For the second time this year, a hedge fund is stepping into the batter's box.
Last week, JPMorgan's Highbridge Capital agreed to loan the struggling Los Angeles Dodgers $150 million. The historic franchise needed the cash infusion to help it make payroll, a shocking comedown for a team best-known for breaking baseball's color barrier with the debut of Jackie Robinson in 1947.
The team filed for bankruptcy last month after Major League Baseball rejected a $3 billion broadcasting deal that would have enabled Fox Sports to broadcast its games for the next 17 years.
The conditions of the one-year loan allows for the Dodgers to have initial access to $60 million with future withdrawal of $90 million. The loan also comes with a 10% interest rate.
Highbridge, in turn, will get first claim on the Dodgers assets, as well as receive a $4.5 million deferred commitment fee plus 0.5% of the unused part of the loan, payable monthly, according to court papers.
The Dodgers came to an agreement with Highbridge since the team didn't have enough cash to make payroll on June 30. The team listed assets of approximately $1 billion and debt of as much as $500 million in its Chapter 11 petition.
Meanwhile the team that was created to fill the void in New York after the Dodgers defected to the west coast is closing in on a hedge fund-aided bailout of its own.
Hedge fund manager David Einhorn is reportedly close to finalizing a deal to buy a 33 percent stake in the New York Mets for $200 million. The deal is a last-ditch effort by Mets owner Fred Wilpon to hang onto the team as he faces a $1 billion lawsuit filed against him by victims of Bernie Madoff's Ponzi scheme.
If the Mets pay back Einhorn within a set period of time, he retains 16 percent of the team. If they don't pay him in time, he can exercise an option to gain 60 percent of the team. Forbes reports that the option would cost him only $1 on top of his original investment.