Billionaire fund manager Bill Ackman reported Thursday that his company, Pershing Square Capital Management, has a 38% equity stake in Seaport Entertainment, owner of the Oakland A’s Triple-A affiliate and various real estate in Nevada and New York.
Seaport Entertainment became a publicly traded business after being spun-off from Howard Hughes Corp. in August. Seaport, traded on the NYSE American, a small cap stock exchange, completed a fund raise Monday by selling seven million rights at $25 each to buy its stock. Each right can convert to about 1.27 shares of common stock. Ackman acquired his stake in original Seaport from amassing a stake in Howard Hughes, and then received a proportional distribution of the rights at no cost, according to a regulatory filing.
The Triple-A Las Vegas Aviators are minor league baseball’s high grossing club, according to Seaport, which says in 2023 it generated $33.4 million from the team and ownership of its stadium, including $9 million in baseball ticket sales. The A’s, who wrap up a 57-year stay in Oakland on Thursday, will play in Sacramento next year and plan to move to Las Vegas by 2029. Aviators management has told local press they anticipate remaining in the city, where the club has operated for more than 40 years.
The Aviators represent a significant chunk of Seaport Entertainment’s $116 million 2023 revenue. Seaport also owns Manhattan’s Seaport, long known as South Street Seaport. ESPN has a production facility at the Seaport’s Pier 17, though its lease expires in 2025 and the company reportedly will move to a different Manhattan property at that time. Nike is also a tenant at the Pier 17 property.
Seaport also owns 25% of Jean-Georges Restaurants, the anchor tenant of the Seaport’s Tin Building and the holding company of the culinary empire of chef Jean-Georges Vongerichten. In addition to the Aviators’ ballpark in Summerlin, the western most neighborhood of metro Las Vegas, Seaport owns 80% of the air rights over the Las Vegas Fashion Show mall, located near the Sphere and Wynn casino properties.
In the offering document for the recent share rights sale, Seaport acknowledged MLB has large sway over its baseball operations, including the fact that the Aviators’ license with MLB Professional Development Leagues, the governing body of affiliated minor league baseball, expires after the 2030 season. The agreement with MLB also keeps Ackman from controlling more than half of Seaport’s stock—under the team’s deal, any party owning a majority of Seaport’s shares must put the shares in excess of 50% of the total into a trust, or the owner must get approval from MLB. For example, an owner with 55% of the team’s shares would need to put 5% into a trust, or get MLB’s sign-off. Ackman has agreed to backstop the Seaport Entertainment rights offering, meaning Pershing Square will buy any unsold rights. That could mean the billionaire could control more than 70% of company equity. The ownership limitation could be one reason for the spin-off of Seaport in the first place: Ackman is reportedly interested in acquiring all of Howard Hughes Corp., which primarily develops residential communities in the western U.S.
Seaport also was an underperforming arm of its former parent. In 2023 the company tallied an $838 million net loss, mostly from an impairment charge Hughes put on the business in light of continuing poor performance before being spun off. Seaport Entertainment shares traded around $27 early on Thursday, giving the business a market capitalization of $148 million.
(This has been updated in the sixth paragraph to clarify MLB rules on ownership.)
