Jonathan Mariner, former Chief Financial Officer and Executive Vice President of Major League Baseball, has joined Harbinger Sports Partners, a private equity fund focused on acquiring minority stakes in major U.S. sports teams. This move highlights the growing trend of private equity involvement in professional sports.
Harbinger Sports Partners: A New Player in the Game
Harbinger Sports Partners launched in May with a substantial $750 million fund. The firm aims to capitalize on opportunities within the four major U.S. sports leagues: MLB, the NFL, the NBA, and the NHL. The fund is co-founded by Steve Cannon, former CEO of Mercedes-Benz USA, and Rashaun Williams, a guest judge on Shark Tank and a limited partner in the Atlanta Falcons.
Mariner joins the team as a general partner alongside Mark Cuban, billionaire and part-owner of the Dallas Mavericks, who joined the firm earlier in May. This impressive lineup of experienced executives and investors positions Harbinger Sports Partners as a significant player in the sports investment landscape.
Mariner's MLB Legacy and Future Vision
During his tenure as CFO at MLB from 2002 to 2014, Mariner witnessed a period of significant growth in team valuations. He observed the rise in team sale prices, from the Kansas City Royals being sold for $96 million in 2000 (later sold again in 2019 for $1 billion) to the Los Angeles Dodgers commanding a $2 billion price tag just 12 years later. Prior to his league-level role, Mariner also served as CFO of the Miami Marlins, giving him a deep understanding of the financial dynamics within individual teams.
Despite the substantial growth in baseball franchise values, Mariner believes that MLB teams are currently undervalued compared to their counterparts in the NFL and NBA. He sees this as a strategic opportunity for Harbinger to achieve significant returns on investment within baseball.
"I actually think Major League Baseball has, from an investor perspective, one of the more interesting opportunities," Mariner stated, emphasizing the potential for growth within the league. He believes that if MLB can successfully execute its business model improvements, valuations will increase over time, mirroring the success seen in football and basketball.
The Media Rights Landscape and Its Impact
The current media landscape plays a crucial role in the financial health of professional sports leagues. MLB's existing media deals with FOX and TBS are set to expire in 2028. Additionally, ESPN opted out of its $550 million agreement after 2025. These impending changes in media rights create both challenges and opportunities for MLB and its investors. Successful renegotiation of these deals will be vital for driving revenue and increasing team valuations.
Private Equity's Growing Influence in Sports
The NFL opened its doors to private equity ownership last summer, albeit with stricter regulations compared to other leagues. The NFL allows for a maximum of 10% private equity ownership. In contrast, MLB, the NBA, and the NHL permit teams to sell up to 30% to private equity funds. The San Francisco Giants, under majority owner Charles B. Johnson, sold a 10% stake to private equity in March, further demonstrating the increasing acceptance of this investment model.
Mariner highlights the necessity of private equity in sustaining the escalating prices of sports franchises. "Given franchise values, I think it really requires other sources of capital to sustain the kind of prices that are being asked for," he explained. He emphasizes the difficulty for a single individual to finance a significant portion of a multi-billion dollar franchise, making it necessary to diversify the ownership structure.
Collective Bargaining Agreements and Investment Stability
Mariner emphasizes the importance of collective bargaining agreements (CBAs) in the investment strategy of Harbinger Sports Partners. He points to baseball's ongoing CBA negotiations, with the current deal expiring on December 1, 2026, as a critical factor.
"You almost always have to look at collective bargaining as a fundamental investment principle," Mariner stated. He highlights that labor costs typically represent around 50% of a team's revenue, making labor stability a crucial element for any potential investment. The security provided by a CBA over a defined period is highly valuable to investors. Mariner draws a comparison to the NFL, noting that its long periods of labor peace have contributed to its financial prosperity. He suggests that MLB is aiming to achieve a similar level of stability in its upcoming negotiations.
Currently, MLB and the MLB Players Association (MLBPA) appear to be at a standstill, each maintaining their positions, raising the possibility of a lockout. While uncertainty surrounding the CBA could potentially lead to lower initial investment prices, Mariner stresses that stability is paramount for attracting prospective franchise investors.
Focusing on Domestic Opportunities
While Harbinger Sports Partners is currently focused on investing in major U.S. sports leagues, Mariner acknowledges that international sports investments are not entirely off the table for the future. However, for the time being, the firm's strategy centers on capitalizing on opportunities within the well-established and lucrative U.S. sports market.
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