Apollo Places $2.6 Billion Bet on New York Yankees

Ruth and Jeter built the house. Wall Street is financing the latest renovations.

The holding company of Major League Baseball’s New York Yankees revealed a $2.6 billion financing agreement with private equity giant Apollo Global on Tuesday, showcasing the intersecting interests between an established sports family and new financial entrants to the pro leagues.

PE for Pinstripes

The Steinbrenner family has held controlling ownership of the Yankees since patriarch George, who died in 2010, led a group that bought the team for $10 million in 1973. Today, it’s worth $8.5 billion, according to Forbes. 

The Steinbrenners, now led by scion Hal, are certainly not hurting for cash but aren’t nearly as liquid outside of their sports business as many mega-rich businessmen who entered pro sports ownership in recent years. Estimates put the family’s worth in the range of $5 billion. Compare that to Los Angeles Clippers owner Steve Ballmer and Denver Broncos owner Rob Walton, both worth well over $100 billion, thanks to their respective Microsoft and Walmart fortunes. It’s not hard to see why added Wall Street firepower on the Yankees bench has appeal.

At the same time, Apollo Sports Capital’s interest couldn’t be more straightforward. In a white paper last year, it made the case that sports investing represents a $2.5 trillion opportunity. The firm’s sports unit is not averse to controlling stakes, having taken one in Spanish soccer giant Atlético Madrid earlier this year, but when it comes to the MLB, Apollo must navigate a rule barring private equity funds from owning more than 15% of a team. Tuesday’s agreement is a mix of credit and equity, with Apollo’s exact stake in the Yankees undisclosed:

• The Steinbrenner family will retain “full control” of the Bronx Bombers, but it’s unclear if any funds will go toward the Yankees’ payroll, the MLB’s third-highest. The team hasn’t won a World Series since 2009.
• The announcement said the money will support “continued growth of the Yankees franchise as well as refinancing of existing debt.” Yankee Global Enterprises has stakes in Major League Soccer’s New York City FC, Italian soccer team AC Milan, the YES Network and Legends Hospitality.

Financial Might Doesn’t Always Make Right: The richest MLB owner is hedge fund manager Steve Cohen, the $23 billion man who bought the Yankees’ crosstown rival New York Mets for $2.4 billion in 2020. But, despite spending $369 million on player salaries this year, the second-highest in the league behind the Los Angeles Dodgers, and reportedly running up an annual operating loss of $200 million, the Mets are dead last in the NL East division.