The big business bet behind Juan Soto's massive Mets contract
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New York Mets owner Steve Cohen during Opening Day in 2023. Photo: Thomas A. Ferrara/Newsday via Getty Images
New York Mets owner and hedge-fund titan Steve Cohen just shocked the sports world, agreeing to pay outfielder Juan Soto $765 million to play baseball for him over the next 15 years.
Why it matters: The nearly 10-figure deal, the biggest contract in the history of pro sports, is huge for Juan Soto — but it might end up being a winner for Cohen too.
The big picture: Owning a professional sports team is a pretty awful way to make money.
- Cohen knows this first-hand. He's spent lavishly on player contracts in the four years since buying the Mets, pushing the business into the red in hopes of building a consistent winner. And it hasn't necessarily worked yet.
- But Juan Soto is not your typical player. At just 26 years old, he's one of the game's premier hitters, and arguably one of the most entertaining.
How it works: The average $51 million a year the Mets will pay Soto (potentially $55 million after five years), will likely be offset to a degree by the money he'll bring to the Mets, which pulled in just under $400 million in revenue in 2023, according to Forbes.
- That extra juice could come in the form of ticket sales, which were down 10% last year from 2023 (when the team reportedly generated $133 million at the gate) — and by the money those extra fans spent on parking ($15 million in 2023), as well as beer, hot dogs, lobster rolls and ballpark sushi ($17 million).
- If all that goes according to plan, the team will sell more advertising in the stadium ($49 million), too.
- "The Mets probably have more room to grow," a Major League Baseball executive told the New York Post, a reference to the indirect financial benefits Soto could bring compared to other teams.
Winning alone brings money too. A team could bring in an extra $50 million just from going to the World Series between the post-season ticket sales and nationally televised games, the Post notes.
- And if this happens, the franchise valuation will jump too.
The intrigue: Cohen is also trying to win support for an $8 billion casino project next to the Mets' Citi Field in Queens, New York, which could generate around $1.9 billion a year by some projections.
- If that planned "Metropolitan Park" were ever built, it likely wouldn't hurt business to have a thriving Mets franchise anchoring the northwest corner.
