John Middleton of the Phillies and Jim Crane of the Astros built their fortunes in very different ways.
Holding court Sunday on the infield of Citizens Bank Park after his Philadelphia Phillies had clinched a trip to the World Series, owner John Middleton gushed with gratitude for superstar outfielder Bryce Harper, whose eighth-inning home run was the margin of victory. “I’m thinking that maybe I underpaid him,” said Middleton, who is paying the outfielder $330 million over 13 years.
It’s not Harper that Middleton, 67, should be thanking; 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 negotiations this year, the league pushed for an expanded postseason, and the result was a 12-team field, up from eight teams the last time Philadelphia won the World Series, in 2008. The change allowed the 2022 Phillies to sneak into the dance with a measly 87 wins, the fewest of any playoff team this year. Compare that with the 106 regular-season wins of the Houston Astros, the Phillies’ World Series opponents, owned by fellow billionaire Jim Crane.
Expansion of MLB’s postseason is all about the money. ESPN, under its existing TV agreement, reportedly shelled out at least $65 million for additional playoff games, according to industry insiders. New deals from Apple and Peacock, worth a collective $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’s 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. Both the Phillies ($2.3 billion) and the Astros ($1.98 billion) rank in the top half of the league based on team value, at eighth and 15th, respectively. As a whole, 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 line up at the door” to buy teams, says Martin Conway, a professor at the Georgetown University Sports Management Institute. “It’s almost like art, just continuing to increase in value, regardless of what’s happening in the rest of the marketplace.”
That’s welcome news for both franchises’ billionaire owners, who have much of their fortunes tied up in baseball. Middleton, who made his money revitalizing and later selling his family’s tobacco business, is worth an estimated $3.4 billion. Crane is self-made, having parlayed his logistics business into sports ownership and accumulated an estimated $1.6 billion net worth.
A BILLIONAIRE IS SURE TO WIN
MLB teams keep growing in value, adding to the fortunes of the owners of the World Series contenders.
Philadelphia Phillies: John Middleton
Middleton’s fortune dates back to the 19th century. In 1856, his great-great-grandfather founded a small retail tobacco shop in Philadelphia. Roughly 100 years later, the business began manufacturing cigarettes, and it launched the popular Black & Mild cigar brand in 1980.
Middleton joined the family business the summer he turned 16, according to Philadelphia Magazine, and after college at Amherst and a Harvard MBA, his father fast-tracked him to the company’s board (the other two members were his parents). Despite considerable pushback from his father, Middleton led the acquisition of four tobacco brands from R.J. Reynolds and built a profitable packaged-cigar business.
That opened the door for John and his father, both obsessed with baseball, to join the Phillies ownership group in 1994. They picked up 15% of the club for $18 million, and John made a point to be proactive in the club’s operations.
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. It was 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, alleging that he misrepresented the company’s assets when he bought her share. The siblings settled in 2018 for $22 million, according to the Philadelphia Inquirer.
Since exiting the tobacco business, Middleton has only increased his investment in the Phillies. He eventually raised his stake to 48% and, after then-chairman David Montgomery became ill, took the reins of the club. MLB blessed him as the team’s official controlling partner in 2016. Today, Middleton owns the Phillies alongside the Buck family, investors who bought a piece of the team in 1981. The Phillies’ former general manager Pat Gillick and the family of Montgomery, the former team chairman, own smaller stakes.
Houston Astros: Jim Crane
Crane, 68, took a different path to success. He grew up as a baseball-crazed kid in St. Louis, sometimes caddying for Cardinals players at local golf clubs and parking cars for customers at the team’s stadium. He pitched for Central Missouri State University in the mid-1970s and still holds the school’s single-game strikeouts record with 18.
In 1984, after working jobs in the insurance and freight-forwarding businesses, a 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 boasts 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 he backed out, angering then-owner Drayton McLane Jr. and Bud Selig, who was baseball’s commissioner at the time, according to the New York Times. Crane would go on to make unsuccessful 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 stake is an estimated 40%.) Crane also received a $70 million discount on the agreement by consenting to the club’s eventual move to the American League. MLB vetted Crane for months because of an investigation by the Equal Employment Opportunity Commission that accused Eagle Global of racial and sex discrimination in the 1990s that named him personally. (The company settled for $8.5 million, and $6 million was later returned when an arbitrator found only 10% of claims were valid.)
The Astros were abysmal when Crane officially took control, slogging through back-to-back seasons of more than 100 losses. The club was widely criticized for losing in order to amass top draft choices, but if that was the team’s strategy, it paid off. By 2014, the Astros had arguably the best farm system in baseball, which would yield stars like Alex Bregman, Carlos Correa and George Springer. Crane’s 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 turnaround ended in a nightmare. In 2019, The Athletic accused the Astros of using cameras and other technology to steal signs 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 A.J. Hinch and general manager Jeff Luhnow for a year, fined the Astros $5 million and took away their first- and second-round draft picks in 2020 and 2021. Commissioner Rob Manfred absolved the team owner, saying in a statement that “Jim Crane was unaware of any of the violations 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 says. “But on the flip side, the folks in Houston seemed to see that as a positive, that he was not willing to back down and stop spending or doing the other things that they were doing. The city of Houston and the fans have stuck behind them and maybe even rallied more around them as they felt ostracized by virtually everybody else in sports and in baseball and the media.”
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