The New York Times reports today that the proposals fielded by the Wilpons in their efforts to find a “strategic partner” (read: cash infusion) suggest that most of the interested parties are interested in more than the 25 percent share of the Mets that the Wilpons want to sell. This can be inferred by the fact that the man tasked with selling that share told the times “Let’s just say that a noncontrolling stake could be north of 25 percent.” Many other bids, the Times reports, are only interested in majority stakes.
This is not surprising. As most observers, this observer included, said at the time of the Wilpons’ announcement that they were seeking an investor, being a minority shareholder in a closely-held corporation is rarely anything a person of means wants to be. There are few people less powerful than a 25 percent stakeholder in such a beast, and unless the cash flow is really impressive -- which, at least for the time being may not be the case for the Mets -- there is very little upside.
My guess is that if the Wilpons do hold on to a majority stake, their minority shareholder will be way closer to 51 percent than they originally hoped. And he or she may very well have options and opportunities to become the majority shareholder one day. If not, the Wilpons will be dealing with a much smaller group of investors.
In other Wilpon news, the Daily News reports that the late mother and brothers outgoing chief counsel of the Securities and Exchange Commission were Madoff investors themselves. And even better, now the brothers are subject to lawsuits by Irving Picard seeking their Ponzi scheme gains. The News suggests -- and I’m sure at least one commenter in this thread will agree -- this helps the Wilpons in that, hey, if family members of the SEC were Wilpon investors and they could be duped, how should the Wilpons ever have known?
Another interpretation, however, is that if the family of the SEC’s top lawyer were invested with Madoff, it’s possible that the SEC was less-than-vigilant than it should have been in investigating him, and thus its failure to do so should not be viewed as a legitimate defense of the Wilpons. Sure, such a thing would be an insult to the SEC’s reputation if it had a stellar track record of investigating industries and institutions to which its employees owe allegiance for various reasons. But that, sadly, is simply not the case.
The SEC has routinely, either because of incompetence or because of conflict of interest, failed to catch and punish those who should be caught and punished for investment misdeeds. And I’m sure that Picard will have witnesses explain that to any jury that sits in judgment of the Wilpons.
