Major League Baseball is facing a turbulent moment right now. Local media rights are unsettled, labor issues are expected to cause a lockout in 2027, and the lack of a salary cap creates payroll disparities. But for private equity, all this volatility is building a perfect storm through which to swoop in.

MLB was one of the first of the major U.S. professional sports leagues to allow PE firms to invest. In 2019, baseball began allowing PE funds to buy up to 15% of a team, with no limit on the number of clubs a fund can invest in. It’s not clear if MLB imposes a minimum dollar amount that funds must spend. And no franchise can sell more than 30% of its equity to PE.

As one of the first to open its doors to PE, MLB has attracted more PE funds than many other sports leagues. (The NBA has more PE investments, but that includes firms like Arctos Partners that have multiple holdings.)

A handful of private equity firms have taken stakes in MLB teams. This includes Arctos, Sportsology Capital Partners and Sixth Street. RedBird Capital, the PE firm from Gerry Cardinale, backs Fenway Sports Group, which owns the Red Sox. Silver Lake owns Diamond Baseball Holdings, which has amassed a collection of 48 minor league teams. (Marc Lasry’s Avenue Capital is an investor in the Baltimore Orioles, but Avenue is a hedge fund and not private equity.)

Ares Management is an investor in Chelsea FC, Inter Miami CF and the Miami Dolphins but doesn’t own an MLB team. Ares did act as a lender to the San Diego Padres in 2021.

Buying a professional sports team is a complicated, capital-intensive and regulated process that can take lots of time. Sportsology spent one-and-a-half years in negotiations before completing their minority stake in the Texas Rangers in February.

Investing in sports teams is still relatively new, said Aaron Mulvihill, global alternatives strategist at J.P. Morgan Asset Management. “Sports investing is quite unique and interesting because it’s emotional and there’s a lot of fan loyalty,” he said. “It’s quite specialized. It’s a little more difficult to predict on an Excel model how a sports franchise will do.”

Private equity has recently hit some trouble. Some funds with exposure to the so-called SaaS-pocalypse are facing withdrawals as well as sharp stock declines. Particularly hard-hit is Blue Owl, which last month reportedly restricted investor withdrawals from one of its retail-focused funds. Blue Owl is the parent of the HomeCourt Partners fund which buys minority stakes in NBA franchises. Shares of Blue Owl are down 57% from their 52-week closing high of $21.65 that it reached in March 2025.

Still, there are many reasons to invest in professional sports teams, one being the scarcity of teams, with many leagues capped at around 30 clubs.

Soaring team valuations provide another reason to invest in sports. In 2001, Forbes valued the Dallas Cowboys at $743 million, a figure that rocketed to $13 billion in August’s Sportico valuations, making Dallas the world’s most valuable sports team.

While baseball lags the NFL, in part because MLB takes in far less money in national TV rights deals, its franchise values are growing, too, with the average team up 12% this year alone.

The New York Yankees again topped Sportico’s new list of most valuable MLB franchises at $9.4 billion, followed by the Los Angeles Dodgers at $9.05 billion and the Boston Red Sox placing at $6.65 billion.

How to Value

When it comes to valuing a club, many professional sports teams operate with negative cash flows, so traditional valuations metrics like EBITDA are useless, according to the Corporate Finance Institute. This is why MLB teams are often valued as a multiple of revenue. Using a revenue multiple allows clubs to capture revenue from local media and the intrinsic value of each team.

Valuing teams with an EBITDA multiple also doesn’t allow teams to include their scarcity value. “Sports team ownership, for an individual, in many ways is more analogous to the ownership of a valuable piece of art than it is to cold economic rationality,” said Stephen Amdur, a partner with law firm Fried Frank, who has advised on sports transactions such as the sale of Chelsea FC and the San Francisco Giants’ partnership with Sixth Street. “I don’t know how a person ultimately decides exactly what a Picasso should be worth, just as I don’t know how a person decides exactly what the Chicago Bears should be worth. It all depends on the team, the situation and your own personal enjoyment of the sport.”

The average MLB team is worth $3.17 billion, according to Sportico data. This translates to an average multiple of about 7.2x revenue. This low valuation is mainly due to the league’s looming labor issues. The current collective bargaining agreement between MLB and the MLB Players Association is set to expire on Dec. 1, and many expect a work stoppage.

A major point of contention is the salary cap. The NFL, the NHL and the NBA each have salary caps, but MLB doesn’t, which has led to spending disparity and competitive imbalances. While MLB officials have discussed adding a salary cap and a salary floor, the players union has long been against pay limits.
“Leagues that have salary caps like NFL have more predicable costs, which is helpful for investors in long-term planning,” Mulvihill said.

There are also media rights issues. In November, the MLB signed off on a package of new, short-term media rights deals with NBC Universal, ESPN and Netflix. Local media rights for the league remain unsettled.

When asked for comment, an MLB spokesman referred to Baseball Commissioner Robert Manfred’s recent remarks. “We haven’t even started the process. Candid conversations around (seeing) things that need to be addressed doesn’t necessarily mean you’re going to make this proposal or that proposal. I think we have to wait and see how things unfold at the table,” Manfred said during a WFAN radio interview in January.

Broken player economics, including the lack of a salary cap, is suppressing MLB multiples, according to one private equity executive, who declined to speak on the record.

A second PE exec, who also asked not to be named, thinks there will be a delay to the 2027 season with games likely starting in June.

Some bankers and PE executives believe all this volatility makes MLB a great place for private equity to invest right now. They say there are some longtime owners with majority stakes who are economically exposed to baseball’s volatility and would welcome taking money off the table.

Once MLB fixes its problems, including clinching a new CBA, team valuations are expected to jump. Until then, there is good value in the MLB, including for the San Diego Padres, which went on the market in November.

Conviction has helped private equity during broader economic troubles. Many PE funds that invested during the 2008 financial crisis did well. For example, Blackstone acquired Hilton Hotels in 2007 in a deal valued at $26 billion, right before the onset of the global financial crisis. When Hilton faced distress, Blackstone had to restructure the hotel’s debt in 2010. But by 2013, Blackstone took Hilton public and made a $14 billion profit, still considered one of the best PE returns in the industry.

“It is always incredibly hard to time investments whether it’s buying stocks or buying sports teams,” Mulvihill said. “It’s really about being comfortable with that investment in the long term.”