The San Francisco Giants have sold about 10% of the team to private equity group Sixth Street in order to pay for upgrades to the franchise’s 25-year-old stadium and other facilities, as well as the massive Mission Rock real estate development that's currently taking shape next door to the ballpark.
Adding the San Francisco-based firm to the Giants’ ownership roster represented the team’s “first significant investment in three decades,” said Giants President and CEO Larry Baer in a press release Tuesday.
U.S. professional sports teams have dabbled in real estate development in recent years to raise money and drive up the values of their franchises as city and state governments have granted them permission to transform the land around ballparks into offices, apartment buildings, hotels and shopping malls.
Major League Baseball teams are allowed to sell up to 30% of their teams to private equity firms, opening up new revenue streams for real estate developments.
Details of the latest team purchase, approved by Major League Baseball officials this week, were not disclosed. The team is owned by a syndicate of 35 owners and was last valued at $3.8 billion by Forbes.
The Giants said in a press release that the cash from the sale would enable the team to keep delivering “a best-in-class experience” to its fans. The New York Times first reported the deal Tuesday, saying it would finance improvements to the franchise’s 25-year-old stadium, Oracle Park, as well as upgrading its training facilities, including its complex in Scottsdale, Arizona.
Mission Rock
The funds will also be used for Mission Rock, a sprawling, mixed-use project near the shoreline of the San Francisco Bay that is set to transform the previously vacant land south of the stadium.
The venture has recently become a magnet for hot Bay Area eateries and luxury apartment dwellers who are quickly leasing up space in the project’s early phases.
A partnership between the Giants and developer Tishman Speyer, Mission Rock is ultimately set to redevelop 28 formerly derelict acres that once housed warehouses into a “seven-day neighborhood” that ultimately calls for 1.4 million square feet of office space, 200,000 square feet of retail and 1,200 homes.
Though the Giants have been tight-lipped about their specific plans, scaffolding and other signs of construction work has been visible recently in certain parts of Oracle Park. A local sports reporter noted last month that there was scaffolding around the infamous 80-foot Coca-Cola bottle that sits above the stadium’s left field bleachers; the soda ad doubles as a children’s slide.
Baer added "Sixth Street believes, just as we do, in our strategic vision for our future as one of the world’s leading sports and entertainment franchises, as well as the important role our organization plays in uplifting San Francisco and the entire Bay Area.”
Sports teams turn to real estate
Land rights are a subsidy public officials can offer owners to pay for the skyrocketing cost of building new stadiums.
The Chicago Cubs have been buying up buildings and businesses around iconic Wrigley Field, and the New York Mets owner Steve Cohen has proposed an $8 billion plan to develop the area around his ballpark, Citi Field, which includes plans for a casino.
Just northwest of Atlanta, the Braves baseball team created a development company — with funding by the team and private and public dollars — to build Truist Park and The Battery mixed-use project surrounding it.
Sixth Street has investments in the N.B.A.’s San Antonio Spurs and the European soccer clubs F.C. Barcelona and Real Madrid and owns a controlling interest in Bay F.C., a women’s soccer team that is building a state-of-the-art training facility on San Francisco’s Treasure Island.
According to the New York Times, the Giants are planning to enhance the stadium’s main entrance, adding designated sections for rooter clubs akin to those in soccer stadiums and upgrading and expanding premium sections that include all-inclusive food and drinks service.