Private Equity in Major League Baseball

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Photo credit: https://www.istockphoto.com/photos/money-baseball

Here we are, yet again, with more private equity interest in sports. Major League Baseball has increased private equity ownership interest in its clubs in recent years as the economics of the sport have gotten out of control on both the supply and demand sides.[1] Increased demands from the players and further uncertainty from media rights deals have made major league clubs realize that they need a capital cushion to grow the game and compete.[2] Part of the reason that MLB clubs need this type of capital is because of the lack of a salary cap, essentially giving players the right to command a blank check for a salary.[3] To say inflation has caught up with MLB is almost an understatement.[4] When George Steinbrenner bought the New York Yankees in 1973, he paid just over $10 million. Today, they are worth over $8 billion.[5] There are only so many potential buyers for these expensive assets, so private equity can fill the funding gap and provide liquidity for owners.[6]

MLB has very liberal bylaws allowing owners to sell up to 15 percent interest to private equity and to sell up to 30% of the team to minority owners in general.[7] This is in comparison to the NFL, which only allows its owners to sell 10 percent to private equity investors.[8] MLB was a first mover in the private equity area, which gives them a distinct advantage when dealing with investors and can allow them to draw more capital.[9]

So, what’s next for private equity in MLB? One of the most recent transactions was the sale of a 10 percent interest in the San Francisco Giants, valuing the team at $4.2 billion.[10] These funds are tagged for upgrades at Oracle Park, the Giants’ home ballpark.[11] As consumers become more demanding and look for better experiences on gamedays, you are bound to see more and more of these types of deals to allow owners to invest the capital needed to keep the customers (fans) coming back for more and to take MLB to the next level of live entertainment, particularly in a time when we as a society are growing ever more distracted.

[1] https://www.cnbc.com/2025/04/11/mlb-could-see-private-equity-interest-as-uncertainties-lie-ahead.html

[2] Id.

[3] Id.

[4] https://www.sportico.com/feature/mlb-ownership-rules-private-equity-1234784526/

[5] Id.

[6] Id.

[7] See supra note 1.

[8] https://www.nfl.com/news/nfl-owners-vote-to-allow-private-equity-funds-to-buy-stakes-in-teams

[9] See supra note 1.

[10] https://www.espn.com/mlb/story/_/id/44304510/giants-sell-reported-10-stake-private-equity-firm-sixth-street

[11] Id.