Endeavor sells Iowa Cubs to Silver Lake Partners under pressure from MLB
Under pressure from Major League Baseball officials, ownership of the Iowa Cubs changed for the second time in eight months.
Endeavor Group Holdings, a California-based sports, entertainment and marketing conglomerate, announced Tuesday afternoon that the company has sold the Cubs and nine other minor league baseball teams to an investor, Silver Lake Partners.
The sale comes after the Major League Baseball Players Association warned the union would revoke the certification of Endeavor’s talent agency group William Morris Endeavor if the company continues to own clubs, the Athletic reported in January.
The acquisition of the Iowa Cubs and nine other teams had created a scenario in which a single company employed sports agents and owned clubs responsible for developing players for Major League Baseball.
Talent represented by William Morris Endeavor has included Minnesota Twins shortstop Carlos Correa and perennial all-star infielder and designated hitter Alex Rodriguez, a now-retired New York Yankee and current ESPN broadcaster.
“Ultimately, our relationship with MLB and MLBPA was prioritized given the importance of our overall agency business and our continued investment in our baseball representation practice within WME Sports,” said Endeavor President Mark Shapiro said in a statement on Tuesday.
Silver Lake, a private equity firm that claims to manage $88 billion in assets, including a major stake in Endeavour, paid $280 million for the teams, according to the deadline. Endeavor and Silver Lake announced in a press release that the sale will not result in a change in management at the subsidiary that operates the 10 teams, Diamond Baseball Holdings.
Diamond Baseball Holdings Executive Chairman Pat Battle and CEO Peter Freund said in a joint statement that the sale is not expected to change their business model.
“After many months of invaluable support and guidance from Endeavor in building this organization, and now into the proven Silver Lake portfolio, the entire DBH organization is excitedly focused on this next phase of aggressive business growth,” they said.
At the time of the Endeavor acquisition in December, analysts wondered how the company’s executives could boost profits in a slow-growing company with steady footfall since 2008.
Endeavor began as a talent agency under CEO Ari Emanuel, but the company has expanded into other lines of business ranging from Ultimate Fighting Championship ownership to a streaming platform. The company added a marketing arm when it acquired IMG in 2013.
The Iowa Cubs are a AAA affiliate of the Chicago Cubs and, prior to the purchase of Endeavour, belonged to a group led by former Des Moines Register and Ames Tribune editor Michael Gartner since 1999.
Endeavor’s purchase of the team came as the club faced pressure from Major League Baseball to upgrade its downtown Des Moines stadium, Principal Park. Shapiro bragged in December about the company’s ability to “energize” teams, citing “Endeavor’s expertise in sponsorship sales, event operations, licensing, marketing and content creation.” .
Based in Menlo Park, California, Silver Lake claims to manage over $88 billion in assets. Some of Silver Lake’s investments include Airbnb, Dell, and SoFi Technologies.
In addition to the Iowa Cubs, the teams that Silver Lake acquired from Endeavor are:
- Memphis Redbirds (Triple A affiliate of the St. Louis Cardinals)
- Scranton/Wilkes Barre RailRiders (triple A affiliate of the New York Yankees)
- Hudson Valley Renegades (High-A affiliate of the New York Yankees)
- San Jose Giants (Single-A affiliate of the San Francisco Giants)
- Gwinnett Stripers (Triple-A affiliate of the Atlanta Braves)
- Mississippi Braves (Double-A affiliate of the Atlanta Braves)
- Rome Braves (High-A affiliate of the Atlanta Braves)
- Augusta GreenJackets (Single-A affiliate of the Atlanta Braves)
- Oklahoma City Dodgers (Triple-A affiliate of the Los Angeles Dodgers).