Latest news with #DavidRubenstein
Yahoo
2 days ago
- Business
- Yahoo
Orioles' Miserable Year Has Front Office Fielding Tough Questions
BALTIMORE – Nobody in the Baltimore Orioles organization is happy about how the season opened in the second year of David Rubenstein's ownership. 'We just had an incredibly frustrating and disappointing start,' Mike Elias, the team's executive vice president and general manager of baseball operations, said in an interview this week. 'It was a Murphy's Law kind of start.' Advertisement More from Everything went wrong as the O's lost 32 of their first 47 games. Elias cited injuries, underperformance and players pressing for the face-plant that followed last year's 91-win season. 'You name it,' he said. 'It was all a contributing factor.' The perception by fans as the season began was that the Orioles didn't spend enough this offseason to improve the team. However their player payroll increased by $57.5 million. The issue? How they spent that money. Of top 25 free agents, Baltimore signed just one: outfielder Tyler O'Neill. And in an offseason where several high-profile starting pitchers were on the market—like Corbin Burnes, Max Fried, Blake Snell and Jack Flaherty—the O's filled their rotation holes with 41-year-old journeyman Charlie Morton and Japanese rookie Tomoyuki Sugano. Of their seven MLB signings, only O'Neill's deal was for more than one year. Advertisement 'Ownership made a lot of payroll investment this past winter,' said Elias. 'Unfortunately, the first few weeks it didn't bear fruit, but in their first offseason they showed a willingness to spend, and we were among the highest payroll escalations.' The team so far hasn't gotten much bang for its buck. Morton, the third-highest paid player on the team this season at $15 million, entered this week with a 6.05 ERA. O'Neill has been limited to two home runs across 24 games because of injury. Local fans have responded. Average attendance is down 4,908 to 23,606 a game at Camden Yards, which ranks 22nd in Major League Baseball. The still-beautiful ballpark opened in 1992, leading a revolution of similar baseball stadium construction throughout the U.S., but has never hosted a World Series game. That streak won't end this year, barring a miracle turnaround story. Advertisement Baltimore's dismal start cost incumbent manager Brandon Hyde his job in mid-May. Only two seasons earlier, the O's won 101 games and the American League East title, and Hyde was named AL Manager of the Year. He was replaced on an interim basis by third base coach Tony Mansolino, who had no MLB managing experience. Mansolino is 42, but looks and sounds much younger. There was a lot of nervousness when he took over that first day, he said. 'You prepare, deal with the nerves, but then you settle in,' Mansolino said. 'You try to do things the best you can … in the end it's just having confidence in yourself like the players.' The immediate results were predictable. The Orioles kept losing under Mansolino, hitting their season low of 15-32 on May 20. But what's happened since then has given Elias hope. They've started playing better and winning as key players such as Cedric Mullins and Jordan Westburg have returned from injuries. They are over .500 since that low water mark, including a three-game home sweep last weekend of the Los Angeles Angels. Advertisement Still, the same problems they met out of the gates have popped up and hindered momentum. Baltimore's pitching staff squandered an 8-0 lead to the Tampa Bay Rays on Wednesday night to lose, 12-8. 'We're playing more relaxed,' Elias said. 'We're a healthier team now. We've received some stabilization from our pitching staff. And most importantly our young core of hitters has been improving. We haven't quite dug out of the hole, but the team is very talented. Time is on our side a little bit.' But time is not really on their side this season, playing in one of the toughest divisions historically in MLB. Making the playoffs is going to be a steep uphill climb, and every multi-run collapse like Wednesday night's hammers morale. Everything for the Orioles the rest of the way is going to have to go right, while other AL teams have to fall apart. FanGraphs gives Baltimore a sub-5% chance of making the playoffs. Baseball-Reference has the team at a sub-1% chance. Advertisement 'I hope there is time,' Westburg said. 'I prefer to look at the positives. It's a long season and there's a lot of things that can change between now and then.' That doesn't seem likely with the Rays, New York Yankees, Toronto Blue Jays and Boston Red Sox above them by a solid distance in the division standings. As far as the three Wild Card berths, there are seven teams between the O's and the final spot. The roots of this year's problems go back to last season. The Orioles were 58-38 at the 2024 All-Star break and boasted what many considered the top farm system in baseball. But the team was widely believed to need to bolster its rotation at the trade deadline, and the club hung onto its top five prospects and dealt for Rays starter Zach Eflin and Marlins starter Trevor Rogers. The latter posted a 7.11 ERA in four starts for the O's before getting sent down to Triple-A. 'We accomplished our goals,' Elias said on MASN after the deadline. But the O's faded down the stretch, going .500 in the second half and giving up first place to the Yankees for good on Sept. 6. Their 91-71 record was 10 games worse than 2023, but good enough for second place in the AL East and a Wild-Card berth. They were knocked out by the Kansas City Royals in two games, scoring just one run. Advertisement Adding their sweep at the hands of the Texas Rangers in a 2023 AL Division Series, the Orioles haven't won a postseason game or series since 2014. Following its 2024 exit, Baltimore's ace, Burnes, departed for the desert, signing a six-year, $210 million deal with his top-choice Arizona Diamondbacks. Without Burnes this year, and with Grayson Rodriguez and Kyle Bradish on the shelf, the starting rotation is near the bottom of MLB with an ERA above 5.20. For his sake, Burnes just underwent Tommy John surgery on his right elbow and is likely out until the end of the 2026 season at best. Thus, the O's sidestepped that disaster. Now, with the clock ticking, the Orioles face another trade deadline decision. Of their young hitting core—Gunnar Henderson, Adley Rutschman, Jackson Holliday, Colton Cowser and Westburg—only Rutschman is earning more than $800K in 2025. Those bills will eventually become due through arbitration and/or potential extensions, so the franchise has more than just the upcoming second half to consider in its roster-building. Advertisement In the meantime, the Orioles' player payroll ranks 15th in MLB this year at $184.3 million, up from $126.8 million and a No. 26 ranking in 2024. Eight of the 15 AL teams spend less, but of course their AL East brethren in the Yanks, Jays and Red Sox don't. Only Tampa Bay is way below them with a $101.5 million payroll, but Kevin Cash's group is well above Baltimore in the standings and prevented the Orioles from gaining ground in this week's four-game series. 'If you're a middle-market team in baseball, just throwing money at your payroll over and over is not a particularly sustainable model,' Elias said. 'You have to blend that in with good scouting and player development.' As far as being a mid-market team, the Orioles are valued by Sportico at $1.82 billion with a 2024 revenue of $339 million, 18th in MLB. They must compete with the Yankees, who lead the sport in value at $8.39 billion, and are second in revenue at $799 million. Rubenstein, who per Forbes has a net worth of $3.8 billion, and his group paid $1.725 million to buy the O's from the Angelos family in March 2024. But there is a bright side. Advertisement The Orioles have a jewel of a ballpark in Camden Yards, which is about to undergo up to $600 million in improvements courtesy of state funds, including this offseason new outfield video boards, a ribbon advertising board circling the stadium and a new press box to replace the old one behind home plate—which to the chagrin of many writers is being converted into a luxury suite. The club's office space in the classic warehouse beyond the right field fence is also being renovated. And that's just a start, as the entire facility is under evaluation. It all needs work, Catie Griggs, the club's president of business operations, said in a dugout interview. 'The ballpark is iconic. It's amazing,' she said. 'It's also largely untouched since it was built in 1992, which in some respects is fantastic, but in other places it's starting to show its age.' This offseason as well, the owners are spending $27 million of their own funds to upgrade the player facilities at their Sarasota spring training complex in Florida, much like the $30 million of work the Yankees just completed this year at Steinbrenner Field in Tampa. Advertisement Unlike the Yankees, Red Sox and Blue Jays, the Orioles neither own nor operate their own ballpark, nor do they pay rent to the Maryland Stadium Authority to play there. They have recently signed a lease that commits them to the facility for the next 30 years. They are a mainstay in the Baltimore area with a huge government subsidy from the state. Elias says ownership has indicated there is 'payroll flexibility,' moving forward. The Orioles may not have the revenue of big-market teams, but they don't have the expenses, either. To keep up with the Yankees and Red Sox, they must develop a symbiosis between business and baseball operations under the new ownership. Advertisement 'I mean, that's the name of the game,' Elias said. 'I wish I could answer that simply. There's an unevenness between franchises and market sizes in MLB that's unique relative to other major league sports. Each franchise has to figure out the right formula.' This season's formula has not been right at all. The Orioles say they're working on it. Best of Sign up for Sportico's Newsletter. For the latest news, follow us on Facebook, Twitter, and Instagram.
CNBC
06-06-2025
- Business
- CNBC
Peak private equity? Sector gets defensive about its ability to generate top returns
BERLIN — Private equity's biggest annual gathering is called SuperReturn, but its returns haven't been looking quite so super of late — leading the industry to urge investors to ride out the uncertainty. At this year's conference in Berlin, Germany there was a clear acceptance that a previously forecast 2025 boom in M&A and initial public offering activity has not materialized. And that is putting private equity — which ballooned following the Great Financial Crisis as an alternative funding source to risk-averse banks, now rivaling many of them for size — under pressure. But panels and sideline discussions at the event showed plenty of fighting spirit, with some attendees defending against the narrative that dealmaking is drying up or that the public markets might be a better bet for returns. Many enthused about growth areas ripe for private equity backing, including European defense firms, undervalued mid-caps and Middle Eastern data centers. The event at the Intercontinental Hotel hosted nearly 6,000 attendees this week, with headline keynotes from Carlyle Group Co-chairman David Rubenstein and Blackstone Vice Chair Thomas Nides. Tennis superstar Serena Williams and U2 frontman Bono were also among the speakers. "There is no doubt exits have slowed due to headwinds from geopolitical tension and volatility in public markets. As a result, we have seen companies stay private for longer," said Nalin Patel, lead private capital research analyst at PitchBook. An "exit" refers to when a private equity fund exits its investment in a firm, be it through a sale, IPO or process called a dividend recapitalization. Pitchbook data for the first three months of 2025 showed exit values in Europe dropped 19% quarter-on-quarter, as exit count fell 25.2%. The industry is, meanwhile, holding nearly 30,000 unsold companies worth about $3.6 trillion, according to a March report from Bain. That means limited partners (LPs) — investors in funds — can't realize returns or access cash, while general partners (GPs) — the managers of funds — are spread more thinly across their portfolio companies. U.S. tariffs were repeatedly cited at SuperReturn as having reduced overall market risk appetite, coming just as the industry had been betting on some respite after being rocked by the Covid-19 pandemic, supply chain disruption and higher interest rates. Yann Robard, managing partner at alternative asset manager Dawson Partners, told a packed crowd that private markets are going through a cyclical dip, but that "on average and over the long term, our analysis suggests that private equity outperforms public markets." Assessing data since the start of 2000, Robard said a $1 investment in a Russell 3000 index would have generated a 6.6 times return versus a 19.9 times return in private equity. He added that the sector has better weathered volatility despite its higher leverage — illustrated by a flood of private capital, which has tripled in the last decade from $5 trillion to $17 trillion. Private equity's surge was supported by more than a decade of ultra-low interest rates, with dealmaking hitting a peak in 2021 as low rates met a Covid rebound and fiscal support packages. A core issue hanging over buyout firms now is that many "just paid too much" during that period, said John Romeo, managing partner at management consultancy Oliver Wyman, on the sidelines of the event. "It may have been for good companies, but they just paid too much, so they're not going to make the target returns on those, and that's blocked up the system a little bit. At some point that has to pass," Romeo told CNBC. "I'm still very bullish on private equity." "If I compare how well prepared a private equity firm is in their monthly board meeting with a company, they know the ins and outs of that perfectly, compared to a public market investor who just doesn't have the same level of information or levers to control." Recent years have seen new trends in the private equity world: the rise of continuation vehicles, in which firms essentially dispose of stakes in their companies to new funds they've created; Net Asset Value (NAV) lending, where loans are made against a portfolio's underlying value; and secondaries, in which existing interests or assets are bought from primary private equity investors as a way for LPs to access cash. "The secondary market is hot, it's on fire," said Richard Hope, head of EMEA and global co-head of investments at Hamilton Lane. While it may have arisen as a way to overcome challenges in the industry, Hope said: "Those investing into the secondary market really like it. It's short-duration, it gives you nearer-term liquidity, and it actually gives you an enhanced return. Some investors are looking at in a positive way and want to add it to their portfolio." There has been a push toward getting retail investors involved in the space — traditionally the preserve of large institutional investors — including via an exchange-traded fund launched by State Street and Apollo Global Management in March. Family office representatives were also a notable presence on the ground at SuperReturn. Consolidation has been another consequence of the changing environment, which Rob Lucas, CEO of CVC Capital Partners, expects to continue. He agreed the market sees stronger and weaker cycles, and was currently in the latter, but stressed that making the right investments during periods of volatility generates the strongest returns. "What our LPs are looking for from us is more demanding, in returns, governance, compliance, sustainability, AI. All of these areas are hugely intensive and require depth and strength of platforms," he said during a panel. "Groups coming together is a natural part of that," he said, adding that private equity was still a "super strong asset class" with tailwinds supporting it.o One common refrain at SuperReturn in support of the outlook was the huge amount of "dry powder" — liquid assets — still available for many of the biggest names in the industry to deploy, estimated at over $1 trillion. Despite making the defense case for private equity's future, SuperReturn attendees agreed that huge uncertainty remained regarding the macro environment, not least with the U.S. trade issue far from resolved. A lot is resting on the expectation that fingers are poised on buttons, ready to set deals in motion as soon as some stability returns. Oliver Wyman's Romeo said that private equity has expanded into highly diversified financial institutions but will thrive by focusing on its bread-and-butter roots — finding companies at attractive prices and being laser-focused on improving profitability. "Firms have never had, really, this much money... The entry price that you go in at really matters, but then you've also got to have a real clear plan how you're going to drive that value creation," he added.
Bloomberg
29-05-2025
- Business
- Bloomberg
The David Rubenstein Show: Rep. Jason Smith
Jason Smith, Chairman of the House Ways and Means Committee - the oldest committee in the US Congress - joins David Rubenstein to discuss the tax bill his team has been working on. He outlines the bill's key provisions and the challenges of moving it through both the House and Senate. He spoke in an episode of The David Rubenstein Show: Peer to Peer Conversations recorded May 15 at the Economic Club of Washington DC. (Source: Bloomberg)
Yahoo
22-05-2025
- Business
- Yahoo
SSGA's Hung on Tariff Impact to the US Economy
State Street Global Advisors President and CEO Yie-Hsin Hung says she believes the recent tariff increases will likely have a negative impact on US economic growth and inflation. SSGA is one of the world's largest asset managers with nearly $5 trillion in assets under management. Hung speaks with David Rubenstein for an episode of Bloomberg Wealth. This interview was recorded April 3 in New York.
Bloomberg
21-05-2025
- Business
- Bloomberg
Bloomberg Wealth: Yie-Hsin Hung
Bloomberg Wealth with David Rubenstein Yie-Hsin Hung is the President and CEO of State Street Global Advisors, the world's fourth-largest asset manager, overseeing nearly $5 trillion in assets. She sits down with David Rubenstein for an episode of Bloomberg Wealth to discuss SSGA's call for the Fed to cut interest rates three times in the second half of the year to support a slowing economy, as well as the impact of tariffs and a weakening US dollar. This interview was recorded April 3 in New York. (Source: Bloomberg)
