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One of the best kept secrets in Philadelphia is the phantom group of people we loosely call the Phillies owners. The Phillies’ ownership group has remained more of a mystery in this town than Bigfoot or the Bermuda Triangle.
While winning the World Series in 2008 took a ton of heat off the Phillies owners, fans renewed their hatred for the faceless, nameless individuals who we never see or hear when the club dealt Cliff Lee for the likely reason of saving $9 million bucks. It is time now that we investigate these Phillies ghosts, who are quite skilled at remaining invisible. David Montgomery is here to speak for the owners that allowed so many years of horrid baseball before getting lucky in 2008, and to make sure that fans never, ever learn who they really are.
David Montgomery said recently that the Phillies owners are in the red and have been since they took over the team. HA! I guess we should all bow down and thank these wonderful people for selflessly throwing away their hard-earned money for our enjoyment. Right. Montgomery was not lying, but he was surely bending the truth as well as any politician out there. I bet they have been losing money… in their operating costs. But the team value is an entirely different story. Let’s put it this way: The original group bought the team in 1981 for $30 million. The 2008 Phillies were reportedly worth $481 million (and that’s before winning the World Series). That’s over a 1,600 percent increase in the value of the team…1,600 percent! Trust me, they are NOT LOSING MONEY.
Before revealing these Phillies Phantoms, let’s discuss how exactly they came to be the owners. In 1981 when Ruly Carpenter announced he was selling the team, Bill Giles assembled a group of investors to buy the Phillies. With only $50,000 of his own to spend, he needed a little help. He took a 10 percent share of the team, oversaw the day-to-day operations, and became the spokesperson of the group, allowing the others to hide in the shadows.
The Buck brothers invested $5 million. Widener family heir Fitz Dixon and horse-racing mogul Bob Levy combined for $3.5 million. John D. Betz from Betz Laboratories pledged $5 million. Taft Broadcasting took care of the rest, throwing in $15 million.
In 1986, Taft Broadcasting sold its 47 percent share to Bill Giles and crew for $24.1 million. Bob Levy and Fitz Dixon have also since cashed out. Bill Giles handed over his general partner position to David Montgomery in 1997, who also took a sliver of the company.
That leaves Claire Betz, the Buck Brothers, and John Middleton as the unnamed sources remaining. Let’s see what we can dig up, shall we? Let’s meet the cast:
Claire S. Betz
Claire S. Betz is approaching the age of 90 and shares time between her homes in Gwynedd, PA and Key Largo, Florida. Claire’s husband, John Drew Betz, bought his share of the Phillies in 1981 and she took over ownership amidst a nice little soap opera. See, her son, Peter Betz, was murdered by her 16-year-old grandson, Justin Betz, in 1988. Justin pleaded guilty to third-degree murder and John died of cancer at the age of 72 during the trial. That’s when she took over his share. The Inquirer’s Bill Conlin valued her stake at 33 percent of the team in a November 2007 article.
The Betz’ made their fortune through a family-owned water-purifying company called Betz Laboratories of which John Betz was the chairman. Betz Laboratories was later sold to General Electric. She and David Montgomery are also on the board of the Schuylkill Center, a local conservation group. When Claire passes away, the other partners will likely buy her shares.
The Buck Brothers
The Buck brothers: Alexander K. Buck, J. Mahlon Buck, Jr., and William C. Buck. Officially known as Tri-Play Associates, the three brothers are involved with T.D.H. Capital Corp., a venture capital firm based in Radnor, PA. The firm was started in 1977 and primarily invests in small businesses.
They also have been heavily involved in local charity, including gifts to the zoo, orchestra, and education. “The Bucks are very principled. Very, very gentlemanly. Very, very private,” says J.B. Doherty, general partner of TDH Capital.
John Middleton
John S. Middleton is in his mid-fifties and splits his time between Bryn Mawr and Stone Harbor. He is a 1977 graduate of Amherst College, and according to them, “Middleton heads his family’s business, which includes McIntosh Inns, Bradford Holdings, and Double Play, Inc.” He inherited his portion of the ownership from his father, Herbert H. Middleton. He is also on the Board of Trustees of Penn Medicine.
John was the closest thing to passionate out of the group. Rumor has it, Middleton was a big reason why the Phillies signed Jim Thome in 2002. He has been attributed as declaring, “I’ll pay for him myself!”
It was announced in November of 2007 that Middleton had sold his family cigar company to the Altria Group, owners of Phillip Morris, for $2.9 billion. Fans had a brief moment of hope that maybe, just maybe, we could have an ownership committed to winning. David Montgomery shut down those dreams instantly. In a statement, Montgomery said, “John Middleton is a limited partner with the Phillies and his personal and business interests have no impact on the operation of the ballclub.” That’s a pretty strong statement from the very mild mannered Montgomery. As you will soon learn, that is exactly what it means to be a limited partner, limited. But, if John Middleton could somehow grab a majority stake, he could have called the shots and told Montgomery to hit the road if he wanted.
Hard to say if Middleton even attempted to buy the team, but the program during a ceremony in 2004 at Amherst said, “Montgomery runs the show. He just reaffirmed that fact. The partners are supposed to stay out of the way, and these partners do. It is fairly well known that John S. Middleton has been an outlier on some issues – breaking loose the money to sign Jim Thome was thought to be one of them.”
David Montgomery
Bill Giles hired David Montgomery in 1971 to work in the Phillies’ ticket sales office and he later became Sales Director. When the current group bought the team, Giles appointed Montgomery as his top assistant in 1982. Quite possibly his most revealing quote was, “I just believe the organization needs an image that’s not directly tied to wins and losses.”
Bill Giles
Giles started with the Phillies as the vice president of business operations in 1969. He was the team vice president until 1982, team president from 1982 to 1987, and General Manager from 1984 to 1987. Giles decided to step down as general partner in 1997 and took the title of managing partner. He is the son of former National League president Warren Giles and the current honorary president of the National League.
Limited Partners
Before moving forward, it is helpful to know what it means to be a limited partner. Bill Conlin describes it in better detail in his article on the limited partnership, but here is the Cliff’s Notes version. Basically, the general partner (was Giles, now Montgomery) gathers the group, negotiates the sale of the team, is responsible for all debt and lawsuits, and gets a little extra coin in the form of a salary.
So, what does it mean to be a limited partner? It means they are limited to their cash investment and nothing else. Don’t like what is going on? Want to get rid of David Montgomery? Too bad. When they agreed to terms as limited partners, they gave all the power to the general partner.
As Conlin said regarding Montgomery, “Unless you can prove misfeasance and worse, it would be hard to dislodge him.” He says they probably also signed an agreement not to criticize the Phillies’ leadership publicly. Just like in the Marge Schott situation many years ago, if David Montgomery does not want to leave, he won’t. Simple as that.
Moving On
We should have no reason to hate any of the individuals running the team. We don’t know them, and they haven’t done anything illegal or unethical that we know of. In fact, they appear to be very principled and classy people.
However…
Buying a professional sports team is not just another investment where you can let your stock broker do all the work and call you every once in a while with an update. Especially when you ask the city and state for $260 million to help build your new ballpark, you have given up the right to be “fiercely private” as Middleton was described by Amherst.
We have a rare opportunity for greatness with the current team. We need to take advantage of the moment while we can, and our ownership group has shown us time and time again that they won’t do anything to help. We already missed the boat once by forcing Cliff Lee out. Let’s stop it right there and get them out of here.
Just imagine for a second how different things would be if someone like Pat Croce, Ed Rendell, or heck even Comcast-Spectacor was running the team….
Don’t hold your breath. We won’t get a new owner. Many have tried, and none have succeeded. The Bucks, the Betz’, and the Middletons will keep passing around their shares among themselves until the time that we are all ghosts, just like them.
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Source by E Scott Butler
