The New York Yankees are on the brink of a significant deal that would give private equity firm Apollo Global Management a substantial 16% ownership in the team. The Steinbrenner family will be reducing their controlling stake a bit, but they will still maintain more than 60% ownership, marking a new chapter in the franchise’s history with a financially robust partner, as per sources.
This partnership positions Apollo as the biggest equity holder after the Steinbrenners. The total cash infusion from Apollo is set at $2.6 billion, which comprises both debt and equity investments, raising the team’s estimated value to over $12 billion.
Once finalized—potentially by the end of this week—this agreement would elevate the Yankees to one of the most valuable sports franchises globally. Projections suggest they could surpass the Los Angeles Dodgers as the top baseball team by valuation.
While the parties involved have reached a preliminary agreement, the complexity of the transaction might cause some delays. Details about the ownership structure are still under wraps, but anticipation has been building since Apollo’s investment announcement last month.
This deal highlights the crucial role Apollo may play in the Yankees’ future, from investing in player acquisitions to alleviating existing debts and providing a financial safety net in the event of disruptions, like a potential strike. The trend of wealthy investors entering professional sports continues, as teams often see ownership dominated by affluent individuals or firms, especially from Wall Street. Al Tylis, head of Apollo’s sports fund, is expected to become a part of the Yankees Global Enterprises’ board of directors.
The Steinbrenner family will hold onto their majority interest, letting go of what a source indicated is a minimal portion—likely under 3%—of their controlling share. This decision follows a summer of negotiations, as certain limited partners sought to liquidate their stakes for estate planning amid evolving ownership dynamics in the baseball landscape.
Looking at the competition, hedge fund billionaire Steve Cohen, owner of the New York Mets, boasts an impressive net worth of about $26 billion. With his financial backing, the Mets’ payroll has soared to approximately $380 million, only trailing the Dodgers. The Dodgers’ ownership is linked to Guggenheim Investment Group, led by financial executive Mark Walter, who has recently faced fiscal strains, prompting him to sell his Lakers stake for $12.5 billion.
The motivations behind the Yankees’ arrangement with Apollo seem fairly straightforward—a coalition of limited partners aimed to withdraw from their investments, while Apollo is eager to secure a flagship investment for its sports-oriented fund.
Led by financier Marc Rowan, Apollo implied itself as a suitable partner. The firm’s new sports-focused investment fund has seen $13 billion deployed but was lacking a flagship investment until now. Hal Steinbrenner, the youngest son of the late George Steinbrenner, helmed the negotiations with Rowan and Tylis.
The valuation associated with Apollo’s stake suggests the Yankees are worth around $12 billion, although some believe this may undervalue the franchise due to minority ownership implications.
“This is no longer your father’s baseball,” noted a source from Major League Baseball. “The deal positions the Yankees favorably.”
While the Yankees spokesperson had no immediate comment, there has been no official response from Apollo representatives either.
As of August 11, Apollo finalized its part of the deal. The ongoing sale of the limited partners’ stakes is currently approaching completion. The arrangement allows Apollo to quickly acquire an 8% stake in the team with an additional 8% available later as preferred stock convertible into equity. Part of the funding will also aid in refinancing debt at a lower cost.
Apollo’s stake is held through Yankees Global Management, which controls the team along with the YES Network, Legends Hospitality, and the AC Milan soccer club.
It’s noteworthy that major league regulations currently restrict private equity firms to a maximum of 15% ownership in any sports team, although the league is anticipated to relax this restriction, according to MLB insiders.
This transaction ranks among the largest private equity-related deals in sports, paving the way for the Yankees to leverage Apollo’s emerging sports investment endeavors. The firm’s other investments include controlling stakes in Atletico Madrid and participation in the professional pickleball sector.
