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Tuesday, April 28, 2020

A-Rod, J-Lo and the Mets Ownership Possibilities

At the end of last year, it looked like the Wilpon family might sell the New York Mets to Steven Cohen for around $2.5 billion. The proposed sale was an unusual one. It did not include SNY, the Mets’ regional sports network, which is owned by the Wilpons; the Wilpons were also set to maintain some degree of control of the team for years after the sale. In what didn’t come as much of a surprise given the deal’s unusual nature, things fell apart and the Mets are once again looking for new owners. Enter Alex Rodriguez and Jennifer Lopez.

As reported by Scott Soshnick in Variety, Rodriguez and Lopez have sought help from JPMorgan Chase to raise funds to purchase the team. The piece notes that A-Rod and J-Lo have a combined net worth of around $700 million, which is obviously well short of what is needed to meet a potential purchase price over $2 billion. While that gap might appear insurmountable, an A-Rod/J-Lo owned Mets team isn’t as far-fetched as it may seem. First, consider that any purchase of this type is going to be financed with a considerable amount of debt. As Tom Ley wrote in his analysis of the Cubs’ previous sale — in the Ricketts’ initial plans to purchase the Cubs, there was talk of financing as much as $750 million of a potential $1.15 billion deal, though in the end, they paid $845 million and financed $450 million — teams are bought with significant amounts of financing:

Ted Lerner purchased the Nationals for $450 million in 2006, and the “Debt Primer Presentation” GSP sent to the Ricketts includes the details of that sale as a case study for how a highly leveraged purchase can work. Lerner took on the maximum amount of debt—$360 million—in order to purchase the team. Jim Crane bought the Houston Astros for $615 million in 2011, reportedly by taking on $300 million in debt; the Dodgers ownership group assumed $412 million in debt when they purchased the team in 2012.

Generally, teams are not allowed to carry debt greater than eight times their earnings before interest, taxes, depreciation, and amortization (EBITDA). That would present a problem for the Mets, but the rules are slightly different for purchases. Under the current CBA, the provision regarding sales essentially indicates the need for a plan subject to approval by the Commissioner

They could always raise the needed money from the gym owners of Florida…..

QLE Posted: April 28, 2020 at 01:15 AM | 19 comment(s) Login to Bookmark
  Tags: alex rodriguez, finance, mets being mets, mets mets mets

Reader Comments and Retorts

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   1. JRVJ Posted: April 28, 2020 at 11:16 AM (#5945403)
It seems odd that Messrs. Rodriguez and Lopez' joint net worth is only US$700MM.

In any case, it seems odd that they would commit over half of their net wort to buying a baseball team, UNLESS the terms are very good.

Sure, it'd be fun, but they don't need it (and at least A-Rod is supposed to be a very savvy investor, with solid links to the upper levels of Goldman Sachs, et. al.).
   2. The Yankee Clapper Posted: April 28, 2020 at 03:42 PM (#5945530)
Let’s not overlook that A-Rod can raise money just by signing his name. At $100 a pop, he only needs to autograph 10,000,000 baseballs to raise $1B.
   3. Jay Seaver Posted: April 28, 2020 at 04:19 PM (#5945554)
It seems odd that Messrs. Rodriguez and Lopez' joint net worth is only US$700MM.


I dunno, a billion dollars is a lot of money. A-Rod made ~$400M, figure taxes got $80M, that's $320, agents got $20M, that's before he's spent anything (or endorsements). Lopez's earnings are probably similar, and she hasn't had a hit movie or album in a while (Hustlers was well-liked, but not really a hit).

They're very rich, but "billionaire" is pretty rarified air.
   4. Adam Starblind Posted: April 28, 2020 at 06:14 PM (#5945615)
Queen Elizabeth is listed as $530 million. $700 million is a ton of money.

   5. michaelplank has knowledgeable eyes Posted: April 28, 2020 at 06:32 PM (#5945624)
Queen Elizabeth is listed as $530 million. $700 million is a ton of money.


Her early stuff was OK, but she's just resting on her laurels at this point.
   6. Steve Parris, Je t'aime Posted: April 28, 2020 at 06:46 PM (#5945629)
You would too if you were almost murdered by Reggie Jackson.
   7. never forget: the pee tape is 57i66135 Posted: April 28, 2020 at 07:02 PM (#5945632)
reasonably sure they would be new york's least detestable sports ownership group, if they get it.
   8. JRVJ Posted: April 28, 2020 at 08:17 PM (#5945658)
3, let's concentrate on A-Rod, as I have no idea about Ms. López's earnings.

BRef has his career earnings at $440MM, which doesn't count playoff money or endorsements. While you are right regarding taxes, agents and a divorce (A-Rod divorced his first wife), surely the money earned by A-Rod has been invested and produced very solid returns.

The references I made to A-Rod having solid links to the top tier at Goldman Sachs and such is from reports from when A-Rod opted out of his Yankee contract during the 2007 WS. It was reported at the time that A-Rod put out feelers to Yankee ownership via mucky mucks at Goldman Sachs.

AND according to BRef, Mr. Rodríguez earned $228.8MM from 2008 until he was released by the Yankees in 2016 (they show A-Rod earning $2.868,852MM in 2014, when he was suspended).

   9. Never Give an Inge (Dave) Posted: April 28, 2020 at 09:00 PM (#5945665)
I dunno, a billion dollars is a lot of money. A-Rod made ~$400M, figure taxes got $80M, that's $320, agents got $20M, that's before he's spent anything (or endorsements). Lopez's earnings are probably similar, and she hasn't had a hit movie or album in a while (Hustlers was well-liked, but not really a hit).

Your tax number is too low by half.

Sure, it'd be fun, but they don't need it (and at least A-Rod is supposed to be a very savvy investor, with solid links to the upper levels of Goldman Sachs, et. al.).

I think A-Rod is savvy enough to know he doesn’t know much about investing. Maybe he’s learned a few things over the years, but he generally seems to have hired experienced, trustworthy people to manage his money for him. Maybe they’re all scamming him but if so they’re doing a pretty good job of hiding it.

Lopez's earnings are probably similar, and she hasn't had a hit movie or album in a while (Hustlers was well-liked, but not really a hit).

She apparently had a 2-year residency at Planet Hollywood in Vegas that paid her nearly $100 million from 2016-2018. Before that, she made $12-20 million per year as a judge on American Idol, which she did from 2011-2015. I always take these numbers with a grain of salt, but she wasn’t just getting paid for making records and movies.

Link here: https://www.harpersbazaar.com/celebrity/latest/a30678551/jennifer-lopez-net-worth/
   10. JRVJ Posted: April 28, 2020 at 09:21 PM (#5945673)
I think A-Rod is savvy enough to know he doesn’t know much about investing. Maybe he’s learned a few things over the years, but he generally seems to have hired experienced, trustworthy people to manage his money for him. Maybe they’re all scamming him but if so they’re doing a pretty good job of hiding it.


Being savvy enough to have top-tier people handling your money is a pretty good way to remain rich / get richer.
   11. Never Give an Inge (Dave) Posted: April 28, 2020 at 09:36 PM (#5945675)
#10 yep.
   12. PreservedFish Posted: April 28, 2020 at 10:36 PM (#5945688)
I think A-Rod is savvy enough to know he doesn’t know much about investing. Maybe he’s learned a few things over the years, but he generally seems to have hired experienced, trustworthy people to manage his money for him. Maybe they’re all scamming him but if so they’re doing a pretty good job of hiding it.


He's super into it, he has a large and very visible investment portfolio and says he works as hard at business as he ever worked at baseball. I am sure he's smart enough to trust the right advisors, but I don't think he's just sitting back and letting other people make money for him. One can only guess how sharp he is at it, and how much he throws his weight around the AROD Corp conference room.

AROD Corp
   13. Never Give an Inge (Dave) Posted: April 29, 2020 at 05:48 AM (#5945742)
Yes, I’ve read the same articles you have. I’m sure A-Rod is very involved, and I’m sure he has ultimate authority to approve or reject deals. I didn’t mean to imply otherwise. But a number of those investments on his website were done when he was still a player. At that point he couldn’t have been as involved or known much about, for example, commercial real estate investing.

And none of this is meant to be disparaging. What he did was very smart. He set up a family office with about 20 people working for him. This is the same thing that people who make lots of money in other industries (tech, etc.) often do. They know that they’re not professional investors. They trust people who are, rather than letting their brother-in-law or high school buddy manage their money for them.

His portfolio is pretty interesting. Some definite winners in there, as well as a few that I’m pretty skeptical of but if he got in early enough if probably did ok. And a number of deals where there was some sort of marketing partnership involving A-Rod.
   14. Adam Starblind Posted: April 29, 2020 at 07:29 AM (#5945744)

He's super into it, he has a large and very visible investment portfolio and says he works as hard at business as he ever worked at baseball. I am sure he's smart enough to trust the right advisors, but I don't think he's just sitting back and letting other people make money for him. One can only guess how sharp he is at it, and how much he throws his weight around the AROD Corp conference room.


If you've seen Shark Tank, you know he calls ALL the shots.
   15. dlf Posted: April 29, 2020 at 02:52 PM (#5945901)
Monument Capital Management, founded by Alex Rodriguez and Ramon Corona in 2012 ...


I knew it was A-Rod's fault!
   16. bookbook Posted: April 29, 2020 at 04:07 PM (#5945934)
1) Taxes and advisors and super high end lifestyles cost a lot more than we realize.

2) Forbes really has no way to accurately gauge people’s wealth. People who made all their money with one company they tend to get right, but investments, hidden assets, non-stock appreciation is well-hidden. Almost everyone on Forbes list is wealthier than Forbes thinks they are (except Trump).
   17. Never Give an Inge (Dave) Posted: April 30, 2020 at 08:58 AM (#5946078)
2) Forbes really has no way to accurately gauge people’s wealth. People who made all their money with one company they tend to get right, but investments, hidden assets, non-stock appreciation is well-hidden. Almost everyone on Forbes list is wealthier than Forbes thinks they are (except Trump).

They pretty famously got Wilbur Ross wrong (too high). I think they probably miss a fair amount in both directions.
   18. flournoy Posted: April 30, 2020 at 06:06 PM (#5946340)
So why would Chipper Jones sell to A-Rod, anyway?
   19. Gonfalon Bubble Posted: May 01, 2020 at 02:23 PM (#5946687)
Queen Elizabeth is listed as $530 million.


But like aluminium or programme or chequebook, the British spell the word "quadrillion" with an "m" instead of a "quadr."

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