 |
GETTY IMAGES
Former New York Yankees chairman Steve Swindal would merge SFX Baseball with Dominican baseball academy.
|
Former New York Yankees Chairman Steve Swindal is working on a plan to buy MLB player representation firm SFX Baseball for $40 million and merge it with his youth baseball academy in the Dominican Republic, creating a new venture that, according to the company’s pitch to investors, would have an edge in representing baseball talent.
The deal has not yet been consummated, but Swindal has hired investment bankers who are soliciting Wall Street investors to provide seed money for the new company as well as funding to buy SFX Baseball, which represents 93 players on MLB 40-man rosters, including stars Justin Verlander, Zack Greinke, Mariano Rivera and Alfonso Soriano.
“We have had a lot of interest,” said Swindal, who left his job as chairman of Yankee Global Enterprises LLC in 2007, shortly after his wife, Jennifer Steinbrenner, the daughter of late Yankees owner George Steinbrenner, filed for divorce. Swindal said he is currently divorced and has no ownership stake in the Yankees.
Since leaving the Yankees, Swindal and Abel Guerra, the Yankees’ former vice president of international relations, have founded Pan American Sports Group, which owns a training center in the Dominican Republic where about 30 elite baseball players, ages 14 to 16, are training.
Major League Baseball teams can sign players to contracts when they are 16. For the players at this facility, PASG brokers those deals.
Mark Pieper, an MLB player agent who is a principal of Chicago-based SFX Baseball, which was formerly part of the defunct SFX Sports, said last week there was a 50-50 chance of the deal being consummated, after telling SportsBusiness Journal in an interview the week before, “We are not shopping the company.”
An entity named SFX Baseball Capital Partners was incorporated in Delaware on Nov. 3, 2010, according to the state’s Division of Corporations’ website. Swindal said he and Mark Isaacson, CEO of investment firms Strategic Development Partners and Great Court Capital, formed it as a “shell company” to hold SFX Baseball and his academy company, PASG, if it is funded by investors.
Isaacson, who has previously been involved in MLB franchise sale efforts, did not return a phone call.
Swindal, Isaacson and Guerra, as well as Pieper and other SFX Baseball agents Pat Rooney and Fernando Cuza, would be the executives leading the new company, if it is funded.
According to two different documents that have been shown to potential investors, and obtained by SportsBusiness Journal, investors are being sold the opportunity to get in on the ground floor of a baseball player representation firm being touted as having an edge over existing U.S. MLB player rep firms because of its pipeline to young talent in Latin America.
“SFX Baseball Capital Partners (“SFXBCP”) is creating the leading agency serving the professional baseball community from player development and career management to contract negotiation and marketing,” states one investment document created by MESA Securities. A principal at MESA did not return a phone call.
A second document, titled “Overview of Sports Agency Opportunity,” states that the new entity is seeking investors willing to put up an initial “seed round” of $25 million in financing. It is not clear exactly how much money Swindal is seeking for the new entity, and he declined to discuss the economics of the proposed deal.
The overview document describes the competition in the business of representing MLB players, including blurbs on rival agencies Boras Corp., Wasserman Media Group, Peter Greenberg & Associates, CAA Sports, ACES and MLB agent Dan Lozano.
“Creating a holding company that owns (the player rep firm) SFXBB and PASG will benefit both entities,” the document states. “SFXBB will have unparalleled access to recruit top Latin American prospects, earlier than any other agency presently has.”
Swindal said the teenage players PASG trains and houses, most of whom come from impoverished families, will not be under any obligation to sign with an SFX Baseball agent, but he hopes they would, if the transaction goes through.
Every MLB club has a facility in the Dominican Republic, but under MLB rules, those clubs can house players only ages 16 and older, and they are allowed to stay at those facilities for only 30 days. Guerra, who supervised the building of the Yankees academy when he worked for the club, said the PASG academy is comparable to the top MLB club academies in the Dominican Republic.
Staff writer Eric Fisher contributed to this report.
