UFC Owner Endeavor to Buy Nine Minor League Baseball Teams
(Bloomberg) -- The owner of Ultimate Fighting Championship and Professional Bull Riders is buying nine minor league baseball teams.
Endeavor Group Holdings Inc. said Wednesday it plans to acquire teams affiliated with some of the most popular franchises in Major League Baseball, including the Iowa Cubs, an affiliate of the Chicago Cubs, and the Scranton/Wilkes Barre RailRiders, which are part of the New York Yankees organization. Terms weren’t disclosed.
Endeavor is betting its expertise with sports properties like the UFC and PBR can turn minor league baseball into a major-league business. The company has created Diamond Baseball Holdings, which will oversee ticket sales, sponsorships, naming rights, food and beverage operations, and media rights for the acquired teams.
“We’ve got a great deal of personal and professional experience in building out opportunities like this,” Endeavor President Mark Shapiro said in an interview.
Pat Battle and Peter B. Freund, two sports industry veterans, will run Diamond Baseball Holdings, Endeavor said. Freund is a minority owner of the New York Yankees and the primary owner of the Memphis Redbirds, one of the teams Endeavor is acquiring.
Major League Baseball restructured its minor-league system early this year, cutting the number of teams by 25%. The players are employees of MLB franchises, but the business operation is separate. Some of the teams being bought are owned by big league clubs, while others are held by third parties, like the Goldklang Group and Racoon Baseball Inc.
Baseball players start their careers in the minors, working their way up to the majors over several years. Most never make it out of the minors, where salaries pale in comparison to the millions of dollars that big league pros earn.
Minor League teams lost money in 2020 when their season was canceled due to the pandemic. Unlike sports with large national TV deals, they didn’t have media rights to fund games with empty stands.
Shapiro believes his new organization can change that. Endeavor has already taken advantage of soaring demand for live sports across the media industry to increase UFC’s business through TV deals and sponsorships. The company says it scored a significant increase in rights fees for PBR under a 10-year deal inked with CBS in 2018.
Diamond Baseball Holdings will sell advertising for all of the acquired teams, and negotiate media deals with streaming services to show minor league games, Endeavor said. The company also plans to modernize services in stadiums, updating concessions so fans can order food from their seats. It will also book concerts at the venues.
“We’ll experiment, have fun and try to create a family-friendly experience,” Shapiro said. Like Freund, Shapiro has firsthand experience with the minor leagues. He is a co-owner of the Oklahoma City Dodgers, the Triple-A affiliate of the Los Angeles Dodgers.
“My lifelong dream is to own Chicago Cubs,” Shapiro said. “Sometimes dreams come up just a tad bit short.”
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