MLB ups private equity ownership limit to 20% per franchise

Major League Baseball (MLB) has revised its ownership framework to allow private equity firms to hold stakes of up to 20% in individual franchises, according to a report by Front Office Sports.

The change, introduced over the summer, brings MLB’s private equity ownership ceiling in line with the NBA, NHL and MLS, all of which permit firms to own as much as 20% of a team. The NFL has a lower limit of 10%, having opened its franchises to private equity investment last year.

Under MLB’s revised rules, however, a private equity investor cannot hold a larger stake than the franchise’s controlling owner. MLB requires a controlling owner to hold at least 15% of a team, meaning the maximum PE stake would be 15% where the controlling owner holds only the minimum permitted interest.

MLB has reportedly not publicly announced the rule changes.

Private equity has already established a presence across a growing number of MLB franchises. Research from PitchBook cited in the report indicates that 10 teams have private equity affiliations, including the Arizona Diamondbacks, Baltimore Orioles, Cleveland Guardians, Milwaukee Brewers, Seattle Mariners, St Louis Cardinals and Athletics.

The San Francisco Giants, New York Yankees, Chicago Cubs, and Los Angeles Dodgers are among a further group of eight teams reported to have connections with private equity.