Four minor-league affiliates of the Braves, including the Triple-A Gwinnett Stripers, are being sold for the second time in less than a year.
Other Braves affiliates changing owners – again – are the Double-A Mississippi Braves, the High-A Rome Braves and the Low-A Augusta GreenJackets.
Endeavor Group Holdings, which bought the Braves’ affiliates and six other minor-league clubs across the country in December and January, said in a regulatory filing late Tuesday that it has reached a definitive agreement to sell the 10 teams, collectively known as Diamond Baseball Holdings (DBH), to private-equity firm Silver Lake for an aggregate price of approximately $280 million.
The quick flip resulted from the Major League Baseball Players Association objecting to potential conflicts of interest in Endeavor owning teams while also representing pro baseball players via its WME Sports agency.
“Ultimately our relationship with MLB and the MLBPA took priority given the importance of our overall agency business and our continued investment in our baseball representation practice within WME Sports,” Endeavor President Mark Shapiro said in a statement. “Silver Lake will be an excellent partner to these clubs going forward given their deep understanding of the business and their incredible track record of investment in sports IP (intellectual property).”
Essentially, Endeavor chose to sell DBH rather than risk being forced out of the player representation business by having its agents lose their MLBPA certification.
The Braves had owned most of their minor-league affiliates for decades before agreeing to sell the Gwinnett, Mississippi and Rome teams to Endeavor in December. At the same time, Endeavor purchased the Augusta team from a different owner. But all four teams remain player-development affiliates of the Braves, essentially meaning that the ownership change has affected only the business side – not the on-field side – of the operations this season.
Endeavor’s sale of the teams to Silver Lake is expected to close in the fourth quarter of this year “subject to applicable regulatory consents and approvals and the satisfaction of certain customary closing conditions,” Endeavor said.
Diamond Baseball Holdings’ top two executives under Endeavor’s ownership, Executive Chairman Pat Battle and CEO Peter Freund, will continue to lead the business under Silver Lake’s ownership.
The aggregate sale price, $280 million, is roughly equivalent to what Endeavor paid for the 10 teams, Shapiro told Sports Business Journal.
The other teams, in addition to the Braves affiliates, being sold to Silver Lake as part of DBH are the Iowa Cubs (Triple-A affiliate of the Chicago Cubs), Memphis Redbirds (Triple-A affiliate of the St. Louis Cardinals), Oklahoma City Dodgers (Triple-A affiliate of the Los Angeles Dodgers), Scranton/Wilkes-Barre RailRiders (Triple-A affiliate of the New York Yankees), Hudson Valley Renegades (High-A affiliate of the Yankees) and San Jose Giants (Low-A affiliate of the San Francisco Giants).
California-based Silver Lake is a global technology investment firm with more than $88 billion in combined assets under management. Endeavor, also California-based, is a global company that includes entertainment agency WME, sports-and-media business IMG and mixed-martial-arts organization UFC.
Silver Lake is a major investor in Endeavor, a publicly traded company.
“We look forward to working closely with Silver Lake and continuing the momentum in championing Minor League Baseball,” Battle and Freund said in a joint statement. “Coming off several months of invaluable support and guidance from Endeavor in establishing this organization, and now moving into Silver Lake’s proven portfolio, the entire DBH organization is enthusiastically focused on this next phase of aggressively growing the business.”
Silver Lake Managing Director Stephen Evans said: “We are excited to partner with Pat, Peter and their team to help advance DBH’s mission.”
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