Philadelphia Phillies managing partner and principal owner John Middleton signs autographs before the 2024 London Series game between the New York Mets and Philadelphia Phillies at London Stadium on Sunday, June 9, 2024 in London, England .
Daniel Shealy | Major League Baseball | Getty Images
The Philadelphia Phillies recently raised nearly $500 million from three new investors in a deal that combines the Major League Baseball team and its presence on regional sports network NBC Sports Philadelphia, according to two people familiar with the matter. A 25% stake would be valued at approximately $3 billion.
Two existing owners, managing partners John Middleton and Stanley Middleman, also put more money into the Phillies as part of the deal, according to people familiar with the deal. , bringing the total capital injection to nearly US$600 million.
November 1, Middleton announced New investors including Mitchell Morgan, Guntram Weissenberger Jr. will join the Phillies. The size of the investment and the third investor were not disclosed.
Since limited partners have no say in how the team is run, limited partner equity is typically about 20% lower than the controlling stake, so a $3 billion valuation is roughly equivalent to $3.7 billion for the controlling stake.
Considering the Baltimore Orioles were sold for $1.73 billion earlier this year, and the most expensive baseball team ever paid was the $2.42 billion Steve Cohen paid for the New York Mets in 2020, that’s is an impressive number.
A little more than a year ago, Middleman acquired 16.25% of the Phillies. The total valuation reaches US$2.8 billion.
Based on historical revenue, the Phillies’ control valuation of $3.7 billion would be 8 times 2023 revenue based on revenue multiples, compared with 5.3 times for the Orioles and 6.7 times for the Mets.
The Philadelphia Phillies celebrate during their 12-2 victory over the New York Mets at Citi Field on September 20, 2024 in New York City.
Dustin Satloff | Getty Images
The Phillies have one of the best television deals in local baseball. In 2014, the team signed an agreement with NBC Sports Philadelphia that guaranteed the team an average of $100 million per year in royalties over 25 years and a 25% stake in RSN.
However, cord-cutting has led to a more dire financial situation for regional sports networks, the most egregious example being Diamond Sports Group, which filed for Chapter 11 bankruptcy protection in March 2023. Pay-TV revenue is down, and some baseball teams may see less revenue.
The Phillies face less risk because Comcast owns 75% of RSN.
It’s unclear how the Phillies will use the proceeds from the raise, but there’s been speculation the team could pursue free agent Juan Soto.
Nabin Soto will earn between $50 million and $70 million per year, and he will likely bring a huge luxury tax hit to the team. According to statistics, the Phillies, led by superstar Bryce Harper, had a payroll of $262 million last season, ranking fourth in baseball. Kurt’s baseball contract. The team faces a $10 million luxury tax (formerly known as the competitive balance tax), According to Spotrac.
According to Cot, the Phillies’ payroll for the 2025 season is $240 million. MLB’s luxury tax cap is set at $241 million.
Prior to this financing, the Middleton family owned 48.75% of the Phillies, the Buck family owned 32.5%, and the Middleman family owned 16.25%, according to a person familiar with the Phillies ownership. Pat Gillick holds 1.5% and David Montgomery 1%, the person said.
It’s unclear what the exact ownership interest will be after the financing.
A spokesman for MLB did not respond to a request for comment. A spokesman for the Phillies declined to comment, as did a spokesman for Galatioto Sports Partners, the advisory firm representing the Phillies in financing.
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