Endeavor Group Holdings has entered into a definitive agreement to sell Diamond Baseball Holdings (DBH), owner of ten Minor League clubs affiliated with six Major League Baseball (MLB) clubs: the Chicago Cubs, New York Yankees, San Jose Giants, San Francisco Giants, Atlanta Braves and Los Angeles Dodgers. The buyer is one of Endeavor’s investors, Silver Lake, an investment firm with about $88 billion under management. The purchase price is reportedly $280 million, more or less what DBH paid for the ten clubs. The deal should close in the fourth quarter if regulators approve. Pat Battle and Peter Freund remain in place as Diamond’s respective executive chairman and CEO.
To judge by reports in Sports Business Journal and other outlets, the sale appears to have been prompted by allegations – first made in the fourth quarter of 2021 – from the Major League Baseball Players’ Association (MLBPA) that DBH was engaged in a conflict of interest. One of the holding group’s owners is William Morris Endeavor (WME), the entity into which the famous William Morris Agency was fused in 2014. WME’s payroll includes three MLBPA-certified players agents, Jon Rosen, Jim Murray and Michael Stival, and until recently included a fourth, Kent Matthes.
Endeavor has just reported income of $42.2 million on revenues of $1.313 billion for the second quarter. Adjusted Ebitda amounted to $306.4 million.
Revenues for representation – the segment reportedly at issue in the sale of Diamond – were $358.0 million, up year-on-year by 9 percent. This compares with $627.9 million (+19%) for events, experiences & rights and $331.9 million (+28%) for owned sports properties.
