MLB raises private equity ownership limit to 20%

Major League Baseball has increased the maximum stake a private equity firm can hold in one franchise from 15% to 20%, widening the route for institutional capital into the league’s 30 clubs.

The rule was approved by MLB owners during the summer but was not publicly announced until 22 September. It brings baseball into line with the NBA, NHL and MLS, which also permit a single private equity investor to own up to 20% of a team. The NFL remains more restrictive at 10%.

MLB’s revised structure includes an important control safeguard. A financial investor cannot own a larger percentage than the franchise’s designated controlling owner. Because a controlling owner must hold at least 15%, the private equity ceiling will sit below 20% whenever that individual owns less than the maximum.

The change gives clubs more flexibility to raise capital without transferring operational control. It also expands the potential ticket size for approved funds as baseball valuations and the financing requirements around stadiums, media operations and debt continue to rise.

Around 10 MLB clubs already have direct private equity investment, while close to 20 have some form of connection to institutional capital. The San Francisco Giants and Athletics are among the teams with direct financial-investor positions.

The new limit applies to private equity ownership rather than the league’s rules for controlling shareholders. MLB has not published any corresponding change to the minimum 15% stake required from a team’s control person.