John Middleton of the Phillies and Jim Crane of the Astros built their fortunes in very different ways.
HOld court Sunday at Citizens Bank Park after his Philadelphia Phillies clinched a trip to the World Series, owner John Middleton showered thanks to great outfielder Bryce Harper, whose eighth home run was a near miss. the victory. “I think maybe I paid him enough,” said Middleton, who is paying the outfielder $330 million over 13 years.
Middleton, 67, should not be thanking Harper; it’s Major League Baseball. In any other season, the Phillies would be watching the playoffs between tee times instead of chasing a third World Series title. But during collective bargaining talks this year, the league pushed for an extended postseason, and the result was a 12-team field, up from eight the last time Philadelphia won the World Series, in 2008. The change allowed for the 2022 Phillies to sneak into the dance with 87 wins, the fewest of any playoff team this year. Compare that to the 106 regular season wins of the Phillies’ World Series opponents, the Houston Astros, owned by fellow billionaire Jim Crane.
MLB postseason expansion is all about money. ESPN, under its current television deal, has reportedly shelled out at least $65 million for additional playoff games, according to industry insiders. New deals from Apple and Peacock, worth a combined $115 million annually, have pushed the total value of MLB’s media rights past the $2 billion mark.
With the promise of other new revenues, such as jersey patch deals and continued growth in sponsorship sales, there has never been a better time to own a baseball team. MLB clubs are now worth a record $2.07 billion on average, up 9% from last year, according to Forbes estimates. The Phillies ($2.3 billion) and Astros ($1.98 billion) both rank in the top half of the league based on team value, eighth and 15th, respectively. Overall, MLB expects to surpass $10 billion in revenue for the 2022 season.
“It seems to me that the higher the valuations go, the more people are standing at the door” to buy teams, said Martin Conway, a professor at Georgetown University’s Sports Management Institute. “It’s almost like art, it just keeps increasing in value, regardless of what’s happening in the rest of the market.”
That is welcome news for the billionaire owners of the two franchises, who have much of their fortune tied to baseball. Middleton, who made his money reviving and later selling his family’s tobacco business, is worth an estimated $3.4 billion. Crane is self-made, having spun off his logistics business into sports ownership and amassed an estimated net worth of $1.6 billion.
A BILLIONAIRE IS SURE TO WIN
MLB teams continue to grow in value, adding to the fortunes of owners of World Series contenders.
Philadelphia Phillies: John Middleton
Middleton’s fortune dates back to the 19th century. In 1856, his great-great-grandfather established a small retail tobacco shop in Philadelphia. Around 100 years later, the business began manufacturing cigarettes, and launched the popular Black & Mild cigar brand in 1980.
Middleton joined the family business the summer he was 16 years old, back Philadelphia Magazine, and after college at Amherst and a Harvard MBA, his father fast-tracked to the company’s board (the other two members were his parents). Despite significant pushback from his father, Middleton led the acquisition of four tobacco brands from RJ Reynolds and built a profitable packet cigar business.
That opened the door for John and his baseball-obsessed father to join the Phillies ownership group in 1994. 15% of the club was picked up for $18 million, and John made it a point to be proactive in operations. the club.
After his father died suddenly in 1998, Middleton consolidated ownership of the family business, buying out his mother and sisters for a reported $200 million in 2003. That’s quite the deal, considering Middleton turned around and sold the business to Altria for $2.9 billion in 2007. His sister later sued him for more than $1 billion, claiming he misrepresented the company’s assets when she bought his share. The siblings settled in 2018 for $22 million, according to the Philadelphia Inquirer.
Since leaving the tobacco business, Middleton has only increased his investment in the Phillies. In the end he raised his stake to 48% and, after the then chairman David Montgomery fell ill, he took over the reins of the club. MLB blessed him as the team’s official managing partner in 2016. Today, Middleton owns the Phillies alongside the Buck family, investors who bought a piece of the team in 1981. Former Phillies general manager Pat Gillick and the Montgomery family, the former chairman of the team, owns smaller stakes.
Houston Astros: Jim Crane
Crane, 68, took a different route to success. He grew up a baseball nerd in St. Louis, sometimes caddies for Cardinals players at local golf clubs and parks cars for customers at the team’s stadium. He played for Central Missouri State University in the mid-1970s and still holds the school’s single-game hitting record with 18.
In 1984, after working in insurance and delivery jobs, the 30-year-old Crane borrowed $10,000 from his sister and founded what would become Eagle Global Logistics in Houston. Crane handled the details himself, and the business made money in its first month. More than two decades later, in 2007, he sold the company to Apollo Global Management in a leveraged buyout, pocketing more than $300 million. A year after that, Crane launched another logistics business called Crane Worldwide. It has an estimated $1.6 billion in gross annual revenue today.
It was around this time that Crane made his first attempt at MLB ownership. In a handshake deal, he agreed to buy the Astros in 2008, but backed out, angering then-owner Drayton McLane Jr. and Bud Selig, who was commissioner of baseball at the time, according to the New York Times. Crane would go on to make failed plays for the Chicago Cubs and the Texas Rangers.
His persistence was rewarded when, in 2011, he struck a deal to buy the Astros and a minority stake in a newly created regional sports network at a reported valuation of $680 million. (His Astros share is estimated at 40%.) Crane also received a $70 million discount on the deal by agreeing to the club’s eventual move to the American League. MLB vetoed Crane for months because of an Equal Employment Opportunity Commission investigation that accused Eagle Global of racial and gender discrimination in the 1990s and named him personally. (The company settled for $8.5 million, and $6 million was later returned when an arbitrator found that only 10% of claims were valid.)
The Astros were abysmal when Crane took over, trudging through back-to-back 100-loss seasons. The club was widely criticized for losing out on top draft picks, but if that was the team’s strategy, it paid off. By 2014, the Astros arguably had the best farm system in baseball, which would produce stars like Alex Bregman, Carlos Correa and George Springer. The Crane regime also pulled off marquee trades, including the acquisition of future Hall of Famer Justin Verlander in 2017. That season, the club won its first World Series.
The fairy tale ended in a nightmare. In 2019, The Athletics accused the Astros of using cameras and other technology to steal signals from opposing teams, giving them an unfair advantage. After interviewing 68 people, including 23 Astros players, and sifting through 76,000 emails, MLB found the cheating allegations to be true. The league suspended manager AJ Hinch and general manager Jeff Luhnow for one year, fined the Astros $5 million and stripped them of their first- and second-round draft picks in 2020 and 2021. Commissioner Rob Manfred fired the team’s owner , saying in a statement that “Jim Crane was not aware of any violation of MLB rules by his Club.” Crane fired Hinch and Luhnow.
“I think what the baseball world was looking for him to say was a lot more apologetic than he actually did,” Conway said. “But on the other side, the people in Houston seemed to see that as something positive, that they weren’t willing to abandon it and stop spending or doing the other things they were doing. The city of Houston and the fans have rallied behind them and maybe even rallied around them more as they feel alienated by almost everyone else in sports and in baseball and’ the media.”
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