Carlyle co-founder David Rubenstein plans to buy Baltimore Orioles baseball team

Unlock the Editor’s Digest for free

Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.

Private equity billionaire David Rubenstein, the cofounder of Carlyle Group, plans to buy the Baltimore Orioles baseball team alongside an investor group including Michael Arougheti, the chief executive of Ares Management, for $1.73bn.

The planned multi-stage deal is subject to approval from Major League Baseball, two sources familiar with the matter told the Financial Times.

The group will first purchase a near 40 per cent stake from the current owners of the Orioles, the Angelos family. They then plan to acquire the remaining interest in the team after the death of Angelos patriarch Peter, aged 94, in order to lessen the family’s tax burden.

Rubenstein declined to comment through a spokesperson, while Arougheti and the Orioles did not immediately return requests for comment.

Rubenstein will be considered the “control person” — an important distinction for MLB rules — while Arougheti will be a large minority investor. There is expected to be a broader ownership group that may also include local Maryland business leaders, philanthropists and sports legends such as Orioles Hall of Fame shortstop Cal Ripken Jr, according to a source familiar with the matter.

Rubenstein, a native of Baltimore, is one of the pioneers of the $4tn private equity industry, having co-founded Carlyle Group in 1987 alongside William Conway and Daniel D’Aniello. In 2017, he stepped down as chief executive from the investment group with nearly $400bn in assets and has increasingly focused on philanthropy and personal investments. 

Arougheti is a cofounder of Ares Management, a firm best known for its vast and quickly growing lending operations. He has overseen the New York-based investment group’s ascent as its assets under management have risen to nearly $400bn.

The planned deal was first reported by Puck.  

Several US sports teams have changed hands in recent years, including American football’s Washington Commanders for $6bn, an all-time record sum for a professional club. The record for an MLB team remains the $2.4bn paid by hedge fund titan Steve Cohen for the New York Mets in 2020.

Rapid appreciation of national media rights for major sports leagues, in particular those for the US National Football League, has driven team valuations into the billions of dollars. The influx of private equity and sovereign wealth fund investment in sports has also contributed to the appreciation of sports companies as an asset class.

In recent years, the Orioles’ owners have been concerned with succession planning and efforts to modernise their famous ballpark, Camden Yards.  

Peter Angelos, a lawyer and native Baltimorean, led a consortium that bought the Orioles for $173mn in 1993, at an auction forced by the bankruptcy of previous owner Eli Jacobs.

The team has remained in his control ever since, though in 2020 the elder of Angelos’s two sons, John, took over as chair and chief executive amid Peter’s declining health. But the future of the Orioles has been a source of speculation particularly over the past year, when younger son Louis filed a lawsuit against John and their mother, Georgia, over control of the team.