MLB Owners Raise Private Equity Cap to 20%

MLB owners voted this summer to raise the maximum private-equity stake in a club from 15% to 20%, a change made without public announcement. Forbes contributor Maury Brown reported that owners acted "without fanfare" and brought the limit "closer to what is in the NBA." Under the revised rule, private equity cannot own more than the controlling owner, who must hold at least 15%; a controlling owner with 19% would limit PE to 19%. NBA, NHL and MLS already set PE caps at 20%. The NFL caps PE at 10%, has approved only four firms, and has PE investors in seven teams. MLB has no cap on how many teams one PE firm may invest in, unlike the NBA's eight-team limit. About 10 MLB teams have direct PE investment and nearly 20 have broader ties. Apollo Sports Capital's $2.6 billion Yankees deal closed last month; Apollo's Sam Porter said the club sought growth capital, debt refinancing, and "an overall holistic capital solution to give them various levers to pull financially to help grow the club." Brown called it among the first cases of increased PE ownership of an MLB club.