Apollo Global Management to Acquire Significant Stake in New York Yankees
The private equity firm's investment will value the baseball franchise at over $12 billion, potentially making it the most valuable in the sport.
Private equity giant Apollo Global Management is nearing a deal to acquire a substantial 16% stake in the New York Yankees, a move that would position the storied baseball franchise as potentially the most valuable in professional sports. The transaction, which involves a $2.6 billion cash injection from Apollo, is expected to value the team at more than $12 billion.
This significant investment structure includes both debt and equity components, with Apollo becoming the second-largest equity owner after the Steinbrenner family. The Steinbrenner family will retain a controlling interest, holding slightly over 60% of the team, while relinquishing a "de minimis" portion of their stake, reportedly no more than 3%.
Al Tylis, who leads Apollo's sports investment division, is slated to join the 13-member board of Yankee Global Enterprises. The deal's impetus appears to stem from a desire among the team's limited partners to monetize their investments for estate planning purposes, coupled with Apollo's strategic aim to establish a major anchor investment for its newly formed sports fund.
The partnership is expected to provide the Yankees with considerable financial flexibility, enabling capital for player acquisitions, debt repayment, and a buffer against potential industry disruptions like a baseball strike. This influx of Wall Street capital reflects a broader trend in professional sports, where large financial firms are increasingly involved in team ownership.
Apollo, managed by financier Marc Rowan, recently launched Apollo Sports Capital with $6 billion allocated for deployment. The Yankees deal represents the fund's largest investment to date. Apollo's other sports holdings include a majority stake in Spanish football club Atletico Madrid and an investment in Pickleball Inc.
Negotiations for the Yankees were led by team chairman Hal Steinbrenner, son of the legendary former owner George Steinbrenner. The agreement has been reached in principle, though the complex nature of the transaction could lead to further refinements before its official closing, which could occur as early as this week.
MLB rules currently restrict private equity firms from owning more than 15% of a team, but the Yankees anticipate the league will grant a waiver for this transaction. Once finalized, the Yankees' valuation is projected to surpass that of the Los Angeles Dodgers, currently valued at $12 billion, solidifying its status as baseball's preeminent franchise in financial terms.
The deal involves Apollo paying cash upfront for an immediate 8% stake and acquiring an additional 8% through preferred stock convertible to equity in four years. The cash infusion will also refinance existing holding company debt at a lower cost. Apollo will own its stake through Yankees Global Management, which also holds interests in the YES Network, Legends Hospitality, and the AC Milan soccer team.