Big changes could come to the minors as Endeavor, Silver Lake prepare to purchase numerous affiliates

Friday, December 3, 2021

-Clint Manry

In a detailed and interesting write-up by Baseball America’s J.J. Cooper on Friday, it has become known that Endeavor — a global sports and marketing company — is expected to announce the purchase of six or more minor league baseball teams.

The announcement could come as soon as next week, and it’s expected that, soon afterward, another six or more will be bought as well. According to Cooper, despite MLB having full power to approve or disapprove sales, Endeavor’s massive purchase is NOT expected to be an issue. In other words, this is very likely happening.

Endeavor Group Holdings is a publicly traded company that stretches across sports, entertainment and marketing. Silver Lake Partners (a private equity group) owns a significant portion of Endeaver, which includes a 50.1% stake in the UFC, a recent acquisition of Open Bet, as well as other entities including Professional Bull Riding (PBR) and Euroleague Basketball. In the third-quarter of 2021, Endeavor’s projections show roughly $5 billion in revenue, and according to BA’s report today, the purchase of numerous minor league teams will cost the company a “few hundred million dollars.” Silver Lake reportedly manages over $88 billion in assets, according to its website. 

Also, as a separate deal, Endeaver is expected to soon take over all marketing of the minor leagues for MLB.

This is huge news and could drastically impact minor league baseball and how we view it currently. The days of individual ownership groups running minor league affiliates could soon be over as under the present PDL (Professing Development License), there’s no limit on how many teams a single entity can own — only that no more nine teams in any one classification and no more than 24 teams total before the end of the 2022 season. For example, Mandalay Properties (a real estate agency) at one point owned five clubs. 

The general expectation is that, when all is said and done, Endeavor could own 30-40 of the 120 affiliated minor league teams, though obviously the process would take some time.

The good news is that minor league baseball, surprising to some, is still a profitable business. According to today’s BA article, franchise values are showing “solid resiliency”, even after the pandemic and MLB takeover. And given how well-funded a company like Endeaver is, such a massive amount of purchases should only help improve the industry. 

Details as to exactly which teams Endeaver plans to buy are not known yet, but the expectation is that most of them will be seen as cornerstone franchises that are affiliated with the biggest franchises in MLB, coming from both individually owned teams and clubs currently run by MLB. 

From what I’ve read, this is looked at as a positive development and one that, long-term, could dramatically help minor league baseball. With its ties to MLB already established, and the scale at which it’s able to operate, Endeavor could become an equal partner and finally make minor league baseball what so many of us feel it should already be. 

More details to come…