Mets Fans Beware, Private Equity-Owned Teams Lose on the Field

Long-suffering Mets who yearn for the end of the nearly two-decade, often-controversial Wilpon ownership era got welcome news this week.

Harris Blitzer Sports & Entertainment, led by Apollo Global Management Inc. co-founder Josh Harris and Blackstone Group Inc. executive David Blitzer, is preparing a bid to take control of New York’s second-favorite baseball team.

But here’s a disheartening fact: Harris Blitzer’s won-loss record is just 41% with its two other major U.S. sports teams: the Philadelphia 76ers of the National Basketball Association and the National Hockey League’s New Jersey Devils. That’s actually lower than the Mets’ 49% winning percentage since 2003, the first full season after Fred Wilpon bought out Nelson Doubleday.

And the Harris Blitzer partners aren’t an outlier among private equity billionaires who have taken control of U.S. sports teams. Data compiled by Bloomberg show that franchises owned by these titans of capitalism have largely been losers on the field, even while becoming winners for their keepers’ investment portfolios.

Six teams in the NBA and NHL have majority owners who come from the world of private equity. A seventh, the yet-to-be-named NHL franchise in Seattle owned by TPG’s David Bonderman, begins play in 2021. No teams in Major League Baseball, the National Football League, the Women’s National Basketball Association or Major League Soccer count buyout such investors among their primary owners.

The Pittsburgh Penguins, co-owned by Yucaipa Cos. founder Ron Burkle and former hockey great Mario Lemieux, are the only team with roots in private equity that has won a championship. The NHL franchise has taken home the Stanley Cup three times since Burkle and Lemieux purchased the team out of bankruptcy in 1999. For their winning ways, the unlikely ownership duo has seen the value of the organization rise by 521%, based on the latest valuation by Forbes.

The 76ers have seen the largest jump in valuation among the six teams, a whopping 597%, despite having the worst winning percentage. Under the leadership of former general manager Sam Hinkie, the franchise was criticized for tanking three seasons by stripping the team of its best players, in a manner reminiscent of how private equity firms slash personnel and capital spending at their portfolio companies.

However, the team has made the playoffs the last two seasons and is among the 22 that made the to resume the virus-stalled NBA season this summer. Despite the turnaround, the rebuilding process hasn’t always been smooth. Two key draft selections — first overall choice Markelle Fultz in 2017 and third overall pick Jahlil Okafor in 2015 — were gone after short stints, and the team looks out of place without a strong three-point shooter in today’s game.

Among the four basketball franchises owned by private equity investors, only the Marc Lasry and Wes Edens-owned Milwaukee Bucks have had a winning record. The historically moribund franchise has won 57% of its games since Lasry and Edens purchased the team in 2014. It currently sports an 82% winning percentage through March, when play was postponed due to the Covid-19 virus, the best in the NBA this season.

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