As team valuations continue to rise (MLB average is now $1.78 billion, +8% YoY), pro sports leagues have become concerned about the dearth of individuals wealthy enough to buy-in. So, to grow the potential investor pool, Major League Baseball decided it would amend its rules to allow investment funds to buy limited stakes in multiple franchises. Bloomberg has reported that sports banker Sal Galagioto has created a $500 million investment vehicle explicitly for that purpose.
But, Galatioto isn't the only one in the market looking for investment capital. Multiple sources tell JohnWallStreet that a pair of former MSG executives - Doc O'Connor and Jordan Solomon - are working to raise an "$800 or $900 million private equity fund to take limited partner shares" in premium global sports assets.
It's unclear just how the duo plans to do that. Unlike Galatioto, neither has experience in valuing pro sports teams or negotiating their sales. One source who heard their pitch said, "they could not articulate how they were going to get out." Of course, it must be noted that as it currently stands none of the other big four sports leagues even permit cross-team ownership.
Former Diamondbacks shareholder Jeff Moorad is also said to be working on raising capital to invest in sports teams across multiple leagues - except he's looking to acquire controlling interests in those clubs. Presumably Moorad is thinking about buying up international clubs and/or minor league teams because the structure runs afoul of majority ownership guidelines of all four major sports leagues.