The Work

May 26, 2011 4:26 PM

Bingham Helps Einhorn Make Mets Deal

Posted by Brian Baxter

The New York Mets announced Thursday that hedge fund manager David Einhorn was selected as the team's preferred partner in a $200 million deal for a minority, non-operating investment in the baseball franchise.

Einhorn, who is the head of New York-based hedge fund Greenlight Capital, turned to a legal team well-versed in professional sports transactions. Bingham McCutchen corporate partners John "Jack" Concannon III and Steven Taibl in Boston are leading a team from the firm advising Einhorn.

Concannon, who was not immediately available for comment on Thursday, is an old hand at major sports deals. He was part of a team of lawyers representing the former owners of the Boston Red Sox on the team's $700 million sale to a group led by hedge fund titan John Henry and television executive Tom Werner in 2003, according to this story from The American Lawyer.

Earlier this year Concannon advised private equity billionaire Tom Gores on his acquisition of the National Basketball Association's Detroit Pistons. Concannon and Taibl also previously advised real estate billionaire Stephen Ross on his $1.1 billion acquisition of the National Football League's Miami Dolphins in 2009.

Einhorn will become a "preferred partner" of the Mets, and according to public statements by current majority owner Fred Wilpon, he could also have a say in how the franchise is run. The current deal, which will not be finalized until late June, does not include a stake in the SNY television network owned by the Mets and is for less than 49 percent of the team.

SEC filings show that Bingham previously handled other corporate work for Greenlight, the hedge fund that Einhorn made famous for his 2008 book about his six-year battle with private equity firm Allied Capital and the SEC. (Einhorn also made news this week by calling for the resignation of Microsoft CEO Steven Ballmer. Greenlight owns 9.1 million company shares.)

Wilpon, who made his fortune in real estate, owns the Mets through his Sterling Equities group of companies. But Wilpon was forced to seek out a new partner earlier this year after being hit with a $1 billion suit filed by Baker & Hostetler partner Irving Picard, court-appointed trustee for Bernard L. Madoff Investment Securities.

Picard's clawback suit against Wilpon and his Sterling partners--the defendants responded to the 381-page amended complaint in March with their own 107-page motion to dismiss--forced the Mets owners to raise capital by taking on a partner. Wilpon recently told Sports Illustrated that the Mets are $427 million in debt and could lose $70 million this year. (The New Yorker profiled Wilpon and his Madoff troubles this week.)

Davis Polk & Wardwell is a longtime legal adviser to Wilpon, having handled his $135 million purchase in 2002 of the remaining stake of the Mets he didn't already own. Davis Polk senior counsel Robert Fiske, Jr., who is handling Madoff-related litigation with partners Karen Wagner and David Caplan, advised Wilpon on that matter along with former partner Lewis Kaden. (Kaden is now vice-chairman of Citigroup, the sponsor of Citi Field, a brand new 41,800-seat stadium the Mets moved into two years ago after leaving their longtime home named after legendary New York lawyer Bill Shea.)

Caplan, the global cohead of Davis Polk's M&A practice, is representing the Mets on their negotiations with Einhorn, along with corporate partner John Butler. The team has entered into an exclusive negotiating period with Einhorn and his counsel in order to reach a definitive agreement on the sale of a stake in the franchise.

Mets general counsel David Cohen has also taken a key role in the ongoing negotiations. Cohen told sibling publication The National Law Journal in 2007 that he usually turns to Davis Polk, Alston & Bird, and Herrick, Feinstein for outside counsel. Sterling's general counsel is Gregory Nero.

Wilpon had many suitors for the minority stake in the franchise. Hedge fund kingpin Steven Cohen of SAC Capital, Skybridge Capital managing partner Anthony Scaramucci, and founder James McCann were among the leading contenders for the stake, according to the New York Daily News. Cohen reportedly fell out of the bidding earlier this month.

The minority share sale to Einhorn leaves Sterling and Wilpon in control of the team they first bought into with a 1 percent stake in 1980. Former New York Governor Mario Cuomo, currently of counsel at Willkie Farr & Gallagher, has been mediating the ongoing dispute between Picard, Sterling, and Wilpon, albeit with little success. (Another member of the Sterling ownership group is Marvin Tepper, a former real estate partner at now-defunct New York firm Botein Hays & Sklar.)

Stephen Greenberg was financial adviser to Sterling and Wilpon on the recent ownership negotiations. Greenberg is the son of Hall of Famer Hank Greenberg and managing director of boutique investment bank Allen & Company. The younger Greenberg is also a former managing partner of Manatt, Phelps & Phillips, having left the firm two decades ago to enter the banking world, where he carved out a niche with several high-profile sports deals, according to a profile in Fortune last year.

Any final deal requires the approval of Major League Baseball. It probably doesn't hurt that the 42-year-old Einhorn grew up in Milwaukee, where his best friend lived next door to Bud Selig, who has been commissioner of the league since 1992.

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