The New York Mets are seeking to extend their existing credit facilities for one year, giving the team’s owners a cushion while they seek a buyer amid a pandemic, two people familiar with the matter told Sportico.
The club’s $250 million loan led by JPMorgan Chase & Co. is scheduled to expire at the end of July, said the people, who were granted anonymity because the matter is private. The team controlled by the Wilpon family is seeking to push the term to July 31, 2021, the person said.
The team declined to comment. A spokeswoman for JPMorgan Chase didn’t return an email seeking comment.
The Mets retained Allen & Co. to oversee the sale process, which has already drawn interest from private equity titans Josh Harris and David Blitzer, whose sports portfolio includes the NBA’s Philadelphia 76ers and NHL’s New Jersey Devils, and former big-league star Alex Rodriguez.
The COVID-19 pandemic has interrupted the usual sale process, which would include face-to-face negotiations and, eventually, management meetings. Moreover, due to labor strife there’s no guarantee baseball will even be played this season.
Owners and players haven’t been able to agree on the economic and health rules that would allow for the start of the regular season, which was delayed by the pandemic. Any plan likely wouldn’t include fans in ballparks, which would cost teams tens of millions in associated revenue.
Chuck Baker, co-chair of the sports industry group at the O’Melveny law firm, said pushing out the loan is a prudent move by the Mets, who in December said they were in talks to sell up to 80% of the Major League Baseball team to hedge fund billionaire Steve Cohen.
“Given the current uncertainty surrounding the MLB season, and negotiations with the MLBPA, it seems to make good sense to extend their credit facility, particularly during a public sales process,” Baker said.
Terms of the proposed deal with Cohen allowed for the current owners to retain control of the team for five years. Talks fizzled after Cohen, who already has an 8% stake in the team, sought to alter the part of the agreement that pertained to the timetable for control.
The Mets lose at least $50 million annually – even before the Coronavirus shutdown of U.S. sports leagues.
Fred Wilpon took control of the franchise in 2002 at a valuation of about $391 million.