Steve Cohen Looks to Boost Stake As MLB Team Owner
The hedge fund billionaire is negotiating with the Wilpons, the current owners of the New York Mets, for an 80% stake in the team.
As uber-rich private equity and hedge fund billionaires are homing in on sports franchises, Steve Cohen is negotiating to up his current 8% stake in the Mets to 80%. Cohen paid $20 million for that stake in 2012.
However, the Wilpons aren’t yet relinquishing control of the baseball team. As negotiations stand, Fred Wilpon will be the Mets’ CEO for five years, and his son, Jeff Wilpon, will continue as chief operating officer for the same tenure. The Wilpons control the Mets via an entity called Sterling Partners.
“The Sterling Partners and Steve Cohen are negotiating an agreement in which Steve Cohen would increase his investment in the New York Mets,” the companies said in a statement.
Point72 Asset Management
Cohen Private Ventures will continue to manage Cohen’s stake in the Mets. Meanwhile, Cohen will retain his role as CEO of Point72.
Wilpon will remain as the control person of the Mets, and be responsible for compliance of league rules. He will be answerable to the MLB for the operations of the Mets.
Cohen – winner on the field and off it?
According to Fox Business, a major financial advantage could accrue to Cohen through his purchase of the Mets.
Cohen could get a tax break of as much as $150 million annually through amortization of the amount paid for the team, assuming it is $2.3 billion.
According to a 2004 law, the value of intangible assets of a sports franchise can be lowered through amortization over 15 years.
An additional benefit is an opportunity for Cohen to develop Willets Point, a 61-acre vacant site in Flushing, according to the NYPost. The Wilpons had agreed to construct 1,100 units of affordable housing at Willets Point by 2022, as well as a new public-school building. The Wilpons planned to develop the site with Stephen Ross. Ross and Cohen are friends. Willets Point is located adjacent to Citi Field, the ballpark to be managed by the Mets and Cohen.
Cohen and Mets – the future
Mets fans will surely be cock-a-hoop with the prospect of deep-pocketed Cohen having the reins to the Mets. He is a long time fan of the team, and a Cohen associate said he is sure to take a shot at ending the supremacy of the Yankees on the field.
Mets fans would have been chagrined to see Zack Wheeler depart to join their main competitor, the Philadephia Phillies.
With Cohen’s billions backing the team, things could change – dramatically.
[Related Story: Point72 Asset Management Loses 20 Portfolio managers ]
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