Mets make wise move with Einhorn
I don't know David Einhorn, but I've done a little research and I can tell you he's one smart guy.
You have to be when you start a hedge fund, Greenlight Capital, with $900,000 and 15 years later you're handling $8 billion in investments.
Besides that, Einhorn seems to be a very good guy.
He has made a name for himself by exposing some of the faulty practices on Wall Street and this was at a time when few people seemed to be paying attention -- including those charged with the responsibility of oversight -- as the stock market went up but was being built on a shaky foundation.
The accounting practices of the investment firm Allied Capital made no sense to Einhorn, and he was brave enough to call attention to this despite facing heavy pressure from a variety of forces. He wrote a book on his experiences and gave the proceeds to charity.
He also was smart enough and brave enough to take on Lehman Brothers in that the debt of the company with ill-conceived mortgages made no sense to him.
You know how that turned out, as it was featured in HBO's "Too Big to Fail" last week.
These bold moves have helped to establish an impressive resume for Einhorn, 43, but it wasn't until last week that his name became known to most baseball fans.
That's because Einhorn decided to make the biggest personal investment of his life by buying a minority stake in the New York Mets, pending Major League Baseball approval, for $200 million.
As I heard the folks on CNBC debate the merits of the deal, it struck me that Einhorn has a pretty good track record when he puts money on the table.
The guy even does well when he plays for fun. In 2006, he entered the World Series of Poker on a lark and finished in 18th place, earning $600,000. The winnings were donated to the Michael J. Fox Foundation for Parkinson's Research.
As for the Mets, I don't believe they could have found a better partner if they had hired a search firm to locate someone to buy into their organization.
The ironic part of all of this is that the Mets' organization is in need of capital due to their financial crash on Wall Street, the playing field that Einhorn seems to have mastered.
The Mets' ownership invested heavily with Bernie Madoff, who would appear to be the very opposite of Einhorn in every way.
Madoff told his investors that all of his work was highly secret. Einhorn has campaigned for more revealing information, and one can find the investments of his company by simply visiting the Internet.
In any case, the Mets now find themselves with a partner who understands how good analytical decisions are made and one who has had a lifelong love affair with baseball.
In their new partnership, the Mets will maintain control of the club, but they would be wise to seek the counsel of Einhorn from time to time, even on baseball decisions.
And just what is Einhorn's philosophy when it comes to player personnel matters?
Einhorn isn't speaking on the subject or the deal itself because it has yet to be approved by MLB.
Even so, I can tell you Einhorn wouldn't be in favor of going out to sign the highest-price free agents. And just how do I know? Easy, you can find the answer in your research.
In his speech from the Tomorrows Children's Fund-Ira W. Sohn Investment Research Conference in May 2006, Einhorn started his remarks by stating: "I have played rotisserie or fantasy baseball for 22 years. Overall, I've won some and I've lost some. It wouldn't surprise any of you, that I am usually a value buyer of players. I go to the draft with a plan, usually to not put too much of my budget into just one player."
Just last week as the Mets were making the announcement of their new partnership, Einhorn spoke again at the Sohn conference and this time he ended his remarks with a reference to baseball with two words: "Go Mets."
The Mets have more than just needed capital and a cheerleader. They have one smart investor on their side who brings credibility to the table.
Fred Claire was a member of the Los Angeles Dodgers from 1969-98, serving the team as Executive Vice-President and general manager. He is the author of "Fred Claire: My 30 Years in Dodger Blue." This story was not subject to the approval of Major League Baseball or its clubs.