Major League Baseball – TheNewsHub

Philadelphia Phillies capital raise values the team at around $3 billion

suimt — Fri, 08 Nov 2024 19:48:31 +0000

Philadelphia Phillies managing partner and principal owner John Middleton signs autographs prior to the 2024 London Series game between the New York Mets and the Philadelphia Phillies at London Stadium in London on June 9, 2024.

Daniel Shirey | Major League Baseball | Getty Images

The Philadelphia Phillies recently raised close to $500 million in capital from three new investors in a transaction that values the Major League Baseball team and its 25% stake in regional sports network NBC Sports Philadelphia at about $3 billion, according to two people familiar with the deal.

As part of the transaction, two existing owners, managing partner John Middleton and Stanley Middleman, also invested more money in the Phillies, bringing the total capital infusion to close to $600 million, according to the people.

On Nov. 1, Middleton announced new investors, including Mitchell Morgan and Guntram Weissenberger Jr., would be joining the Phillies. The size of the investment and the third investor were not disclosed.

Given that limited-partner stakes typically go for about 20% less than control stakes because LPs have no say in how the team is run, the $3 billion valuation equates to roughly a $3.7 billion control valuation.

That is an impressive number considering the Baltimore Orioles were sold for $1.73 billion earlier this year and the most ever paid for a baseball team was the $2.42 billion that Steve Cohen paid for the New York Mets in 2020.

A little more than a year ago, Middleman purchased a 16.25% stake in the Phillies at a grossed up valuation of $2.8 billion.

Based on revenue multiples, a $3.7 billion control valuation for the Phillies would be eight times 2023 revenue, compared with multiples of 5.3 for the Orioles and 6.7 for the Mets, according to historic revenue calculations.

The Philadelphia Phillies celebrate after defeating the New York Mets 12-2 in a game at Citi Field in New York City on Sept. 20, 2024.

Dustin Satloff | Getty Images

The Phillies have one of the best local television deals in baseball. In 2014, the team inked a deal with NBC Sports Philadelphia that guaranteed the team an average of $100 million a year in rights fees over 25 years, plus a 25% stake in the regional sports network.

However, cord-cutting has resulted in tougher economics for regional sports networks, the most egregious example being Diamond Sports Group, which filed for Chapter 11 bankruptcy protection in March 2023. As pay-TV revenues fall, some baseball teams could see a reduction in their television revenue.

The Phillies’ exposure to that risk is lower, since Comcast owns 75% of the regional sports network.

It is not known what the Phillies will use the proceeds from the capital raise for, but there has been some speculation that the team could go after free agent Juan Soto.

Nabbing Soto, who could get between $50 million and $70 million a year, would likely land the team a huge luxury tax bill. Last season, the Phillies, who are led by superstar Bryce Harper, had a payroll of $262 million, the fourth-highest in baseball, according to Cot’s Baseball Contracts. The team is on the hook for a luxury tax, formerly known as the competitive balance tax, of $10 million, according to Spotrac.

The Phillies have a payroll of $240 million heading into the 2025 season, according to Cot’s. The MLB luxury tax limit is set at $241 million.

Prior to this capital raise, 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 team’s ownership. Pat Gillick owned 1.5%, and David Montgomery owned 1%, the person said.

It is not clear what the precise ownership interests are after the capital raise.

A spokesperson for MLB did not respond to CNBC’s request for comment. A spokesperson for the Phillies declined to comment, as did a spokesperson for Galatioto Sports Partners, the advisory firm that represented the Phillies on the capital raise.

Disclosure: Comcast owns NBCUniversal, the parent company of CNBC.

MLB playoff viewership surges as big market stars vie for World Series

suimt — Wed, 16 Oct 2024 19:59:16 +0000

Shohei Ohtani, #17 of the Los Angeles Dodgers, hits a two-run home run, his 50th of the season, becoming the first player with a 50/50 season in MLB history, during the seventh inning against the Miami Marlins at LoanDepot park in Miami on Sept. 19, 2024.

Megan Briggs | Getty Images Sport | Getty Images

Major League Baseball’s postseason has been knocking it out of the park.

The National League Championship Series’ first game between the New York Mets and Los Angeles Dodgers on Sunday averaged 8.26 million viewers across Fox Sports’ TV networks and streaming, making it the most-watched LCS game on any network since 2009, according to Fox Sports.

The first game of the American League Championship Series on Monday night between the New York Yankees and Cleveland Guardians saw an uptick of 4% from 2023, grossing 3.9 million viewers, according to a TNT Sports spokesperson.

Both series were competing for national attention during “Sunday Night Football” and “Monday Night Football,” where all three of New York’s National Football League teams were playing in the primetime slots.

The championship series gains come right after four successful league division series for MLB and its broadcast partners. The American League Division Series averaged three million viewers, a more than 20% increase from 2023, according to TNT Sports. Viewership for the National League Division Series rose, too, with game four in each series climbing from 2022.

Concerns have grown in recent years that MLB’s cultural relevance is falling, namely as younger generations perceived to have shorter attention spans age into key demographics for media companies. Highlights and clips have become go-to programming for sports broadcasters.

Last year’s World Series between the Texas Rangers and Arizona Diamondbacks also tracked the worst TV ratings in the championship series’ history, although some reportedly had attributed it to the fact that the teams did not have much national appeal.

The 2024 regular season was a success for MLB, as well. The league said it recorded increases in attendance, fan engagement, streaming and viewership, something it attributes to the shorter games —helped by a pitch clock introduced last season — and rule changes that have created more in-game action.

“The increased enthusiasm baseball fans of all ages have shown the last two seasons is evident in all of the ways we track fan engagement,” MLB Commissioner Rob Manfred said in a release. “Building off last year’s momentum, the 2024 season was memorable with historic performances, emerging young stars, a series of successful special events, and tight pennant races.”

Mr. Met poses before the game between the Chicago Cubs and the New York Mets at Citi Field on Sept. 14, 2022.

Rob Tringali | Major League Baseball | Getty Images

MLB has recently implemented several rule changes designed to increase action in games such as making the bases larger and restricting the shift. The league has also leaned in to its generational stars such as Shohei Ohtani and Aaron Judge, who are on the Dodgers and Yankees, respectively, and would face off in the World Series if each of their teams win their LCS.

“The two most storied franchises in Major League Baseball coming together and playing in the World Series, there couldn’t be anything better for baseball,” Eldridge Industries CEO Todd Boehly said Tuesday to CNBC’s Scott Wapner on “Halftime Report.” Boehly’s firm is an owner of the Dodgers, among other professional teams.

The two other remaining teams, the Mets and Guardians, have their own draws. The Mets turned around their season in June after a winning streak, which followed a McDonald’s mascot, Grimace, throwing out a first pitch at a game.

The Guardians righted their season after giving up their division lead to the Kansas City Royals at the end of August behind a hot September from their star Jose Ramirez.

The Yankees have a 2-0 game lead against the Guardians, and the Mets-Dodgers series is tied at 1-1.

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How "Tommy John surgery" changed our national pastime

Harsh — Sun, 13 Oct 2024 14:21:00 +0000

With a fastball clocked at 95 mph, Quincy Bright was on a track for the major leagues. He was just 13 when he was recruited by Mississippi State University. But at 17, the Connecticut high school star pitcher learned he had a torn ligament in his elbow. “I broke down in tears; I cried like a baby,” he said. “I love the game so much, so me not being able to play, it just really hurt me. I just felt like I was letting people down.”

Including his family, who had nurtured his talent. “He always rotated very quick,” said Omari Bright, “so every time he threw a ball, I was worried. So, I’d always try to limit what he was doing.”

Why did he think the injury occurred? “I think it happened when I was throwing too hard,” Quincy replied, “especially at a young age, and my body not being able to handle it.”

Like thousands of other athletes, Bright was thrown a lifeline called “Tommy John surgery.”

In 1974, Los Angeles Dodgers pitcher Tommy John was having a dream season, until he tore his ulnar collateral ligament, or UCL, the ligament that supports a pitcher’s arm while throwing. At the time it was a career-ending injury, that is until Frank Jobe, the Dodgers’ team physician, invented a procedure to fix John’s arm, changing baseball forever.

“I just said, ‘You do what you have to do to get me back playing baseball again,'” John recalled.

And how does it feel to have a surgery named after him? “Well, it’s better to have an orthopedic surgery than a proctological surgery!” John quipped.

At 17 high school baseball star and major league prospect Quincy Bright learned he had a torn UCL. A “Tommy John surgery” is getting him back in the game.

CBS News

Quincy Bright’s surgeon, Dr. Chris Ahmad, chief of sports medicine at New York Presbyterian/Columbia, is also head team physician for the New York Yankees. “What Tommy John surgery involves is taking tissue from your forearm, a tendon, and replacing a ligament in your elbow, tighten it up, secure it, and that recreates a brand-new ligament that replaces the injured ligament,” he said.

“Baseball is America’s pastime, and throwing hard is part of this pastime. And therefore, Tommy John surgery is now part of America’s pastime,” Ahmad said.

Among active MLB pitchers, an astonishing 35% have had the surgery, up from 27% in 2016.

Asked why these injuries keep occurring, Ahmad replied, “The harder you throw, the higher your velocity, the more force on your ligament. And every year fastball velocity increases.”

Today, the average major league fastball is 93.8 mph – a full 2 mph faster than it was 15 years ago. “And when that’s happening at the major league level, it’s also happening at the amateur level,” said Ahmad. “In addition, the volume of throwing’s going way up, meaning it used to be that you would play baseball during baseball season. Now you play year-round. It’s a time bomb and an explosion about to happen in the elbow.”

Those explosions keep Ahmad in scrubs. He said that 20 years ago he performed the procedure about 10 times a year. “This first half of the year, I’ve done 150 Tommy John surgeries,” he said, most of them on athletes under the age of 18.

Today, about 60% of Tommy John surgery recipients are under 19.

Baseball Hall of Famer, MLB commentator, and Tommy John surgery recipient John Smoltz is an advocate for a cultural shift. He calls the rise in pitcher injuries an “epidemic.”

“Don’t buy into thinking that this is normal for your 12-year-old, yet alone a 25-year-old,” Smoltz said. “We just act like, ‘No big deal, have a Tommy John.'”

But he does understand the pressure young athletes are under: “I also don’t blame them for chasing their reward system, because that’s how they’re getting paid. At some point, this industry will have to self-correct. And the way it self-corrects is by rule changes and philosophical changes.”

Smoltz thinks change could begin with Little Leagues discouraging uncontrolled pitching velocity, and encouraging kids to take seasonal breaks from baseball. Smoltz said, “When I see a young man just throwing everything he has at 13, he’s not giving himself the best chance to pitch in high school.”

Or, for that matter, the major leagues.

For better or worse, the legacy of 50 years of Tommy John surgeries means players like Quincy Bright have a chance of strong-arming themselves toward major league dreams.

Asked what would happened if he did not play in the majors, Bright laughed: “That’s not gonna happen! I will be in the major leagues.”

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Story produced by Amol Mhatre. Editor: Emanuele Secci.