This past Tuesday, Steven A. Cohen, the head of Point72 Asset Management, cleared an important obstacle in his campaign to buy the New York Mets, winning approval of Major League Baseball’s Ownership Committee. Fred Wilpon and his brother-in-law Saul Katz, the team’s current owners, had accepted Cohen’s offer of approximately $2.4 billion on September 14th, after an auction process. Cohen triumphed over two other investor groups, one led by the former Yankees player Alex Rodriguez and his partner, the actress and pop star Jennifer Lopez, and another by Josh Harris and David Blitzer, experienced professional sports investors from the private-equity firms Apollo Global Management and Blackstone, respectively. In order for the deal to go forward, Cohen must not only demonstrate that he has the funds but also navigate a series of tests meant to assess his fitness as a potential member of the small club of (mostly) wealthy men who own major-league baseball teams. The ownership committee consists of eight team owners, seven of whom voted to approve Cohen. The approval process moves next to the league’s executive council. If the council signs off, the transaction goes to a full vote by all thirty teams in the league, which is currently scheduled for November 17th. Twenty-two of the twenty-nine other team owners must also vote yes for the deal to close. Until this week, winning their approval seemed like the biggest hurdle Cohen faced. But a small, nearly overlooked fact just emerged that has the potential to complicate Cohen’s plans.
Citi Field, the stadium in Flushing Meadows, Queens, where the Mets play their home games, sits on park land owned by New York City, which leases the land to the owners of the Mets. The lease contains a provision that gives the city the right to reject any new owner who fits the definition of a “prohibited person.” The agreement defines such a person as anyone who has been “convicted in a criminal proceeding for a felony or any crime involving moral turpitude or that is an organized crime figure,” or anyone who directly or indirectly controls “a Person that has been convicted in a criminal proceeding.” Cohen himself has never been convicted in a criminal proceeding, but his former hedge-fund firm, S.A.C. Capital Advisors, pleaded guilty in 2013 to securities fraud, and one of Cohen’s former employees, Mathew Martoma, was convicted of insider trading, in 2014. Early on, the provision might have seemed too obscure to pose a problem to Cohen, the Wilpons, or to Major League Baseball, but the Times recently reported that Mayor Bill de Blasio, who has openly backed Rodriguez and Lopez’s bid, notified the league that it would be investigating whether Cohen is eligible to buy the team. It is unclear whether the Mayor’s office will stop the deal, but it seems certain that the city could slow it down if it wanted to. When I contacted the mayor’s office, de Blasio’s spokesperson, Bill Neidhardt said, “The Mayor has an obligation to the people of New York City to closely examine new leases on culturally important and incredibly valuable city-owned land.”
As I documented in my book, “Black Edge: Inside Information, Dirty Money and the Quest to Bring Down the Most Wanted Man on Wall Street,” Cohen and S.A.C. Capital were, for several years, at the center of one of the most high-profile financial-fraud investigations ever conducted, which resulted in the indictment of the company. Cohen was never charged personally, but his firm paid $1.8 billion in forfeitures and penalties, and Cohen was required to shut it down. He also was barred from managing outside investor money until January, 2018. Martoma, a former S.A.C. portfolio manager, was sentenced to nine years in prison for insider trading at S.A.C., in what was billed as one of the largest cases of its kind. In the indictment of S.A.C., the U.S. Attorney for the Southern District of New York, Preet Bharara, was sweeping in his condemnation of the company: in the course of more than a decade, the indictment alleged, numerous employees engaged in insider-trading offenses involving more than twenty publicly traded companies, which generated hundreds of millions of dollars in ill-gotten profits for the fund. Cohen micromanaged the company’s operations, and, in the years he supervised, it became “a veritable magnet for market cheaters.” (Cohen declined to comment for this article.)
After the company pleaded guilty to the charges and the penalties were paid, Cohen became a symbol of Wall Street malfeasance. Since then, he has tried to rebuild his reputation by taking steps to show that he could run his new fund, Point72, while adhering strictly to securities rules. He has gradually returned to the public sphere, speaking in 2016 at an annual conference hosted by Michael Milken, a financier who pleaded guilty to securities fraud in 1990 and has since devoted his time to funding cancer research and other philanthropic endeavors. (He was pardoned in February by President Trump.) More recently, Point72 has been accused of gender discrimination and of creating a hostile work environment by several women; a senior portfolio manager who recently left the company and a woman who works in the investor-relations department both filed grievances with the Connecticut Commission on Human Rights and Opportunities during the last seven months. (Cohen and Point72 declined to comment on the grievances.) It has also emerged that the company settled with a third woman, Lauren Bonner, who filed a federal discrimination lawsuit against Point72 in 2018, on September 17th of this year, in the final days of the Mets negotiations. (The company has said that there were “no adverse findings” against Cohen or the firm.) If he is approved, Cohen would not only be one of the most controversial figures to ever own a major-league baseball team, he would be one of the only owners whose methods of amassing his fortune have come under such intense legal scrutiny.
“It just seems so messed up,” Jeanne Christensen, a partner at the Wigdor law firm who represents Bonner and one of the other women who filed a grievance against Point72, said, regarding the insider-trading allegations. “You have little kids all across the country and parents who spend all their extra money on little Johnny so he might possibly get a scholarship to college, to play baseball, so that maybe he can make it to a minor-league team. It’s, like, the dream. And you’re doing that only to answer to some guy like Cohen?”
Though almost every buyer in the past has been approved, the league does not want anyone joining its ranks who might create a major scandal. In 2011, for example, Jim Crane, the former owner of Eagle Global Logistics, was applying for the second time to buy the Houston Astros. Questions were raised about the fact that the Equal Employment Opportunity Commission had recently investigated his company for race and sex discrimination in 2000, when he still controlled it. (Eagle settled the charges for nine million dollars.) Two of Crane’s employees had also been charged, respectively, with fraud and bribery by the Justice Department. (The two employees pleaded guilty, though Crane was not accused of wrongdoing in either case.) Crane was still approved in the end.
So far, the leaders of Major League Baseball have expressed little concern about Cohen’s history. Robert Manfred, the commissioner, has indicated that he would like the purchase to move forward as swiftly and smoothly as possible. But that speed might have precluded a more thorough background check; Christensen noted that no one has reached out to her as part of the process. (The league did not reply to a request for comment on that point.) “Let’s say, hypothetically, I told them everything about the case, and they said, ‘So what, it doesn’t matter, he can still own this baseball team, they get sued all the time,’ ” Christensen told me. That would be dispiriting in its own way to her, she said, but “you’d think they’d at least ask.”
The Wilpons have had their own financial woes. In 2008, after Bernie Madoff’s Ponzi scheme was exposed, it was revealed that the Wilpon family had been investors in Madoff’s fund; a subsequent lawsuit settlement required that Wilpon and Katz pay a hundred and sixty million dollars in restitution to other Madoff investors who lost money. (The amount was eventually reduced to sixty-two million dollars.) Three years before the Madoff settlement, Wilpon and Katz agreed to repay thirteen million dollars in profits they made from an investment in another Ponzi scheme, run by Samuel Israel III. Both of these contributed to the sense that the family is inept when it comes to managing money, and that it might sell the team owing to financial distress. Sports columnists spent years complaining that Wilpon and his son Jeff, who is the team’s chief operating officer, weren’t willing or able to invest sufficiently in the team. Cohen, who is estimated to be worth as much as fourteen billion dollars, would be the richest team owner in the league. Columnists have celebrated the prospect of someone with nearly unlimited resources owning the Mets. One at the New York Post called Cohen “the most popular billionaire in New York City” and said that Mets fans appreciated Cohen’s “attitude” and determination to win.
Cohen’s bid for the Mets comes after a long campaign to own a major sports franchise. In 2012, as federal prosecutors were preparing to file a case against S.A.C. and Cohen was under intense scrutiny in the press, he purchased a four-per-cent stake in the Mets during an ultimately unsuccessful bid to buy the Los Angeles Dodgers. (In 2011, Cohen lost out on the chance to buy a larger minority interest in the Mets to a different hedge-fund billionaire, David Einhorn, a deal that later collapsed.) Then, in late 2019, Cohen entered talks to buy an eighty-per-cent stake in the team for $2.6 billion. That deal fell apart, too, and the press later reported that the Wilpons had demanded that Fred and Jeff remain in their management roles with the team for five years after Cohen acquired it, which sabotaged the transaction. (A person close to the Wilpons denied that this was why the two sides didn’t come to terms.) “I’m very disappointed we couldn’t work out a deal,” Cohen said in a statement at the time. “I gave it my best shot.” This time around, Cohen appears to have learned from his previous experiences, and was more deferential to the Wilpons.
The other, strongest, offer for the Mets came from the consortium led by Rodriguez and Lopez, which bid a similar amount to Cohen. They are devastated to have lost the team. Rodriguez has his own reputational challenges: in 2009, he admitted to using performance-enhancing drugs and retired from baseball in 2016 under a cloud. But the prospect of having Lopez involved in running the team had the potential to draw more women to the sport, and seemed likely to bring more Hollywood glamour to the franchise. Unlike Cohen, who could, if he chose, likely buy the Mets outright, Rodriguez and Lopez needed investors, and had recruited several, including Marc Lore, the president and C.E.O. of Walmart eCommerce; Mike Repole, the co-founder of Vitamin Water; and Vincent Viola, the owner of the Florida Panthers hockey team. One close observer of the deal said that the group made a tactical mistake by not making Lopez a more prominent member of the team and promoting her as the one who would be making the decisions, which would have made her the first major-league team owner who is a Latinx woman. It remains unclear why Cohen’s bid was chosen over theirs—the auction process is conducted confidentially—but one imagines that he applied his usual ruthless savvy in winning the contest. “The thing about Cohen is, he’s always just above the fray,” Christensen said. “He’s always three steps ahead. He really is. I give him that credit.”