Jim Crane is a champion once again. After a historic World Series that featured a no-hitter and what was believed to be the largest legal sports betting payout in history, the billionaire owner of the Houston Astros collected his second championship on Saturday as his club secured a 4-1 Game 6 victory over the Philadelphia Phillies. For the Astros, it marks the latest entry in an arc that saw the club go from the darlings of baseball, since defeating the Los Angeles Dodgers in 2017, to the sport’s biggest villains following a protracted cheating scandal outed in 2019.
Controversy aside, the Astros have been a prudent investment for Crane. The self-made billionaire bought the club and a minority stake in a newly created regional sports network for $680 million in 2011. Crane later got the price down $70 million by agreeing to move the Astros to the American League.
The team itself is now valued at $1. 98 billion, more than quadruple what it was at the time of the deal and now 15th in MLB. Baseball as a business continues to boom.
The average MLB club is worth $2. 07 billion, a 9% increase from a year ago . Commissioner Rob Manfred said league revenues are expected to be just shy of $11 billion, back to what they were pre-pandemic.
Crane’s estimated 40% stake in the Astros today amounts to roughly 40% of his $1. 6 billion fortune. “I think he has built [the Astros] in his image,” says Martin Conway, a professor at the Georgetown University Sports Management Institute.
“Which is as a sort of ruthless entrepreneur, win-at-all-costs business person. ” While baseball has always been a central component to Crane’s life—as a kid he caddied for St. Louis Cardinals players and parked cars at the team’s stadium, and later became a successful college pitcher at Central Missouri State University—his path to billionaire status started in another industry.
In 1984, after working jobs in insurance and freight-forwarding, a 30-year-old Crane took a $10,000 loan from his sister to start what would become Eagle Global Logistics in Houston. At the start, he handled things like loading and trucking himself. He sold the company to Apollo Global Management APO in 2007, netting more than $300 million in the deal.
A year later, Crane founded another logistics business, Crane Worldwide; it now does an estimated $1. 6 billion in revenues annually and accounts for 50% of his net worth. Meanwhile, Crane made his first run at MLB ownership in 2008 when he had a handshake deal to buy the Astros, but he backed out, according to The New York Times, reportedly incensing then-owner Drayton McLane Jr.
and former baseball commissioner Bud Selig. Crane went on to make unsuccessful efforts to buy the Chicago Cubs and Texas Rangers. McLane eventually agreed to sell it to Crane in 2011, i.
Although, it took months for MLB to clear the Astros’ new owner due to an investigation by the Equal Employment Opportunity Commission that accused Eagle Global, and Crane himself of racial and sex discrimination in the 1990s. The company settled for $8. 5 million, and $6 million was later returned when an arbitrator ruled only 10% of the claims were valid.
The Astros were one of the worst clubs on the field when Crane took control, posting back-to-back seasons of more than 100 losses and facing criticism for losing to stockpile draft prospects. But if that was the plan, it worked. By 2014, the Astros had one of the best farm systems in the league, later developing stars like World Series MVPs George Springer (2017) and Jeremy Peña (2022).
The club won its first World Series title in 2017, adding an American League pennant in 2019. The success story was tarnished following a report from The Athletic in 2019 that accused the Astros of using cameras and other technology to steal signs from other teams . MLB found the cheating allegations to be true.
As punishment, the league suspended former manager A. J. Hinch and former general manager Jeff Luhnow each for a year, fined the organization $5 million and took away its first- and second-round picks in 2020 and 2021.
Manfred absolved Crane of any blame or involvement, saying in a statement that the Astros owner was “unaware of any of the violations of MLB rules by his Club. ” Crane fired Hinch and Luhnow in the aftermath. Even under the scrutiny of the entire baseball world, the Astros never missed a beat.
The club won the American League West in 2021 and returned to the World Series, before losing to the Atlanta Braves. This season, the Astros won an AL-best 106 games. Crane’s club has made the playoffs in seven out of 11 chances during his regime.
“He seems to be willing to, almost in the way that his business empires grew, do virtually anything to maintain that success,” Georgetown’s Conway says, citing examples like the hiring of legendary manager Dusty Baker in 2020. “In a business where you’re punished, whether it’s drafting or other things, for your success, the game tries to find ways to balance out talent and balance out opportunities. So, a tip of the cap in that regard in an era right now where it’s difficult to [find success] the way the game is set up.
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From: forbes
URL: https://www.forbes.com/sites/justinbirnbaum/2022/11/05/how-houston-astros-owner-jim-crane-built-baseballs-latest-dynasty-and-his-own-16-billion-fortune/
