Major League Baseball Advanced Media — the baseball subsidiary behind MLB.com. MLB.tv and a lot of stuff about which you have no idea — is a gold mine. It, more than anything, has been responsible for the sharp increase in baseball revenues in recent years. And as an added bonus, the company just gets stuff right. I can watch a Mariners-A’s game on a Tuesday night in Ohio if I want to, and I can do so relatively cheaply. And it works. As does most of the stuff they do. Viva MLBAM.
But when you get a money-making enterprise that folks like, other folks will want to invest in it. And as Business Insider reported the other day, lots of private equity groups want to invest in MLBAM. But baseball is rejecting these overtures, preferring to forgo the instant liquidity in favor of keeping it the league and the owners’ very own private thing. BI has some possible explanations for this:
A source close to the talks tells us the company gets “call a day” from private equity firms, but that the company isn’t looking to sell a stake for a few reasons:
- It’s already loaded with cash.
- Owners are already getting a huge dividend.
- Selling a billion dollar stake in MLBAM any time soon would make it very hard for owners to argue that they’re broke in upcoming labor negotiations with players.
- Selling a stake could further complicate the ownership stake and perhaps even force a dreaded shotgun IPO.
Those are all very plausible reasons. I’ll add another one: The books of major league baseball owners are a thicket of self-dealing and chaos, and there’s no way in hell they want to open them up to anyone they don’t have to lest people see just how ugly they really are. If you doubt this, just recall the fun stuff we saw when Frank McCourt and Tom Hicks were forced to open their books in litigation. Or when Deadspin reported on a bunch of leaked financials from the Pirates, Marlins and other teams.
It’s less the case than it used to be, but in a lot of ways baseball teams are multi-million dollar businesses being run like a small town auto dealership. They make money to beat the band, but they’re not about to share that with the Wall Street crowd.