The Iowa Cubs have changed hands for the second time in eight months as the company that bought the team sold it to a close affiliate under pressure from Major League Baseball over a perceived conflict of interest.
Endeavor Group Holdings, a California-based sports and entertainment and marketing conglomerate, announced Tuesday afternoon that the company had sold the Cubs and nine other minor league baseball teams it acquired this year to one of its biggest investors, Silver Lake Partners.
The sale leaves in place the company, Diamond Baseball Holdings, that has been managing the Des Moines team and the others for Endeavor. No other immediate changes were announced.
Diamond Baseball Holdings' Executive Chairman Pat Battle and CEO Peter Freund said in a joint statement that the sale shouldn't change their business model.
“Coming off several months of invaluable support and guidance from Endeavor in establishing this organization, and now moving into Silver Lake’s proven portfolio, the entire DBH organization is enthusiastically focused on this next phase of aggressively growing the business," they said.
The sale comes after the Major League Baseball Players Association warned that the union would decertify Endeavor's talent agency group, William Morris Endeavor, as an agent for MLB players if the company continued to own clubs, the Athletic reported in January.
Endeavor's minor league acquisitions had created a scenario in which a single company employed sports agents and owned clubs charged with developing players for Major League Baseball.
William Morris Endeavor-represented talent 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 the MLBPA took priority given the importance of our overall agency business and our continued investment in our baseball representation practice within WME Sports," Endeavor President Mark Shapiro said in a statement Tuesday.
Silver Lake, a private equity firm that claims to manage $88 billion in assets, including its major stake in Endeavor, paid $280 million for the teams, according to Deadline, a website that covers the entertainment industry.
The Iowa Cubs are a AAA affiliate of the Chicago Cubs and, prior to the Endeavor purchase, had been owned by a group led by former Des Moines Register and Ames Tribune editor Michael Gartner since 1999.
Gartner did not respond to calls requesting comment on the sale to Silver Lake. At the time of the sale to Endeavor, he cited his age, then 83, and the expense of MLB-required upgrades to the Iowa Cubs' home, Principal Park, as factors in the decision. He expressed confidence that Endeavor would have the deep pockets to cover the expense.
On Monday, the day before the sale was announced, the Des Moines City Council approved $5.8 million in improvements to the city-owned stadium. An agreement called for the team's owner to contribute up to another $1 million, and a city spokesman on Wednesday expressed confidence Silver Lake will honor the arrangement.
Shapiro boasted in December about the company's ability to "turbocharge" teams, citing Endeavor's "expertise across sponsorship sales, event operations, licensing, marketing and content creation." But at the time of Endeavor's acquisition in December, analysts wondered how the company's executives could increase profits in a slow-growth business with flat attendance since 2008.
Endeavor began as a talent agency under CEO Ari Emanuel, but the company has expanded to other lines of business that range from ownership of the Ultimate Fighting Championship to a streaming platform. The company added a marketing arm when it acquired IMG in 2013.
Silver Lake is based in Menlo Park, California. Some of its investments have included stakes in Airbnb, Dell and SoFi Technologies.
In addition to the Iowa Cubs, the teams Silver Lake acquired from Endeavor are the:
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).
Staff writers Philip Joens and Tommy Birch contributed to this article.
This article originally appeared on Des Moines Register: Endeavor sells Iowa Cubs to Silver Lake Partners amid MLB pressure