I recently spoke with an anonymous source who works in the financial industry and is an avid Mets fan about whether or not he would have any interest in potentially becoming a minority owner of the Mets. He basically responded saying that no one should want to become a minority owner because the benefits that you get from becoming an owner are available for a much cheaper sum and the investment has essentially no upside.
Here is what my source had to say:
“Under the Wilpons’ plan to raise much needed capital for the struggling Mets, for the ‘small’sum of $20 million you can have the privilege of lending the Mets money for six years at a ‘whopping’ three percent interest rate (only a tad less than what you get by buying risk free government securities like treasury bills).
“And, if you should decide not to be re-paid after six years (and given how much debt the Mets already have it is unclear how you would be repaid) you would be the proud owner of four percent of a team at the bargain price of $500 million plus the hundreds of millions of debt already outstanding.
“To me, this seems like a steep price to pay for a team that not only lost $70 million last year, has too much debt, and had to take out two emergency bridge loans in the past year, but who also lost its star player.
“But, for that $20 million here’s what you get: a business card to carry around that says ‘owner’ on it, the privilege to hang out with Mr. Met (occasionally, though not likely at your kids’ birthday parties), the right to attend an owners workout day, and a parking spot.
“The biggest benefit of all is you will be able to have one of the many luxury boxes that the Mets have been unable to lease – a value of $250,000-$500,000.
“As someone who is an experienced investor in relatively risky securities, this seems like a highly speculative investment proposition, without nearly enough upside.
“Even as an extremely avid Met fan, if I had $20 million available to invest today, instead of lending the Mets that money I would much prefer to invest that amount in risk free treasury bills, buy the best season tickets possible (getting all the benefits that come with that–including parking), and pick up other fun Mets related activities that are frequently available at charitable functions – with the added benefit of donating money to worthy causes – rather than potentially giving money away to the Wilpons.”