Transformation from Hedge Fund Manager to Baseball Team Owner Hasn't Gone as Planned for "Uncle Stevie"

There's a scene in the first season of "Billions" when Bobby Axelrod is just about to sign an agreement with the government, which would see him pay billions of dollars to settle some charges.

As Bobby's attorney is reading off the main points of the agreement, Axelrod and Mike "Wags" Wagner start joking about how quickly they expect to make the money back.

This incenses Charles "Chuck" Rhoades, Jr., US Attorney for the Southern District of New York.

Chuck interrupts the proceedings to change the deal - Bobby can no longer trade money for other people. Instead, he can only manage a "home office", which means that he can only trade his own money.

This infuriates Axelrod, who cancels the deal by ripping up the check and throwing the pieces into Chuck's face.

To be prevented from managing other people's money would be a major slap in the face.

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A number of the plot points in Billions come from the life of Steven Cohen, famed manager of the SAC Capital Advisors hedge fund.

SAC Capital did very, very well over its history, netting Cohen billions of dollars.

The US government alleged that SAC Capital did TOO well, as they ended up going after the hedge fund on insider trading, wire fraud and securities fraud charges.

In the end, SAC Capital paid $1.8 billion in fines, and the fund agreed to plead guilty to wire fraud and securities fraud.

As part of the settlement, Cohen was forbidden from managing other people's money for two years, and SAC Capital had to shut its doors to outside investors.

Cohen's reputation was in tatters. Forget the fine - the fact that Cohen was temporarily restricted from managing other people's money was the biggest slap in the face of them all, similar to the fictional situation involving Bobby Axelrod.

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Cohen, who was still very, very rich, wanted to re-invent himself and rehabilitate his image.

What better way than to take a sad sack franchise and restore it to its former glory?

Cohen, who had purchased a minority stake in the New York Mets in 2012, now wanted to buy a controlling stake in the franchise. Cohen successfully negotiated the purchase, and became the majority owner of the Mets in the fall of 2020.

The Mets were in a sorry state, battered by years and years of mismanagement.

What better way for Steven Cohen to transform himself into "Uncle Stevie", as some people had liked to call him, than to take the Mets and transform them into a legitimate powerhouse in Major League Baseball? The fans in New York would love him for it, and maybe people would forget about the fact that his image had been permanently tarnished in the hedge fund world.

Cohen had a great asset at his disposal - money. Maybe the Mets could simply spend their way to a title?

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Cohen got started and signaled to Mets' executives that money would be no object.

The team got started immediately, signing players like Marcus Stroman to deals.

The 2021 offseason is when Cohen and the team really started spending, as they inked players like Max Scherzer, Starling Marte and Mark Canha to deals.

In 2021, the payroll for the Mets was about $163 million - by 2022, this had jumped to $264 million, giving the Mets one of the highest payrolls in the league.

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In 2021, Cohen's first full year as the owner of the team, the Mets went 77-85, finishing 11.5 games out of first place in the National League East.

That offseason, the Mets were very aggressive, and this resulted in one of baseball's most improved teams, as the Mets finished with a record of 101-61. While the team had a disappointing exit from the playoffs, things were clearly on the rise in New York.

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In the 2022 offseason, the Mets were aggressive yet again, signing playing like Brandon Nimmo, Edwin Diaz and Justin Verlander to massive deals.

Heading into the 2023 season, expectations for the Mets were sky-high - after all, they had a roster of starting pitchers that included the likes of Justin Verlander and Max Scherzer - surely they had to be great. The team had a ridiculous payroll of $353.5 million, almost $80 million more than their next closest competitor, the New York Yankees.

Expectations were through the roof, and why not?

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The 2023 New York Mets were a complete disaster, finishing the season with a record of 75-87.

Things were so bad that the team started dealing pieces like Verlander and Scherzer before the season came to an end, in a startling admission that the first iteration of Cohen's Mets had been a failure.

The Mets likely plan on having a much lower payroll heading into 2024, as they seem content to build their own prospects now, rather than relying on expensive free agent deals.

In short - the Mets probably won't be contending for a while, given the current make-up of their team.

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This entire situation has likely resulted in a great deal of frustration for Cohen, who was looking to rebrand himself as the owner of a World Series winning team.

Nothing like getting people to forget about expensive litigation settlements than to hoist the World Series trophy during a parade down the streets of New York!

Unfortunately, this hasn't happened for Cohen, and he has been met with more frustration, as he has found that his very deep pockets can't buy a title.

Cohen has quickly realized that running a professional sports team comes with an entirely different set of challenges than running a hedge fund, and that the rope that the team's fans give you won't be very long before they start turning on you and wanting you run out of town.


Filed under: General Knowledge