The Giants sold a 10% ownership stake in the franchise to the private equity firm Sixth Street this week, as first reported by Ken Belson and Lauren Hirsch of The New York Times. The team did not confirm the specific share that it sold but announced what it called a “strategic partnership” with the firm on Tuesday.
Financial terms remain unreported. Team president/CEO Larry Baer said in a statement that the deal “allows (the Giants) to further strengthen our franchise on the field and in the community.” The New York Times writes that the Giants intend to use the money for improvements to Oracle Park and the Mission Rock mixed-use development surrounding the stadium, as well as the team’s Spring Training complex in Scottsdale.
Baer downplayed the possibility that the sale would have an impact on the team’s player payroll. “This is not about a stockpile for the next Aaron Judge (a former free agent target),” Baer told The New York Times. “This is about improvements to the ballpark, making big bets on San Francisco and the community around us, and having the firepower to take us into the next generation.“
So they just pulled in $400M? OK
….and it begins. Prepare for a gradually 10% worse product with an abrupt 10% price hike.
The Giants are using the money to make capital improvements of Oracle Park, its players facilities, and its surrounding 12 acre area. The private equity firm wants an ROI so why would they be interested investing in a diminished baseball product?
Umm, the ROI is in the steadily increasing value of franchises, aka the valuation of the 10% stake they just purchased.
I would never shill for free.
you can do that.
but I would never do something like that.
This move could set a precedent for a shadow funding cycle. If Sixth Street’s investment yields returns (e.g., via Mission Rock real estate revenue), the Giants could later repurchase the stake or sell another sliver, recycling capital indefinitely while keeping CBT payroll flat on paper.
This is a legal end-run around baseball’s spending guardrails—quietly banking $300-400M in future roster flexibility under the guise of “community bets,” unnoticed by a public fixated on he next “Aaron Judge” signing or stadium facelifts.
So they couldn’t raise funds themselves? Had to sell a stake off? Interesting, business is business I guess
Private Equity investment always is about cutbacks….not expansion. This will surely have a negative effect with on field payroll at some point.
Which considering what a bumbling mess the on field product is in San Francisco, this is just bad news and clearly does not bode well for Giants fans.
The San Francisco Giants have become a real estate investment corp with a baseball problem.
An auditorium that has baseball games sometimes
Err, PE investment is about cutbacks when that is the only clear path towards a return on investment. That isn’t the case with ownership stake in a major pro sports team, as those have been reliably improving in value for some time now.
Teams will be selling a percentage of themselves to sports betting firms before you know it.
Another weird aspect of these stakes going to private equity is that they are not limited to investing in just one team. They can invest in multiple teams. What will be the repercussions of a handful of these each possibly owning 10-15-20% of all of MLB?