comes into play (emphasis added):
- Just one dedicated and named Owners' Parking Space (up to 4 additional parking spots per event per unit based on availability)
- Business card with "Owner" title
- Shared access to Owners' Seats and “VVIP Owners” Area next to dugout with occasional player, manager, and front office visits while watching batting practice, as well as occasional visits to the clubhouse
- Fractional Units of the 4% purchase may not be sold but Investors may form entities up to four beneficial owners for the purposes of buying a Unit.
- If the Investor does not exercise their right to liquidate their share after 6 years (I) the liquidation preference of the Unit be eliminated (they will become common equity Interests) and (II) the Investor will be subject to pro rata capital calls.
- Spring Training accommodations for one weekend at official Club hotel
- Season ticket requests for friends and family (note, it does not say they are free)
- On Opening Day, you get tickets to game and Owners' reception' and tickets to Mets Welcome Home charity dinner.
- Mr. Met made available for Owners at Citi Field events (note, not elsewhere, just Citi Field)
- Subject to advance reservation and with Owners' discount on usage charge, use of various hospitality spaces within Citi Field including the Auditorium, Business Center, Corporate Board Room (40 seats) , General Partners Dining Room (with room for cocktails for 100 and dinner for 40)
- Discounts on all MLB-licensed merchandise
- Access to purchase tickets to All-Star events/accommodations, as well as a discount for postseason tickets and events
That’s just a sampling. But, if there were ever a case of saying, “We really would rather not have you here, but we’d love your money,” this may be the best example. Note that there is nothing mentioned about being able to expand purchases into a larger percentage of the Mets. While it doesn’t say it, what the term sheet spells out is the Mets would like to borrow $20 million from 10 individuals or groups with the chance to pay you back. At least for 6 years you don’t have to get hit up for more money through cash calls.
Maury Brown is the Founder and President of the Business of Sports Network, which includes The Biz of Baseball, The Biz of Football, The Biz of Basketball and The Biz of Hockey, and is a contributor to Forbes SportsMoney blog.. He is available as a freelance writer. Brown's full bio is here. He looks forward to your comments via email and can be contacted through the Business of Sports Network (select his name in the dropdown provided).
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