Mets deal win-win for David Einhorn

5/29/2011 - MLB New York Mets

NEW YORK -- The final contracts haven't been signed yet, but the New York Mets' incoming minority owner, David Einhorn, was in the house Saturday night at Citi Field to kick the tires on his new investment and perhaps see what color he'd like to repaint the walls or change the carpet when he finishes spiriting the Mets away from Fred Wilpon and his brother-in-law, Mets co-owner Saul Katz.

Of course, none of them were willing to acknowledge that.

Wilpon has continued to insist that surrendering his majority stake is not going to happen. And Einhorn, a competitive poker player and president of an $8.9 billion hedge fund, said the same thing when he was introduced for the first time Thursday as the Mets' mystery bidder.

But you know whose voice speaks loudest of all when it comes to what we should really believe?

It's Bernie Madoff's, from his prison cell in North Carolina.

"Fred was not [at] all stock market savvy and [Mets co-owner] Saul [Katz] was not really either -- they were strictly real-estate people," Madoff said in the same New Yorker profile of Wilpon this week that got the Mets owner into trouble because of his disparaging remarks about Jose Reyes, Carlos Beltran and David Wright. "Although I explained the strategy to them, they were not sophisticated enough to evaluate it properly, nor were most of my other individual clients."

Meaning? Whatever can go wrong for Wilpon in this shotgun marriage with Einhorn probably will. Once again, Wilpon and Katz may have walked into a financial battle of wits insufficiently armed.

The question as Wilpon and Katz sought an emergency cash infusion to help the Mets has always been why anyone would be willing to give them the $200 million they desperately need without getting something besides a small slice of the team in return. There had to be something else in this deal, and as ESPNNewYork.com's Adam Rubin first reported Saturday, there is something else: Einhorn's agreement in principle with the team looks like a win-win deal for him.

That has to explain why the 43-year-old Einhorn -- who admitted he is so new to this ownership thing that he got lost on his way out of Citi Field on Saturday night -- was notably upbeat when asked about his pending buy into the team.

The Mets' bullpen had just blown a fine starting pitching performance for the second straight night -- this time a 7 2/3-inning, four-hit outing by Mike Pelfrey -- and lost 5-2 to the Philadelphia Phillies after taking a 2-1 lead into the eighth. And there were bad reminders everywhere of how far behind the Mets have fallen in this rivalry that's barely a rivalry these days. The holiday-weekend crowd of just 29,337 included a large number of red-clad Phillies fans who cheered loudly whenever the visiting Phillies scored a run or lashed a hit.

The Mets started Ruben Tejada at third and recent call-up Nick Evans at first base instead of meat-of-the-order anchors Wright and Ike Davis, who both remain out with injuries. The Mets' best player -- again -- was easily Reyes, who scored both runs and stole two bases. The defeat was also the Mets' fourth loss in the five games they've played since Wilpon torched the team's three biggest stars.

Nonetheless, Einhorn -- who elected to speak to reporters only via conference call rather than in person Thursday -- had this to say on his way out of Citi a couple of hours after the Fox TV network showed him smiling and watching the game from a luxury box with a longneck beer in one hand and a new-looking blue Mets cap atop his head:

"It was a lot of fun. It was beautiful -- absolutely fantastic. All is good," Einhorn enthused.

Einhorn had to be thinking of the sweeter-than-sweet terms of his deal, which is expected to be completed by the end of June.

Though the Mets are valued at $1 billion, sources told ESPNNewYork that Einhorn has an agreement in principle to receive about 33 percent of the team for $200 million -- a terrific discount from the actual $330 million value of that share.

In three years, Einhorn will also have the right to acquire an additional 27 percent of the team, which would make him -- not Wilpon -- the team's majority owner.

Wilpon can turn down Einhorn's offer. Then he would have to pay Einhorn back his initial $200 million investment, but -- get this -- Einhorn would still get to keep a 16-17 percent share of the team.

Which sets up this either/or bottom line: If Wilpon pays Einhorn back his $200 million, Einhorn will have essentially made Wilpon a three-year loan of $200 million, gotten back all of his initial money and still retained at least a $160 million slice of the team.

Or he winds up with a 60 percent controlling interest in the Mets if Wilpon can't pay him back.

Either way, the deal has a huge upside for Einhorn.

Wilpon and Katz? Not so much.

Wilpon's days and nights are already haunted by one stalking horse -- Irving Picard, the court-appointed trustee seeking to claw back $1 billion from Wilpon and Katz because of the Madoff scandal. Now Wilpon and Katz are about to forge an alliance with a financial lion who built his career on seeing opportunities or patterns developing in places where others didn't.

A few years ago, Einhorn was the first to predict that Lehman Brothers would collapse. A lot of analysts laughed at him. But he was right. He's been prescient about a lot of other mega-deals since.

No wonder Einhorn was smiling on his way out of Citi Field, despite the Mets' second ugly loss in two nights and the galling sound of the Mets getting cheered against in their own ballpark all night.

If you knew everything that Einhorn knows, you'd probably be smiling, too.