Alex Rodriguez and Jennifer Lopez have reportedly ended their attempt to buy the New York Mets.
That’s not exactly a shocker—it was always a huge long shot. I provided four reasons the couple would never buy the baseball team three weeks ago. According to multiple sources, the attempt by Rodriguez and Lopez never got any traction. They never got a firm commitment from any investors they spoke with.
Why not? Rodriguez wanted to be the managing partner of the Mets while he and Lopez were going to put in only $50 million to buy the team. Rich guys like Wayne Rothbaum and Richard Tsai were never going to invest hundreds of millions of dollars in the Mets and turn the keys of the team over to Rodriguez.
Assuming the Mets sold for Forbes’ $2.5 billion valuation (including $350 million of debt), Rodriguez wanted to call the shots while putting in just over 2% of the equity. Letting an investor with such little skin in the game run the show can be dangerous.
Think back to the Arizona Diamondbacks. Jerry Colangelo was the original managing partner of the expansion team even though he owned a very small portion of the equity. Colangelo put together a roster that won the 2001 World Series, the team’s fourth season.