Fresno Grizzlies go corporate with sale to private equity firm. Will baseball fans notice? | Opinion

Throughout their 26-year existence the Fresno Grizzlies have always been a sole enterprise.

Those days are over. Following the team’s recently announced purchase by Diamond Baseball Holdings, the Grizzlies are now part of a conglomerate owned by a private equity firm that has been snapping up minor-league baseball franchises at an astounding rate.

The Grizzlies are Diamond Baseball Holdings’ 26th acquisition since 2021, the first season following the COVID shutdown during which Major League Baseball drastically restructured the minor leagues. Fresno’s demotion to the Class-A California League following more than two decades in the Triple-A Pacific Coast League was an unfortunate result of that revamp.

Diamond Baseball Holdings, a subsidiary of the investment firm Silver Lake, becomes the fourth ownership group in Grizzlies history after purchasing the team from Fresno Sports & Events LLC for an undisclosed sum.

Will baseball fans who simply enjoy spending spring and summer nights at the ballpark notice the change? Probably not.

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During its brief history, DBH has made a practice of retaining the team’s current management. The same is true in Fresno. Longtime Grizzlies president and general manager Derek Franks gave assurances that no changes or reductions are planned to current staffing levels or the operations budget.

“I believe any changes fans might see will be positive,” Franks said. “They intend to come in and give us access to further resources that help us grow.”

Until MLB restructured the minor leagues and loosened ownership regulations, single entities were not allowed to own more than one team in the same league. That rule clearly doesn’t apply to DBH, which owns multiple franchises in eight of the 11 affiliated leagues.

That includes the California League, where the Grizzlies (who will remain a Class-A affiliate of the Colorado Rockies) and the San Jose Giants are now sister operations.

Ownership group’s Hollywood ties

Diamond Baseball Holdings was created in 2021 by Endeavor, an entertainment holding company formed by high-powered Hollywood talent agent Ari Emanuel who also owns Ultimate Fighting Championship and World Wrestling Entertainment. In 2022, following a conflict of interest dispute with the Major League Baseball Players Association, ownership of DBH shifted to Endeavor’s parent company, Silver Lake.

After purchasing nine teams in December 2021, DBH quickly became the minor-league baseball’s largest ownership group and has continued to rapidly expand its portfolio. The Grizzlies are the 12th announced acquisition since September.

Franks, a Grizzlies employee since 2004 and senior manager since 2013, said he has several friends who work in the front offices of other teams that are now under the same corporate umbrella.

“Everybody I know that has gone through this transition has said nothing but positive things,” he said.

The Grizzlies’ sale to Diamond Baseball Holdings must be approved by the Fresno City Council. That should be a formality but will require a rework of the lease agreement between the city of Fresno and the new owners over their use of publicly owned Chukchansi Park.

Councilmember seeks larger city share

Under the current lease with Fresno Sports & Events, the Grizzlies pay $100,000 in annual rent for the stadium, plus a $1 “turnstile fee” for every attendee over 150,000 (the 2023 total attendance was 277,089). There’s also a profit sharing clause that entitles the city to 12.5% of the team’s net cash flow up to $500,000, 20% up to $1 million and 25% for any amount in excess of $1 million. Another requirement: annual certified audits of the team’s finances.

Even so, Fresno City Councilmember Miguel Arias indicated he will push to renegotiate terms so that the city gets a larger revenue share from stadium naming rights, parking and non-baseball events like the Taco Truck Throwdown and Mexican pro soccer friendlies. Which he says are more profitable than Grizzlies games.

“Every owner has promised to make investments in the stadium, but that’s never come to fruition,” said Arias, noting the city mostly footed the bill for the $7.7 million in improvements since 2019.

Five years ago, when Fresno Sports & Events purchased the Grizzlies, the largest sticking point during the prolonged negotiations was a “non-relocation agreement” that gave assurances to the city that the team would not seek to play elsewhere.

The penalties for breaking the deal are harsh. If the Grizzlies move at any time before 2036, ownership would essentially be on the hook for paying off all the remaining stadium debt.

The stipulated amount is $26 million in 2023, $23 million in 2024 and drops by roughly $3 million in every year thereafter. Low Class-A clubs such are worth about $8 million, according to MLB’s own valuation.

Those figures strongly suggest minor-league baseball will remain in downtown Fresno for the foreseeable future. Regardless of who owns the Grizzlies.