Are the Baltimore Orioles now positioned to bury the Yankees, take over the AL East?

Group led by private equity All-Star David Rubenstein buys the Orioles from the Angelos family for $1.725B, with a goal to bring a World Series Trophy back to the City of Baltimore.

New York Yankees v Baltimore Orioles
New York Yankees v Baltimore Orioles / Mitchell Layton/GettyImages
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Multiple reports emerged mid-week that longtime Orioles owner John Angelos and his family planned to sell the team to a group led by Carlyle Group co-founder David Rubenstein, who grew up playing little league in Baltimore, and fellow private equity billionaire Mike Arougheti, who co-founded Ares Management and lives in Nyack, NY. Quickly, those reports were confirmed by the men leading the charge.

Orioles’ “Iron Man” legend and Hall of Famer Cal Ripken is also involved. The sale price is said to be $1.725B, and the deal feels very similar to when hedge fund billionaire Steve Cohen bought the New York Mets from the Wilpon family for $2.42B in September 2020. Like Mets fans then after years of heartbreak, Orioles fans appear to be rejoicing at the news.

In Rubenstein’s statement on the deal, he writes, “Our collective goal will be to bring a World Series Trophy back to the City of Baltimore. To the fans I say: we do it for you and can’t do it without you. Thank you for your support.”

According to John Ourand of Puck News, an initial 40% stake will change hands to be followed by the remaining 60% stake, which will transfer to the new ownership group once Peter Angelos, the family patriarch who is now 94 years old, passes away.

That’s to avoid more significant capital gains taxes if they sell the franchise in its entirety before he dies. He’d purchased the team for $173M in 1993.

Baltimore native and lifelong Orioles fan Rubenstein, 74, would become the franchise’s “control person,” assuming the deal is approved by the other MLB owners when they hold their annual meetings in Orlando, Florida next week. He’s amassed a personal net worth of about $3.7B since co-founding the Carlyle Group, a private equity giant with $382B in assets under management, in 1987.

Jeff Barker of the Baltimore Sun also reports that Rubenstein will acquire the O’s share in Mid-Atlantic Sports Network (MASN), which is co-owned with the nearby Washington Nationals. It’s not yet clear if there’ll be any change in the relationship between the Orioles and the Nationals, who have had a long-running dispute over broadcast fees.

The deal has the potential to alter the competitive landscape in the AL East for the next decade. The Orioles are stacked with controllable, young talent, including three players who all ranked as the top overall prospect in baseball at one point before their MLB debuts since 2022 alone.

And they have tons of payroll flexibility. As ESPN’s Buster Olney notes, “The Orioles had only one player working under a multi-year contract last season, backup catcherJames McCann.“ They’ve since signed closer Félix Bautista, who will miss the 2024 season after undergoing Tommy John surgery last September, to a two-year extension that takes him through his first year of arbitration. All they've been waiting for is a passionate ownership group that's flush with cash.

In both the newly released MLB Pipeline and Baseball America (subscription required) top 100 rankings for 2024, Baltimore had six prospects, including 20-year old top prospect Jackson Holliday. This marks their third consecutive season having the No. 1 overall ranked prospect on Baseball America’s list,after Gunnar Henderson last year and Adley Rutschman in 2022, and includes four prospects in the top 35 overall in the MLB ranking.

The Rubenstein-led group would be acquiring a top farm system, with those six players in the top 100 trailing only the Chicago Cubs' seven prospects among the top 100. However, given how highly ranked Baltimore’s prospects are, they lead MLB in ‘Prospect Points’ (100 for No. 1, 99 for No. 2, etc.). Their 444 ‘Prospect Points’ this year is even more than their 2023 equivalent at 398.

That compares to the Yankees with four prospects in MLB’s top 100, led by outfielder Jasson Domínguez at No. 41. In terms of ‘Prospect Points’, the Yankees' tally is 97. Baseball America, at least, is more impressed with the Yankees, ranking six in the top 100; ESPN agrees.

That future Orioles talent is in addition to an MLB roster already loaded with young players like 22-year-old Gunnar Henderson, the 2023 AL Rookie of the Year, as well as soon-to-be 26-year-old Adley Rutschman, who was runner-up in the 2022 AL RoY vote behind Seattle star Julio Rodríguez.

The talent stockpile is being used to upgrade their pitching staff. After losing veteran righty Kyle Gibson in free agency this offseason, the Orioles just acquired acquired 2021 NL Cy Young winner Corbin Burnes from the Brewers in exchange for 25-year-old lefty DL Hall, SS/3B prospect Joey Ortiz, who ranked No. 63 on the updated MLB Pipeline top 100, and a Competitive Balance Round A pick.

Like Juan Soto, he’s only a one-year rental and will likely test free agency after the upcoming season. But as Ben Clemens of FanGraphs notes, “Burnes is going to be one of the best players on the Orioles, because he’s one of the best players in baseball. Per our projections, he’s the fifth-best pitcher in the game right now… He’s entering his age-29 season, and over the past three years, he’s in the top five for innings pitched, strikeouts, WAR, RA9-WAR, FIP, SIERA – pretty much everything except ERA, where he’s seventh. The point is, he’s a rental, and he’s going to sign a huge deal after this season.“

Orioles Spell Trouble for the Yankees, AL East?

If this new ownership is able to invest in cost certainty for the next 10 years with long-term extensions for the core of a young team that won 101 games last year, and upgrade their facilities and fan experience to drive additional revenues, Baltimore could go on an Atlanta Braves-like run and rack up AL East titles and deep postseason runs.

In terms of other AL East rivals, it certainly spells big trouble for a Toronto Blue Jays franchise that - after failing to take charge of their pre-arbitration window - only has four notable players locked up through 2027 in José Berríos (who can opt out of his contract after 2026), Alek Manoah, Davis Schneider and Yariel Rodríguez. Their two most bankable stars, Bo Bichette and Vladimir Guerrero Jr., can walk in free agency after the 2025 season, not to mention the entire back end of their bullpen.

The Yankees are currently comparable with the Orioles based on average roster age, with young talent like Anthony Volpe, Austin Wells, Everson Pereira and Domínguez, but their luxury tax payroll for 2024 looks like it will be close to $300M again for a second consecutive year versus Baltimore’s projected $116M. The Yankees’ farm system is ranked bottom third by both FanGraphs and MLB Pipeline, with four top 100 prospects and 97 ‘Prospect Points’ versus 407 for Baltimore after trading away Joey Ortiz (though, again, Baseball America and ESPN would beg to differ).

That suggests that New York might have a harder time using prospects to acquire players via trade, while the payroll capacity limits free agent signings. The Yankees will likely have to add a year to Gerrit Cole's deal, canceling out his opt-out clause while putting another year of commitment onto their already bloated payroll.

In addition to trying to extend the newly acquired Burnes, Juan Soto, who will only be 25 this season, could be another free agent target of the Orioles' rich, new ownership if they want to solidify a lineup with another potential young MVP talent. He’ll make $31M in his final year of arbitration, but is likely due somewhere between Ohtani’s $700M riches and the 9-year, $360M Aaron Judge deal in free agency.

The Orioles are back

AL East owners like Hal Steinbrenner (Yankees), John Henry (Red Sox), Rogers (Blue Jays) and Stuart Sternberg (Rays) have a new member in their exclusive club, as well as one who appears to want to use his financial firepower to help return the Orioles to the glory days of his youth, when they won the 1966 and 1970 World Series with stars like Hall of Famers Frank Robinson, Brooks Robinson, Luis Aparicio and Jim Palmer. Rubenstein would have been 17 and 21 years old, respectively.

It looks like after years of skimping, the Rubenstein-led group won’t be afraid to play in the deep end of the pool. And after 101 wins last year, it won’t take much to keep this juggernaut rolling. As Buster Olney of ESPN writes, “The bar of leadership has been so low that all the new owners have to do to distinguish themselves is to sign just one of the organization's core youngsters to a long-term deal. If they manage to lock up Rutschman, Holliday and [Henderson] into the future, the good folks of Charm City might rename roads for the new owners, with Calvert Street giving way to Rubenstein Way.“

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