David Einhorn is paying $200 million for a minority stake in the New York Mets. He could gain majority control of the team for a heck of a lot less than that, according to Forbes.com.
If the Wilpon family does not pay back Einhorn's $200 million investment in three years, the hedge fund manager can obtain a 60 percent stake in the team for an additional $1, Forbes reported. So his total investment for control of the team that some have valued at more than $1 billion would be $200,000,001.
Einhorn has agreed in principle to purchase roughly 33 percent of the team for the $200 million, which will infuse cash and keep the organization solvent in the immediate future. The deal must still be approved by Major League Baseball.
Einhorn isn't out even if the Wilpons pay back the $200 million. He would still retain one-sixth of the team, a source told ESPNNewYork.com's Adam Rubin.
By taking the risk that they lose control of the team the Wilpons get to be solvent and continue to pay the money they owe to creditors and for team operations until the resolution of a $1 billion-plus lawsuit brought by the trustee trying to recover funds for the victims of Bernard Madoff's Ponzi scheme.
If the Wilpons lose big to trustee Irving Picard, the Einhorn terms will not matter since they will not have the financial means to retain the team. If there is a favorable lawsuit resolution and the Wilpons are solvent in three years, they can figure out a way to pay back Einhorn and stave off his becoming the majority owner.
Einhorn is shielded from any obligations should the Wilpons have an unfavorable resolution in the Ponzi scheme case, two sources told ESPNNewYork.com.
"Through the entire sale process, there has been and continues to be widespread misinformation and sometimes completely baseless and unfounded speculation about the terms of the potential agreement," the Mets said Wednesday in a statement.
Adam Rubin covers the Mets for ESPNNewYork.com.