New Member of Phillies ownership group

[andyb]

Article seems like they wanted a little more cash flow before they do their Clearwater complex upgrade and later do some more CBP upgrades. In Middleton's shoes it might also be nice to spread the risk around for a few years when the RSN revenue drops. The Phillies' profit sharing probably means they are clearing a bit less in rights fees now. The future of the NBC sports channels is also uncertain. In DC the owner of the Wizards and Caps bought the channel and the rights back. Assume the Phillies will probably do something similar to get their rights back if the fees keep going down.

All is good when you draw 3 million fans. The future is probably murkier.

The Phillies sold 16% of the team: What it means for owner John Middleton, the...

[Purduke]

Sale puts the franchise value at $2.46B; Forbes estimated $2.58B in March. Not a bad estimate considering we have had a 500 bp jump in rates the last year and are coming off double digit inflation. Guess it helps that Phils have another 15 years or so on the TV deal.

[fish]

It is just the Buck family that is getting paid from selling shares, right? The reading between the lines makes it sound as if the Phillies as an ownership group sold some equity to bring in cash.

Or is the expectation that the new partner is going to bring in more cash after the purchase price?

[julio]

It is just the Buck family that is getting paid from selling shares, right? The reading between the lines makes it sound as if the Phillies as an ownership group sold some equity to bring in cash.

Or is the expectation that the new partner is going to bring in more cash after the purchase price?

Obviously, I don't know, but my impression is that the Buck family (Tri-Play) sold one-third of their stake to Stan Middleman. Some indication that one of the Buck cousins (second generation now) just had no interest, and wanted the funds for other purposes.

The reported amount of the sale is generally consistent with the reported transfer of 16% of the franchise (implies a similar valuation to that estimated by Forbes), so the sale itself doesn't seem to be injecting any additional cash - it's not selling additional shares or diluting the equity of existing shareholders (except Tri-Play, which is selling shares).

The normal procedure, if at some point the club needs a cash infusion (to fund Clearwater expansion or CBP improvements) would be to have a cash call from the partners. I wouldn't think any of the major partners would have an issue with that (Middleton, Bucks, Middleman), although a Buck cousin who wanted out altogether would probably not be interested in ponying up -- and if such cash calls are anticipated, that may have been a contributing factor in the desire to sell.

We don't know, at least at this point, whether Tri-Play (the Buck family org that actually holds the shares) will be restructured to write out that cousin or not. Rename it as Bi-Play?

[Aquapong]

Rich people problems.

[zambonir]

It seems pretty clear that Bill Buck's daughters were just never going to be involved and planned to sell - or their father did himself, but it was not able to be completed before his death. Though I actually think Jim and Pete Buck had already bought out their uncle/cousin's share, at no point has there been any suggestion of anyone other than the two of them (as Tri-Play) and Middleton being in the mix. That being the case they must have decided they couldn't personally keep pace with Middleton and the team's goals owning the percentage they did.

While it all seems kind of like fake money in the end (i.e. the Phillies may well be able to claim they still aren't running at an annual profit giving both the pandemic and the increased payroll) it does make sense that in that context, the owners will have to come up with money to pay for some of these future costs. Or at least, they'll be borrowing it, and then paying the interest.

Yeah, rich people problems, but back when Giles had more power/shares, part of the problem was he wasn't actually rich (and some of the other rich people, like Betz, didn't have any passion for the game that would prompt them to spend).

[Philsmania]

I would be very interested to see a composite story of the evolution of the Phillies ownership. Like I said earlier, it's still legally the same entity owning the franchise but it has had 100% turnover in its membership which is interesting considering that the Phillies ownership is not a family ownership in which one owner dies and his/her heirs take over. Only the current Bucks acquired their shares through inheritance. All of the other shares dating back to 1981 changed hands for money at some point. Bill Giles, Taft Broadcasting, Fitz Dixon, Rochelle Levy and the Betzes or their respective estates all divested at some point.

The closest thing I could find is this SABR write-up by Rich Westcott.

https://sabr.org/bioproj/topic/philadelphia-phillies-team-ownership-history/

[zambonir]

This is the only story that ever really laid it out. After this, things got pretty simple though, basically everyone who sold their shares (just Levy and the Betzes I think?) sold them to Middleton and Triple Play (with Triple Play presumably only buying whatever they had to do keep Middleton in compliance with the no majority rule). Monty's family kept his, we now know, and Gillick's 1.5% was presumably given to him by Middleton and Triple Play (though it could have come indirectly from one of the other owners, most likely Giles, at the same time the rest of his remaining share was going to them).

Philadelphia Phillies Owners: The Phantom Five - Philadelphia Magazine

[Philsmania]

I only made it through four pages of the article before hitting the paywall.

IIRC, Taft Broadcasting was not long for the ownership and divested within ten years. I wonder if Herb Middleton who passed his shares to John Middleton bought that entity's shares. Taft Broadasting no longer exists but its DNA is present in Clear Channel Communications and IHeart Radio, per Wikipedia.

Dixon and Levy disappeared from the ownership at some point without fanfare.

[zambonir]

Article (past your paywall point, terrible layout on those old pieces) says Herb Middleton bought from Levy actually.

At the time of the story John Middleton refused to talk and sources denied that he was interested in increasing his share. It also mentions that the terms of the partnership are that all the existing partners get first/equal crack at buying anyone else out, which is obviously what happened to a point.

I think Giles himself may have actually managed to pick up some of the Taft/Dixon shares, along with, presumably, the Bucks and Betzes.

lol:

If Middleton somehow claimed a majority stake, he could do more than fume over blown saves and his co-owners’ timid caution — he could tell Montgomery what to do, or fire him. But that’s not how the business of the Phillies is built. For all

[schillingfan]

IIRC Giles put the ownership together as a civic service, sort of like funding a hospital wing. He sold to main line rich people as doing good for the community. They weren’t baseball fans, like John Middleton.

As a consequence, Giles always ran the team not to win. But more like a Disneyworld, a family experience, charity work the community, and don’t lose money for the owners. Middleton’s vision sees winning as a community service, too.