Sixth Street has acquired a 10% stake in the San Francisco Giants, marking the latest private equity move into Major League Baseball ownership.
The strategic investment will assist in paying for stadium upgrades and other facilities, including a neighboring real estate development, The New York Times reported.
“Sixth Street’s strategy within sports is yet to be defined, as we’ve seen them take various types of stakes—from outright ownership with the San Antonio Spurs to stadium stakes with Real Madrid FC and now the San Francisco Giants, as well as broadcasting rights with Barcelona FC,” said Nicolas Moura, a PitchBook senior EMEA private capital analyst.
“The common denominator seems to be minority stakes in large and well-established sports franchises with recurring revenues,” he added.
PE started acquiring stakes in sports franchises after major leagues loosened their ownership rules, with the MLB opening the floodgates in 2019. Currently, one-third of MLB teams are PE-backed, the highest among North American sports leagues, according to PitchBook’s PE Sports Dashboard.
The San Francisco Giants have proven to be a hot ticket for PE, with Arctos Partners previously acquiring a minority stake in the team.
“The San Francisco Giants are one of baseball’s richest teams in terms of history and success, which undoubtedly added to the appeal seen by Sixth Street,” said PitchBook PE analyst Kyle Walters.
“Rather than cashing out of a minority stake to attain some liquidity, as many owners have a majority of their net worth tied up in the teams they own, some more recent deals follow the same trend as the Giants deal, where sponsors are using the cash from the deal to make stadium improvements or renovate surrounding real estate.”
Forbes reported the team’s valuation to be $3.8 billion as of March 2024. The franchise has a 142-year history, notably moving to San Francisco from New York in 1958.
The Raine Group served as financial advisor and Pillsbury Winthrop Shaw Pittman served as legal adviser to the Giants. Sixth Street enlisted PJT Partners as financial advisor and Latham & Watkins as legal advisor.
Featured image by Norm Hall/Getty Images
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