Clause in Citi Field lease could impede Steve Cohen’s Mets purchase
By Dana Rubinstein and David Waldstein
Steven Cohen’s long, arduous pursuit of the Mets is headed toward a conclusion, but New York City may throw up a last-minute roadblock.
Mayor Bill de Blasio’s office notified the Mets and MLB last Friday that they were looking into whether the team could be legally sold to Cohen, a spokesperson for the mayor said Wednesday.
There is no indication that the mayor’s office is bent on thwarting the deal. But it has a 30-day window, which began last Friday, to collect information and potentially take action as the leaseholder of Citi Field, the Mets’ stadium in Queens.
“The Mayor has an obligation to the people of New York City to closely examine new leases on culturally important and incredibly valuable city-owned land,” said Bill Neidhardt, a spokesperson for the mayor.
USA Today first reported that the mayor might have the power to determine whether Cohen, as the employer of a felon, is qualified to be the new owner of a commercial venture on city-controlled property.
Cohen, a billionaire hedge fund manager who grew up as a Mets fan in Great Neck, N.Y., entered into an agreement last month to buy the Mets from Fred Wilpon and Saul Katz, the principal owners of the team, for about $2.42 billion. It seemed that the only remaining hurdle for Cohen to clear before taking over the team would be a vote by the owners of the other 29 teams in MLB, and many people within baseball expected Cohen to have little trouble getting the requisite approval from 23 owners.
But de Blasio could theoretically obstruct the deal based on the 99-year lease agreement between the Mets and New York City, which specifically rules out certain “prohibited” persons as potential owners. The Mets lease Citi Field from the city.
The mayor’s power lies in the language of the lease agreement, which is a public document. It stipulates that if there is a transfer of ownership of the team, the new owner cannot be a felon or a person who has “controlled” a felon.
Cohen has never been charged with a crime, but his former company, SAC Capital Partners, was found to have engaged in insider trading in 2014 and was forced to pay $1.8 billion in fines. One of his employees, Mathew Martoma, was convicted of insider trading and sentenced to nine years in prison.
The Citi Field lease states that a transfer of ownership is a “permitted transaction” only if the buyer is not a “prohibited person.” The lease agreement defines a “prohibited person” as anyone who “directly or indirectly controls, is controlled by, or is under common control with a person that has been convicted in a criminal proceeding for a felony or any crime involving moral turpitude.”
The Mets declined to comment, as did a representative for Cohen.
Whether the mayor can — or wants to — hold up the sale to Cohen remains to be seen, and any attempt to block the transaction would surely be met with legal challenges. But the process could put on hold some of the hopes of Cohen and legions of Mets fans, many of whom are eager for Cohen to take over the club before the start of the new year and begin pumping some of his billions into the club’s operations and roster.
Cohen has already announced that he will hire Sandy Alderson, the former Mets general manager, to run his baseball operations department, and the current Mets owners are eager to sell the team before the end of the year.
De Blasio previously expressed his favored choice for new Mets owners, and it was not Cohen. In August, he said he supported the bid by a group headed by singer and actor Jennifer López and her husband, Alex Rodríguez, the former baseball player and current television analyst.
“If a very important franchise like the New York Mets ended up being led by a people-of-color ownership group, I actually think that would be very good for baseball and very good for this country,” de Blasio said at the time.
López and Rodríguez made a competitive bid, with López as the control person, but the Mets’ owners chose last month to sell to Cohen.
Another potential beneficiary, in the unlikely case the Cohen agreement falls through, would be the group headed by Josh Harris and David Blitzer, who own the New Jersey Devils of the NHL, and the Philadelphia 76ers of the NBA.
The sale of the Mets to Cohen appeared to be scuttled once before, after an initial agreement had been reached at the end of last year. But in January the deal fell apart over control of the team during a five-year interim period. Months later the Mets reopened the bidding and narrowed the field to three potential candidates, including Cohen, the López and Rodríguez group and the Harris and Blitzer group.