Careers

11:44 AM
Justin Grant
Justin Grant
Commentary
Connect Directly
Google+
Twitter
RSS
E-Mail
50%
50%

Are the Mets and Dodgers Too Big To Fail? Two Hedge Funds Apparently Think So

For the second time this year, a hedge fund is stepping into the batter's box.

For the second time this year, a hedge fund is stepping into the batter's box.

Last week, JPMorgan's Highbridge Capital agreed to loan the struggling Los Angeles Dodgers $150 million. The historic franchise needed the cash infusion to help it make payroll, a shocking comedown for a team best-known for breaking baseball's color barrier with the debut of Jackie Robinson in 1947.

The team filed for bankruptcy last month after Major League Baseball rejected a $3 billion broadcasting deal that would have enabled Fox Sports to broadcast its games for the next 17 years.

From HedgeFund.net:

The conditions of the one-year loan allows for the Dodgers to have initial access to $60 million with future withdrawal of $90 million. The loan also comes with a 10% interest rate.

Highbridge, in turn, will get first claim on the Dodgers assets, as well as receive a $4.5 million deferred commitment fee plus 0.5% of the unused part of the loan, payable monthly, according to court papers.

The Dodgers came to an agreement with Highbridge since the team didn't have enough cash to make payroll on June 30. The team listed assets of approximately $1 billion and debt of as much as $500 million in its Chapter 11 petition.

Meanwhile the team that was created to fill the void in New York after the Dodgers defected to the west coast is closing in on a hedge fund-aided bailout of its own.

Hedge fund manager David Einhorn is reportedly close to finalizing a deal to buy a 33 percent stake in the New York Mets for $200 million. The deal is a last-ditch effort by Mets owner Fred Wilpon to hang onto the team as he faces a $1 billion lawsuit filed against him by victims of Bernie Madoff's Ponzi scheme.

From ESPN.com:

If the Mets pay back Einhorn within a set period of time, he retains 16 percent of the team. If they don't pay him in time, he can exercise an option to gain 60 percent of the team. Forbes reports that the option would cost him only $1 on top of his original investment.

As the Senior Editor of Advanced Trading, Justin Grant plays a key role in steering the magazine's coverage of the latest issues affecting the buy-side trading community. Since joining Advanced Trading in 2010, Grant's news analysis has touched on everything from the latest ... View Full Bio
Comment  | 
Print  | 
More Insights
More Commentary
5 Tips On How To Prepare For A Data Breach
If you are a financial institution your cyber security defenses will be breached -- again and again. Here are five tips to respond quickly and minimize damage.
Wall Street CIOs Have a Vendor Management Problem
If Wall Street CIOs want to stay ahead of competition and ensure high-speed trading software doesn't start the next flash crash, they need better insight into vendor delivered software.
Technology Innovation Returns to Financial Services
Capital Markets Outlook 2015: Following a few years dominated by regulatory compliance and cost saving technology initiatives, financial organizations are finally investing in innovative technology and tools.
Voice Biometrics Improve Transaction Monitoring Fraud Detection
Why voice biometrics should be a part of your fraud prevention strategy in the call center.
Fintech Fast Forward 2015
What will shape the future of Fintech in 2015 and beyond?
Register for Wall Street & Technology Newsletters
White Papers
Current Issue
Wall Street & Technology - Elite 8, October 2014
The in-depth profiles of this year's Elite 8 honorees focus on leadership, talent recruitment, big data, analytics, mobile, and more.
Video
Exclusive: Inside the GETCO Execution Services Trading Floor
Exclusive: Inside the GETCO Execution Services Trading Floor
Advanced Trading takes you on an exclusive tour of the New York trading floor of GETCO Execution Services, the solutions arm of GETCO.