What to know about Diamond Baseball Holdings, the company in line to buy the WooSox

WORCESTER — The day after news broke that a rising sports ownership group in Minor League Baseball is reportedly purchasing the Worcester Red Sox, details about the planned purchase remained scant.

On Thursday, the T&G confirmed a report from The Boston Globe that owners of the Worcester Red Sox have reached an agreement to sell the team to Diamond Baseball Holdings.

The team, which is in the third year of a 35-year lease to play at Polar Park, is expected to remain there.

According to a report in the Globe by Michael Silverman, WooSox principal owner Larry Lucchino is expected to stay on as chairman.

Diamond Baseball Holdings plans to buy out a majority of the 11 owners with the deal pending approval of Major League Baseball. Ralph D. Crowley Jr., president and CEO of Polar Beverages, is planning to stay involved with ownership of the WooSox.

More: Worcester Red Sox to be sold to Diamond Baseball Holdings; team will remain at Polar Park

The news came weeks after Lucchino indicated he wanted to sell the WooSox and retire in an interview with the UnAnchored Boston podcast.

The two parties have not officially confirmed the sale, nor provided any details of the purchase.

On Thursday, a call to Lucchino wasn't returned and WooSox President Charles Steinberg responded by text to an inquiry: “We have no news or announcements at this time.”

A request for comment from Diamond Baseball Holdings was not returned Friday.

Who is behind Diamond Baseball Holdings?

Diamond Baseball Holdings, headquartered in New York, has quickly built a large portfolio of minor league teams. The team currently owns 26 teams, more than 21% of the 120 teams in Minor League Baseball.

Its executive chairman is Pat Battle, who formerly led the Collegiate Licensing Co., which operates multimedia and ticketing rights for colleges and universities around the country. The CEO is Peter Freund, a veteran sports executive who recently worked as a consultant to the Major League Baseball commissioner's office on licensed affiliates.

The group was formed in December 2021 by sports and entertainment company Endeavor. At the time of its founding a news release described Diamond Baseball Holdings as "an organization dedicated to supporting, promoting and enhancing the sport of baseball through professional management, best practices, innovation and investment."

At the time of Diamond Baseball Holdings' creation, Endeavor had already signed purchasing agreements to acquire nine MLB Professional Development League Clubs.

Last year, global technology investment firm Silver Lake Technology Management LLC acquired Diamond Baseball Holdings from Endeavor.

According to Silver Lake's website, the firm has approximately $101 billion in combined assets. Among its assets is a significant stake in the parent company of Manchester City Football Club, one of the most profitable soccer teams in Europe.

What other teams does Diamond Baseball Holdings own?

Diamond Baseball Holdings has more than doubled its initial portfolio of minor league teams in two years. Analysts believe they are working on acquiring even more teams.

The following teams are currently owned by the group: the Albuquerque Isotopes, Altoona Curve, Augusta Greenjackets, Birmingham Barons, Down East Wood Ducks, Fresno Grizzlies, Gwinnett Stripers, Hickory Crawdads, Hudson Valley Renegades, Iowa Cubs, Lansing Lugnuts, Memphis Redbirds, Midland Rockhounds, Mississippi Braves, Norfolk Tides, Oklahoma City Dodgers, Portland Sea Dogs, Rome Braves, Salem Red Sox, San Jose Giants, Scranton/Wilkes-Barre RailRiders, Springfield Cardinals, St. Paul Saints, Tulsa Drillers, Vancouver Canadians and Wichita Wind Surge. 

The Salem Red Sox (Single-A) in Virginia and the Portland Sea Dogs (Double-A) in Portland, Maine, are Red Sox affiliates, like the Worcester Red Sox.

On its website, Diamond Baseball Holdings said it is "committed to elevating fan experiences, creating 'centers of energy,' fostering dynamic engagements for brands and highlighting the evolution of the Minor League Baseball environment. It is grounded in a deep-rooted appreciation for traditions, community and the sport of baseball."

Victor A. Matheson, a College of the Holy Cross sports economist, said Diamond Baseball Holdings has been acquiring minor league teams as fast as it can do so. He said its quick acquisition of teams, including league competitors, brings to light the lack of actual competition in Minor League Baseball.

"Teams aren't really trying to beat each other in any sort of reasonable way," Matheson said. "What we have now is Diamond Baseball Holdings is going to own the WooSox as well as a bunch of their competitors. This practice is actually banned by every major sports league in the United States."

The acquisition of several teams by one holding company shows the teams are viewed more as entertainment products than actual sports products, Matheson said.

Saying the main goal of minor league team owners is to develop players for the majors and present an entertainment product for the nearby communities, Matheson said it can be difficult for most fans to form attachments to minor league teams and follow them through a season.

What is the future of WooSox at Polar Park?

While Lucchino said in the podcast interview that the team was trying to find a local buyer, the management group lists its location as New York City on LinkedIn.

The WooSox held their first season at Polar Park in 2021. The $160 million ballpark was the most expensive minor league facility constructed at the time of completion.

The Worcester Red Sox last month finished their third season at Polar Park with the seventh-highest average attendance among all minor-league teams. Average attendance is based on paid attendance rather than physical "turnstile" attendance.

Matheson said there will likely be no major difference in the WooSox from the perspective of baseball fans.

"The typical fan is not going to see any difference here at all," Matheson said.

The city financed construction of the ballpark, with the goal of covering the borrowing with new property taxes, lease revenues and other new revenue sources generated by private development associated with the project.

The city borrowed about nearly $146 million to pay for construction and has to pay back that debt over 30 years.

The ballpark's finances came under some scrutiny this year following the publication of a study by Robert W. Baumann, a Holy Cross professor of economics, and John Charles Bradbury, a professor of economics, finance and quantitative analysis at Kennesaw State University in Georgia. Part of the study evaluated Polar Park's pro forma model for financing.

Using analytical tools to evaluate the model, Bradbury and Baumann, who has been a longtime critic of the feasibility of Polar Park's financial promises, found the model would produce a $40 million to $60 million deficit for the city.

In response, the city gave a presentation where it argued Polar Park's District Improvement Financing is on track to raise revenue over 30 years. The city projects the early years to be the hardest for the ballpark, with money going out exceeding money coming in between 2020 and 2022.

The city is expecting the DIF reserve to begin to grow in the coming years with new projects coming underway and additional revenue streams being activated. Fiscal 2024 is expected to be the tightest year.

All it takes is a casual walk around the ballpark area or a glance down from a tall building to see several new projects in the works. The city expects some to finish by the end of next year.

The reported new ownership would also be coming in as questions remain about use of the ballpark outside of baseball games.

The WooSox and Polar Park came to Worcester with promises to host many community activities, including major concerts. A major concert has not yet been announced. A September 2022 Telegram & Gazette article reported that documents pointed to an access doorway design as a potential hindrance to bringing concert equipment into the ballpark.

Members of the City Council have also brought up the lack of city revenue-generating days at the ballpark. Annual allocations of eight revenue-generating days, as well as 10 community event days, are part of the team's lease agreement.

The lease also includes several other provisions related to public and community use of the ballpark that an October T&G report found had not yet been fully implemented.

Matheson, who has been a longtime critic of public financing and taxpayer subsidies for ballclubs, particularly for the city's deal with the WooSox, said it was always "absurd" to believe that the WooSox ownership was looking out for Worcester. He said Lucchino has always been good at using public subsidies to raise the values of teams and then make a profit off them through a sale.

"This was always an investment property for them and the way that they increase the value of their investment property is by extracting as much money from local Worcester taxpayers as possible," Matheson said.

The economist added that the question remains how much more the owners will be able to sell the team for as a result of the major investments from the city.

This article originally appeared on Telegram & Gazette: What to know about Diamond Baseball Holdings and the Worcester Red Sox