Home » Fred Wilpon’s sale of New York Mets broadcast channel SNY a dud
Business

Fred Wilpon’s sale of New York Mets broadcast channel SNY a dud

Fred Wilpon's sale of New York Mets broadcast channel SNY a dud

He may have sold the New York Mets for a record price last year, but Fred Wilpon is striking out when it comes to selling the sports channel behind the Major League Baseball team, The Post has learned.

Wilpon last fall scored $2.475 billion — the most ever paid for an MLB franchise — when he sold the money-losing Mets to long-time fan and hedge fund billionaire Steve Cohen.

But now, sources say, the 84-year-old real estate developer is having trouble offloading the entity that owns exclusive rights to broadcast Mets games — called SportsNet New York, or SNY — despite the fact that it still makes money hand over fist.

In February, SNY’s parent corporation, Sterling Equities Sports Group, which Wilpon controls together with his long-time partner Saul Katz, sent out sales books seeking roughly $1 billion for SNY, sources said.

Fred Wilpon and Jeff Wilpon sitting together at a game
Fred Wilpon, seen at left with businessman son Jeff Wilpon, isn’t having luck unloading SNY.
AP

Cable giants Charter Communications and Comcast, both minority investors in SNY, were granted first dibs but said no, a source said. The entity that owns exclusive rights to broadcast Yankees games, known as the YES Network, also looked and passed, sources said.

Sinclair Broadcast Group — the nation’s largest owner of regional sports networks, or RSNs — is not interested, said a source.

Sinclair’s snub comes despite the fact that the broadcast giant has signaled interest in expanding its troubled sports business by bidding for NBCUniversal’s seven RSNs. And as The Post reported last week, the auction would include an 8 percent stake in SNY owned by Comcast, NBC’s parent company.

Steve Cohen in a tie and jacket
Mets owner Steve Cohen has little incentive to bid for SNY.
REUTERS

The strikeouts are happening even as the Mets rise to first place in their division as billionaire Cohen beefs up the team, including the signing of All-Star shortstop Francisco Lindor.

Viewership for the Queens team is also on the rise with the Mets having averaged 237,000 viewers per game through through June 20 — a rise of 22 percent from pre-pandemic 2019 levels, according to Nielsen.

There was a time SNY was the crown jewel of Wilpon’s sporting empire. And it still makes plenty of money, generating about $150 million a year in pure profits, sources said.

Citi Field
Viewership for the Mets, whose home stadium is Citi Field in Queens, is rising.
AP

But the sale comes as the business of RSNs come under significant pressure because they rely on sales to cable customers, who are dwindling daily thanks to the growth of streaming video.

Meanwhile, Wilpon and Katz have loaded down the profitable SNY with more than $800 million in debt over the years, creating yet another sales hurdle because they cannot lower the price below what they need to pay off the debt.

“They levered against it to fund other stuff,” including the money-losing Mets, said a source who considered buying SNY and passed.

One sports industry banker said he thinks investors are mostly fearful of becoming the next Sinclair, which took out $8 billion in debt to fund its 2019 acquisition of 21 regional sports networks, now called Bally Sports, only to watch the value of the investment plummet as the pandemic froze live sporting events and accelerated cord cutting.

Fred Wilpon controls Sterling Equities Sports Group with business partner Saul Katz, right.
Fred Wilpon controls Sterling Equities Sports Group with business partner Saul Katz, right.
Anthony J. Causi / New York Post

Junior debt tied to Sinclair’s 2019 acquisition is now trading at below 60 cents on the dollar.

“The Sinclair thing is such a disaster. Why would you follow that?” the banker said.

So long as SNY continues to throw off cash, Wilpon and Katz have little incentive to sell it for less than the debt, some $680 million of which they expect to refinance next year.

While refinancing could lead to higher interest expenses, SNY also benefits from super-low costs via a sweet deal to pay the Mets a below-market price of about $85 million a year for rights to its games.

And that deal, which Wilpon and Katz hashed out when they still owned the Mets, doesn’t expire in 2035.

At that time, Cohen could take over the broadcast rights for himself at no cost, giving him little incentive to bid for it now.

Sterling Equities and Sinclair did not return calls for comment. The YES network and Steve Cohen’s spokesman declined comment.

About the author

mm

Julia Mangels

Julia has handled various businesses throughout her career and has a deep domain knowledge. She founded Stock Market Pioneer in an attempt to bring the latest news to its readers. She is glued to the stock market most of the times and just loves being in touch with the developments in the business world.

Add Comment

Click here to post a comment

Your email address will not be published. Required fields are marked *