The most recent example came from New York, where Yankee Global Enterprises, which owns the New York Yankees, entered into a $2.6 billion financing agreement with Apollo Sports Capital, the sports arm of Apollo Global Management.
The number is huge, but the details of the deal remain limited. The agreement combines credit and the purchase of an ownership stake, without announcing the percentage obtained by “Apollo” or distributing the amount between loans and shares. As announced, the Steinbrenner family will retain full control of the Yankees, and that Hal Steinbrenner will remain in charge of the team.
Money for a seat in management
Major League Baseball rules impose a 15% cap on what a single investment fund can own in any team. But a small stake does not necessarily mean limited influence, especially since Apollo Sports Capital CEO Al Tillis will join the board of directors of the Yankees’ ownership group.
The new financing will be used to refinance or pay off a large portion of existing debt, in addition to seeking additional investments and projects. Here the importance of the deal becomes clear to the fund, as it does not only enter a baseball team, but also into a group that owns the “YES” sports network, and owns interests in the New York City Football Club, AC Milan, and the sports hospitality sector.
Thus, the investment becomes distributed across more than one source of income: match tickets, broadcasting rights, advertising, hospitality, real estate, and the value of shares in clubs. As for the team itself, it becomes a gateway to a broader sports and commercial system.
From New York to Madrid
The “Apollo” grid doesn’t start with the Yankees. Last March, its sports arm completed the acquisition of the majority stake in Atletico Madrid, in a deal that valued the Spanish club at approximately 2.5 billion euros.
According to financial reports, Apollo acquired about 55% of Atletico, before the Board of Directors agreed to pump up to an additional 100 million euros to finance the team, infrastructure projects, and the “Sports City” surrounding the club’s stadium.
However, CEO Miguel Ángel Gil Marin and President Enrique Cerezo remained in their positions and remained shareholders in the club. This is a model that is repeated in fund investments, as it is summarized in the form of the entry of funds and the change in the position of power within the ownership, but the management known to the public remains at the forefront to provide continuity.
Apollo confirms that Atletico Madrid represents its main sports investment, and that it is not working to build a network to control several clubs. But its simultaneous presence within Atletico and the Yankees, and the recent investment’s connection to interests in Milan and New York City, reveal the extent of the intertwining that has become characteristic of sports ownership.
Why did clubs become a target?
Apollo Global Management manages nearly $1 trillion in assets, so you don’t look at a club in the same way as a fan. For the Fund, the team is a limited asset, with a fixed audience, long-term broadcast and sponsorship contracts, and a value that can rise.
The investor does not need to win the championship every season to achieve profits. Increasing the value of the team, expanding the stadium, increasing commercial revenues, and later selling the stake for a higher price may all be more important than direct results on the field. But this model raises questions that the new deal did not reveal the answers to: What is the actual value of the share that “Apollo” acquired? What is the size of the debt within the amount? What rights does her seat on the board of directors give her? Will the profits be used to develop the team or to repay loans and generate a return for investors?
There are no reported indications that the Steinbrenner family has lost control of the Yankees, nor is there evidence that sports decision-making has passed to the Fund. However, a $2.6 billion deal, with an undisclosed stake and a seat on the board, confirms that ownership of the sport is no longer measured solely in the name of the club owner. Today, funds can enter without full ownership, influence without appearing at the forefront, and transform the club from a team searching for titles into an asset within a global financial portfolio.
