The Philadelphia Phillies recently secured close to $500 million from three new investors, in a deal that values the Major League Baseball team and its 25% stake in NBC Sports Philadelphia at about $3 billion. Additionally, existing owners, managing partner John Middleton and Stanley Middleman, contributed more funds, bringing the total capital raise to nearly $600 million, according to sources familiar with the matter.
On November 1, Middleton introduced new investors, including Mitchell Morgan and Guntram Weissenberger Jr., but did not disclose the size of their investments or the third investor’s identity. Limited-partner stakes typically sell at a 20% discount compared to control stakes, making the Phillies’ $3 billion valuation equivalent to a $3.7 billion control valuation. This figure stands out, as the Baltimore Orioles were sold for $1.73 billion earlier this year, and the record price for an MLB team was $2.42 billion, paid for the New York Mets in 2020.
The valuation suggests a revenue multiple of eight times the Phillies’ 2023 revenue, higher than the 5.3 multiple for the Orioles and 6.7 for the Mets. A key factor in the Phillies’ strong valuation is their lucrative local TV deal. In 2014, the Phillies signed a 25-year agreement with NBC Sports Philadelphia, guaranteeing an average of $100 million annually in rights fees and securing a 25% stake in the regional sports network.
Despite the growing trend of cord-cutting, which has impacted regional sports networks, the Phillies are less vulnerable due to Comcast’s 75% ownership of NBC Sports Philadelphia. For instance, Diamond Sports Group filed for Chapter 11 bankruptcy in March 2023, highlighting the financial challenges in the industry.
It is unclear how the Phillies will use the new capital, but there is speculation that they may pursue free agent Juan Soto. Acquiring Soto, who could demand a salary between $50 million and $70 million per year, would push the team into luxury tax territory. The Phillies had a payroll of $262 million last season, the fourth-highest in MLB, and were subject to a $10 million luxury tax. The team’s payroll for 2025 stands at $240 million, just below the $241 million luxury tax threshold.
Before the capital raise, the Middleton family held a 48.75% stake in the Phillies, the Buck family owned 32.5%, and the Middleman family had 16.25%. It remains unclear how ownership interests have shifted following the new investment.
Representatives for MLB, the Phillies, and Galatioto Sports Partners, which advised on the deal, declined to comment.
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