Steve Cohen broke the agreement he signed to buy the New York Mets, and it's now an open question whether he can buy a team again, two sources said.
The hedge fund billionaire signed a non-binding purchase agreement for the Mets months ago, known as the term sheet, which immediately gave Cohen more than half of the team's equity, while Fred Wilpon held control of the Mets for five years Association, said two sources.
Major League Baseball recognizes a single controller for each team who is expected to make all decisions.
"There is no fake control person. You can't let things go that way, "said a source.
The Major League Baseball constitution states: "Each Major League Baseball club has a controller who is responsible to Major League Baseball for the operation of the club and compliance with Major League Baseball rules and regulations, the ultimate authority and responsibility for all Club decisions. "
When he found that Wilpon would take control for five years while Cohen owned most of the team's share capital, Cohen felt uncomfortable with the business and was working to change the conditions.
"Steve thought he would control the shots. He would be the power behind the throne. Baseball refused, ”said a source.
Either he didn't understand what he was signing on the term sheet, or he believed that once he got the deal, he could change the terms significantly, a source said.
Given that he had previously bought a majority stake in the franchise, sources said Cohen actually assumed that he would have given details of the Mets process, including the front office and player staff. In the final round, the Wilpons were made clear that Cohen would not put down a binding agreement without a language that would allow him to gradually control the team in the five-year window.
"Why should someone raise $ 2.6 billion and have no say in the business they bought?" A source near Cohen told The Post. "That doesn't make sense. Anyone who tells you otherwise is not credible.
"The governance issues always had to be resolved and simply never got there."
As the Post reported on Thursday when the two parties sat down to clarify the final details of the five-year transition period, it immediately became clear that the Wilpons wanted Cohen to comply with the general terms and conditions of the agreement and pay over $ 1 billion in the right to wait and watch Jeff Wilpon manage the franchise without any input from Cohen.
From there things got toxic. The time sequence of the effects is cloudy. Sources indicate conflicting versions, the first of which were available. However, it is clear that Cohen tried to change the payment plan for his $ 2.6 billion purchase over a five-year period, and suggested spending smaller amounts in advance. Some sources claim that Cohen proposed to cut the $ 2.6 billion total.
Several sources also confirm that the Wilpons have attempted to codify Jeff's role in the Mets and have asked him to remain COO for at least five years. They also wanted a language that would give Jeff gradual but substantial salary increases for the five years each year, while maintaining the level of perks that he had grown accustomed to as the owner and COO.
In view of the Mets' notoriously precarious financial picture, these demands were seen as strange.
Even so, the Mets and MLB believe that Cohen acted maliciously and that, along with his balance sheet as a controversial hedge fund manager who was banned from managing third-party funds, he may not get owner support to buy a team again ,
"It would be in question," said a source close to the owner.
The Mets and Cohen officially canceled their deal on Thursday.
If things had progressed, they would have signed a purchase and sale contract, and MLB would have started studying Cohen and his finances to see if they would recognize him as the owner.
"There could have been approval issues," said the source near the owners.
The Mets are now planning a new sales process.
Cohen and the Mets declined to comment.