The Orioles get ready to be run by private equity.

The Orioles are getting ready to be run by private equity.

David Rubenstein, co-founder of the Carlyle Group and a private equity billionaire, wants to acquire the Baltimore Orioles sports team for $1.73 billion with a group of investors that includes Michael Arougheti, CEO of Ares Management.

Two people who know about the situation told the Financial Times that Major League Baseball has to agree to the planned multi-stage deal.

A spokesperson for Rubenstein said that he would not comment, and Arougheti and the Orioles weren’t responsive right away to requests for comment.

The group will initially buy a nearly 40% stake from the Angelos family, who currently own the Orioles. To lower the family’s tax burden, they subsequently plan to buy the rest of the team’s shares after Angelos’s patriarch Peter dies at age 94.

Arougheti is expected to make a significant investment as a minority investor, while Rubenstein will assume the role of the “control person.” This is an important difference in MLB rules. Puck was the first to report on the deal.

Someone who knows about the situation says that there will likely be a larger group of owners that may include business leaders from Maryland, philanthropists, and sports legends like Orioles Hall of Fame shortstop Cal Ripken Jr.

Rubenstein is from Baltimore and is one of the founders of the $4 trillion private equity industry. He started the Carlyle Group with William Conway and Daniel D’Aniello in 1987.

In 2017, he quit as CEO of an investment group with almost $400 billion in assets. Since then, he has spent more time doing charitable work and making personal investments.

Ares Management is best known for its huge and quickly growing lending business, and Arougheti helped to start it.

He has been in charge of the growth of the New York-based financial group, as its assets, according to management, have reached almost $400 billion.

In the past few years, many US sports teams have changed hands. For example, the Washington Commanders of the NFL were bought for $6 billion, which is the most money ever paid for a professional team.

Teams are now worth billions of dollars because the national media assets for major sports leagues, especially those of the United States National Football League, have gone up so quickly in value.

A lot of private equity and sovereign wealth funds are investing in sports, which has also helped the value of sporting goods businesses as an asset class.

The record for the purchase of an MLB team is still the $2.4 billion that Steve Cohen, the head of a huge hedge fund, paid for the Mets of the National League in 2020.

In the past few years, the Orioles’ owners have been planning for the next owner and trying to bring their famed ballpark, Camden Yards, up to date.

A lawyer from Baltimore named Peter Angelos led a group that bought the Baltimore Orioles team for $173 million in 1993 at a public auction that had to happen because the previous owner, Eli Jacobs, went bankrupt.

He has been in charge of the team ever since, though in 2020, John, the older of Angelos’s two sons, took over as chair and CEO because Peter’s health was getting worse.

But there has been a lot of talk about the Orioles’ future, especially since their younger son Louis sued John and their mother, Georgia, over control of their team last year.

A source told the outlet that Mike Arougheti, co-founder of Ares Management and a private equity mogul, will become a minority partner. Cal Ripken, Jr., an Orioles legend, is also part of the group that bought the team, a source told the outlet.

With the move, the Angelos family would no longer own the property after 31 years. In 1993, Peter Angelos paid $173 million to buy the Orioles. The switch comes just one year after the O’s won 101 games and won the AL East title.