We’ll get to the regular Friday news roundup in a bit, but first I want to take some time to dig into yesterday’s long Defector article on Diamond Baseball Holdings, the private equity company that in the last few years has bought up a staggering 35% of all minor-league baseball teams. This is the kind of big reported piece that Defector and its predecessor Deadspin used to specialize in, but that hardly anyone seems to have the time to write, or read, anymore. And with DBH’s rampage across the minors one of the enduring mysteries of the modern sports world, I wanted to give it a careful read and see what solid conclusions we can draw about the future of the minor leagues, the role of private equity in sports and the greater world, and anything else we can learn along the way.
Starting at the top:
- Defector has a long history with private equity, having been founded by refugees from Deadspin, whose parent company was bought by PE firm Great Hill Partners, which promptly drove the staff to quit en masse through its incoherent micromanaging. The article starts off, in fact, with a link to an interview with former Deadspin editor Megan Greenwell about how the experience inspired her to write a book about PE, in which she paints the entire industry as a bunch of rich dudes who glom on to anything they think they can extract a profit from — news sites, hospitals, dental offices for some reason — and impose policies more geared toward a quick cash grab than any sensical long-term business plan. (As just one example, Great Hill told Deadspin editors that they needed to insert sports scores on the top of their page, said Greenwell, because “their only version of success for a sports website was ESPN, and so their goal for us was make us ESPN, which didn’t make sense on several levels.”)
- The road to Diamond Baseball Holdings’ rapid expansion was laid in early 2021, right after MLB took over control of the minors. Previously, no one owner could control more than one team in any league — the Defector article doesn’t say, but I’m assuming this goes back to the bad old 19th-century days of “syndicate ball,” when one baseball owner could buy two teams and move all the best players to one, leaving the other to rot on the vine and become the 1899 Cleveland Spiders. Now, MLB and its MiLB arm had agreed, there would be no such limit, only an overall cap of 50 total teams that one owner could hold, with no more than 14 at each minor-league level.
- Into this breach stepped DBH, either with the explicit or implicit approval of MLB. (There’s a long confusing section about a slide deck that may or may not incriminate MLB officials in helping DBH get off the ground, but either way it’s clearly what the league intended to enable by watering down the rule against multiple ownership.) The company immediately started buying up teams willy-nilly, including ten teams in one day in December 2021: the Mississippi Braves, Gwinnett Stripers, Augusta GreenJackets, Hudson Valley Renegades, Iowa Cubs, Memphis Redbirds, Oklahoma City Dodgers, Rome Braves, San Jose Giants, and Scranton/Wilkes-Barre RailRiders.
- At the same time, MLB eliminated 43 affiliated franchises, casting some into the void and forcing others to reinvent themselves as independent league teams or as members of “draft leagues,” new circuits where amateur players would be invited to play for free to compete for attention in the majors’ annual player draft. This not only saved MLB teams money on paying player salaries, it created an abrupt game of musical chairs for minor-league cities to be left with affiliated teams — something that, as I wrote for Defector at the time, allowed MLB to bump up its stadium requirements, “sending signals to jettisoned cities that the best way to get back into the league’s good graces is to build a new stadium.” And that went for cities in fear of being jettisoned, too: As this week’s Defector piece recounts, several teams (the Hillsboro Hops and Richmond Flying Squirrels among them) extracted public stadium cash in part by holding the threat of being evaporated, or just moved to a now-vacant city, over the heads of local officials.
- DBH is owned by the PE company Silver Lake, which also owns a major stake in Fanatics, the apparel company whose questionable production standards led to the infamous see-through MLB uniforms of 2024. Not mentioned by Defector: Silver Lake is also a major investor in Oak View Group, the stadium and arena developer whose CEO Tim Leiweke abruptly resigned this week after he was indicted on federal bid-rigging charges for allegedly conspiring to get Legends Entertainment to drop out of bidding to operate the University of Texas’ basketball arena in exchange for getting lucrative subcontracts.
- “Who were these people? And why would private equity be interested in minor league baseball?” Employees for DBH teams say they don’t know; longtime minor league baseball owner Miles Wolff said to the The Nation last year, “Do you understand how Diamond Baseball hopes to make money? I’m mystified.” That Nation article, incidentally, largely concluded that DBH’s business plan was to cash in on stadium subsidies in the freshly depleted minors, noting that “in the three years DBH has been in operation, DBH-owned teams have extracted nearly $300 million in public money from local governments throughout the country, according to the Maine Center For Economic Policy.”
- Defector goes on to speculation that DBH is looking to either increase minor-league teams’ bottom line by hosting lots of concerts (fine as far as it goes, but good luck with that) or by building up Wrigley-style entertainment districts around minor-league stadiums — both of which are all the rage among all sports franchises, so while DBH may indeed be doing so, they’re almost certainly not alone.
All of which leaves us with the original question: What is DBH up to, and is it something specifically related to the evils of private equity, or just what any red-blooded rich dudes looking to fill their pockets would do? The article leaves off without ever really answering the question — though it does at least help establish the timeline by which MLB set the stage for a corporate takeover of the minors, all the better to maximize profits by exploiting minor-league cities and fans. What this means for the future of the minor leagues remains uncertain, though Megan Greenwell would surely warn that it’s not likely to be good.
Finally, one small editorial gripe: I know that headline writing is all SEO keywords these days, but it still seems like a huge missed opportunity not to have titled this story “Yo, Bum Rush MiLB The Show: The Story of PE.” There used to be an art to this stuff, dagnabit. Now if you’ll excuse me, I gotta go yell at some clouds.