As reported by Bloomberg late last week, Comcast Corp. (Nasdaq: CMCSA, CMCSK) and Charter Communications Inc. are quietly selling their small stakes in New York's National League franchise, along with at least one other minority investor, after holding them for six years. In all, at least 10% of the Mets; privately held shares are going up for sale, the report says.
Currently, Comcast and Charter hold their estimated 4% stakes in the Mets indirectly through their investment in SNY, the team's premium cable sports network that televises most of its games. The MSOs will reportedly remain minority investors in the regional sports network even after the sale of their team shares closes.
Inner Circle Sports, a New York sports-focused boutique investment bank, is handling the sale. The Mets, Inner Circle, Charter, Comcast and Major League Baseball have all declined to comment on the report.
It's not like either cableco actually wanted to own a piece of the Mets, according to anonymous sources cited by the Bloomberg story. In particular, Philadelphia-based Comcast, which closely identifies with its various hometown sports teams, probably didn't want to be associated with a New York team. But both MSOs still bought their stakes in 2012 to help out Mets co-owners Fred Wilpon and Saul Katz, who were then reeling financially from the Bernie Madoff scandal and being sued by the court trustee representing Madoff's victims.
Concerned about the suit's impact on their finances and the team, Wilpon and Katz sold a dozen 4% stakes at $20 million each to raise money. They guaranteed the investors 3% interest, compounded annually, for six years and exempted them from capital calls. But the limited partnership investors were not granted any control over the team. Wilpon and Katz wound up settling the lawsuit for $162 million, less than they feared.
Among other things, the sale will eliminate one potential headache for cable titan John Malone by removing a conflict of interest for him. Malone's Liberty Media Corp. (NYSE: LMC), which holds a large stake in Charter, also owns baseball's Atlanta Braves club though an earlier deal.
— Alan Breznick, Cable/Video Practice Leader, Light Reading