Behind the Business of Baseball with Phillies’ Owner John Middleton
The Wharton School welcomes all kinds of visitors from around the world to its Philadelphia campus — captains of industry, celebrities, and serial entrepreneurs. Sometimes, however, big names need only travel a few blocks to Locust Walk to impart their best business wisdom.
Such was the case recently when John Middleton, CEO and managing partner of the Philadelphia Phillies major league baseball team (and a super fan since the age of five), drove a few miles from Citizens Bank Park to sit down with Wharton’s Asuka Nakahara for a conversation during the Wharton Sports Business Summit.
Here are 6 strategic plays from Wharton’s inside baseball chat with Middleton:
1️⃣ World Series goals. “You either win the big trophy or you don’t,” said Middleton of the success metrics he cares most about as an owner. “There’s one winner and 29 losers. Nothing else matters. You just win.”
2️⃣ Outside rules don’t apply. “Every industry has technical knowledge, and you have to learn it and master it to be an effective CEO,” noted Middleton. “In baseball you have to know how to evaluate baseball players, how to develop baseball players, and how to manage baseball players. There’s nothing you do in the outside world to develop those skill sets. You can get buffaloed. You make a lot of mistakes. We just hire great general managers and are smart enough to let them do their jobs. But it’s hard to find that great GM… The product is a baseball team, and the raw ingredient are athletes who play baseball exceptionally well. If you really want to be in the business of baseball long-term, you have to get into that side of the field and learn something about it. You can’t be ignorant.”
3️⃣ A value proposition. When it comes to different revenue streams (like merchandise and ticket sales), “The more money you are bringing in, the more money you can spend, assuming you do it intelligently. You’re buying better players,” said Middleton. “What’s different about baseball than the other major sports is the degree to which our revenues are local revenues as opposed to national revenues… The disparity between the large-market and the small-market teams is significant. Putting aside the individual best interest of the team, for the future of baseball we need to move more money into the central baseball fund and have it distributed equally among the 30 teams. That’s the only way the small-market teams will be able to stay competitive long-term.”
4️⃣ The Niagara Falls of data. “As much information as you can get on baseball players is good,” said Middleton, noting that the Phillies were late to the party, not investing in data and analytics in any way until 2014. “You’re looking for congruency; agreement between the scouts and their eyes and the analytical people and their formulas, algorithms and conclusions. When you see that agreement, it’s good and when you see a disparity you need to explore the why.”
5️⃣ $750 million decisions. The Phillies recently sold stake in the organization to billionaires for future financial health. “In Covid, we lost a little over $200 million in two years. It started there,” said Middleton. “My desire to get my trophy back has caused me to spend a lot of money in payroll. We’re still losing money after Covid. We have a lot of work we want to do. [We have] laid out a vision for our Clearwater (Florida) training facilities and it’s a $350 million project. We have a lot of money to spend on Citizens Bank Park, like infrastructure upgrades and improvements. Fans enjoy games differently than they did 25 years ago. Frankly, our tab was three-quarters of a billion dollars. We needed to go to the outside and broaden our financial base and add some depth so we could do some of these things comfortably.”
6️⃣ A high-tech pitch. “The fastest growing expense category in Major League Baseball in the last five-plus years isn’t player payroll, it’s ancillary services, like the analytics department, equipment and cameras,” noted Middleton. “There’s a $1 million machine called a [Trajekt that uses data to mimic the way balls break from any big-league pitcher]. You can call up any single pitcher in baseball. A hole moves around this giant screen. Let’s say you want to hit against Zack Wheeler’s fast ball. A life-sized Zack Wheeler appears on the screen and the hole moves to a specific spot. He winds up and throws the ball and it hits that hole precisely and the ball comes out of the machine at exactly the spin rate and MPH of Zack Wheeler. We are on the cutting edge of all that stuff, finally. It took us years to get caught up. I don’t know how you could long-term be successful if you’re not riding the wave at that place.”
Conversation Starters
What are three key decisions that John Middleton has made to boost the business of the Philadelphia Phillies?
Are you interested in the business of sports? How are you pursuing this interest in high school? Share your story in the comment section of this article.
Do you have questions for Nate Y.? Post them here and he might just answer!
Hero Image Credit: Canva.com
Hi, my name is Drew Marturano, and I am planning to begin to pursue my interest in the business of sports in my upcoming sophomore year. I plan to pursue this interest by creating my club, “The Business of Sports” at school. I plan to bring in many guest speakers to teach us about certain areas of the business of sports, and how we can learn more about them and gain a deeper understanding of how a team runs financially. I will host and create Franchise Leagues in many different video games, such as Madden, NBA 2K, and FIFA, so that all members of my club can practice and learn more about the business of sports and running a professional team. These experiences will teach us about the intricacies, minute details, and small factors that go into every insanely difficult decision that an owner or team manager goes through daily, making us more aware of the difficulty of their job, but also the possibilities that we can create for ourselves, players, and fans.
Sounds amazing, Drew! You might like this story from our archives: https://globalyouth.wharton.upenn.edu/articles/sports-and-media/exploring-the-analytics-behind-better-sports-decisions/. And maybe your club might be interested in the annual data science competition we support at Wharton, which also has a sports analytics focus: https://globalyouth.wharton.upenn.edu/competitions/data-science/. We also have sports business programs if you want to go deep!
I my name is Kingston Shao, John Middleton has made three bold and forward-thinking decisions to boost the business and performance of the Phillies. Firstly, he pushed for a “World Series or nothing” mindset, which shows that he’s focused on results, not just participation. Second, he emphasized the importance of data and analytics, investing heavily in both even after the team had fallen behind the rest of the MLB. This investment now helps the Phillies make smarter decisions on players and performance. Third, he adopted cutting edge technology like the Trajekt machine to simulate real MLB pitchers, demonstrating his commitment to innovation and staying competitive. These three strategies show how Middleton treats the team like a modern business, not just a sports club.
I’m really interested in the business of sports because I love both strategy and athletics. As a high school student, I’m trying to learn more about the business side of the sports we all love by reading articles like this, studying how teams operate financially, and gaining a deeper understanding of what drives success behind the scenes in MLB franchises. I also plan on hosting club events at my school to teach people on the logistics of the sports we watch.
Hi, my name is Arjun Rajput and as a huge soccer fan, I’ve always been interested in how these teams make their trade decisions. When I look watch games and soccer news, I see huge teams dishing out 60, 70, 80, even sometimes 100 million dollars to buy some player I’ve never heard of. I never quite understood how they find these guys, but when the join the team, they score like 8 goals in the first 10 games. It’s always been crazy to me how teams find these players and know whether they’ll fit in with their setup.
To explore this interest, I’m gonna build an MLR machine learning model using some soccer stats APIs. Then I’ll try to find positions where my team needs better players, and find the best value ones. Maybe I’ll even reach out to them and propose these players as options to buy.
When I first saw this article about John Middleton and the Phillies, it didn’t grab my attention because it was published on my birthday. Instead, it resonated with me because his approach to managing complex organizational challenges mirrors what I experienced during our temple’s semester recital preparations.
It was Thursday evening, three days before our recital in the temple’s main hall. As one of the senior instructors, I was working with two others to run through our final rehearsal. The advanced students were solid, but our beginners kept missing their entries – completely blanking on when to catch the “sum” and start their transition rhythms. We had drilled this countless times in practice, but something about the pressure of the approaching performance was making them freeze at crucial moments.
The problem wasn’t that they didn’t know the rhythms. When we practiced in isolation, they could execute their transitions perfectly. But during full run-throughs, when they had to listen for the harmonic cues and count cycles while other instruments were playing, they’d hesitate for just a beat too long and miss their moment. Then they’d sit there lost, unable to jump back in until the next major section started.
It was particularly frustrating because these students had been coming to practice consistently. They understood the theory – they could explain when the sum fell, they knew their transition patterns, they’d even helped teach newer students the basics. But when it came time to trust their instincts and jump in confidently, they second-guessed themselves every time.
This reminded me of Middleton’s discussion about the gap between understanding something intellectually and being able to execute under pressure. Just like his organization needed people who could perform in high-stakes situations, our beginners needed to develop confidence in their musical judgment, not just technical knowledge.
The breakthrough came when we stopped treating missed entries as failures and started treating them as normal parts of learning. Instead of restarting pieces every time someone missed their sum, we taught the beginners how to find their way back in mid-performance. We practiced scenarios where they deliberately entered late and had to recover gracefully.
We also changed our counting approach. Rather than having them focus intensely on tracking every beat, we taught them to feel the overall flow and recognize the harmonic patterns that signaled their upcoming entries. Some of our advanced students shared how they’d learned to trust their intuitive sense of timing rather than overthinking the mathematics of it.
By Saturday’s recital, our beginners still weren’t perfect – a few still hesitated on some transitions. But they had developed the confidence to commit to their entries and the skills to recover when they missed. More importantly, they’d learned that musical performance requires a different kind of certainty than musical practice.
Working with our temple music program taught me what Middleton understood about his organization: technical knowledge and practical execution are two completely different skill sets. Sometimes the biggest challenge isn’t teaching people what to do, but helping them develop the confidence to do it when it matters most.
I anticipated a tale of wealth, statistics, and opulent boardrooms when I read about John Middleton using his business degree to acquire the Phillies. The extent to which it came down to people—connections, trust, and knowing what makes someone tick—surprised me. It brought to mind my own unplanned “networking” experience—with baseball cards.
Baseball cards, indeed.
I was ten when I stumbled upon a small store with a faded glass case filled with cards from decades ago. Most kids looked at collectibles; I looked at stories. Each card was somebody’s life, their triumphs, their tragedies. One day, I noticed a rare card in the corner. I couldn’t pay for it, but the owner—a grizzled old man with a crooked grin—offered me a deal: trade you your most evil card, and I’ll throw in a tip that can make you a collector to remember.
Something unexpected was sparked by that small exchange. I started interacting, exchanging cards, exchanging advice, and discovering the reasons behind the disappearance of some players and the rise of others to legend status. Before long, my friendships were about listening, understanding, and adding value to each other rather than just exchanging cards. By the time I left that store, I understood what Middleton already knew: recognizing others’ potential, establishing relationships based on trust, and forming deep connections are the keys to success in both life and sports.
I now see more than just runs and home runs when I watch a Phillies game. I see the invisible web of relationships—the owner who prioritizes connection over all else, the coaches who guide, and the teammates who support one another.
And I smile, remembering that even a dusty baseball card can teach lessons worth more than gold.