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
Donít Perform Surgery on Yourself: The Case for Managed IT Services
Instead of putting systems and solutions in the hands of experts who specialize solely in managing the security and integrity of IT assets, many financial services firms react to security incidents by insisting on total control.
Hacking the Hackers: The Legal Risks of Taking Matters Into Private Hands
Private groups are beginning to fight back against foreign sources of malware and credit fraud, but methodologies put these digital crusaders and their employers at serious legal risk.
Mobile Hot, Cloud Not in Financial Services
A survey conducted by the Harvard Business Review in conjunction with Verizon looked at technology trends in various industries.
Interactive Data Launches Continuous Fixed Income Pricing Service
Independent intra-day FI pricing is helping to shine light on the opaque fixed income market.
Gartner: 75% of Mobile Apps Will Fail Security Tests Through 2015
The rise of BYOD means enterprises must implement security testing and containment solutions, according to new Gartner research.
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.