Are the Red Sox Owners in It for the Love of the Gain?

After a $1.5 billion deal to take Fenway Sports Group public fell through, Red Sox owner John Henry is still seeking investors to expand his mini sports kingdom—a move some fans worry will steal his attention from the Olde Towne Team. Is this the worst idea since the Sox traded away Babe Ruth, or just another sign that Boston is taking over the world?

Illustration by Benjamen Purvis

For Red Sox die-hards, the turn of the calendar to March represents an invitation to officially begin obsessing about the upcoming season. Despite the past year’s turmoil and travails, a new corps of prospects is taking grounders at spring training down in Florida this month. April’s opening-day festivities will include real, live fans—albeit only a few thousand—at Fenway Park for the first time in 18 months. Whatever sense of return to the pre-COVID era a new season might hint at, though, it seems principal owner John Henry’s attention is fixed squarely on the future. And it’s not necessarily one that includes another title for his baseball team anytime soon.

Over the past two decades, the Red Sox have become a veritable moneymaking machine. The sticker price when Henry acquired the Sox in 2002 was a respectable $660 million. This year, the team was valued at $3.3 billion—a five-fold increase. Now, the Red Sox are serving as collateral for Henry’s next big move. Throughout the pandemic, Henry has reportedly been exploring a variety of novel ways to raise cash for the team’s parent company, Fenway Sports Group, first by trying to use a Special Purpose Acquisition Company, known as a SPAC, to take the company public, and, after that deal fell through in January, eliciting investments from private-equity firms. In mid-March, the fruits of all those labors became public: Not only has FSG landed $750 million from RedBird Capital Partners, they are bringing on NBA superstar LeBron James as an investment partner.

It would be tempting to wish that Henry and FSG chairman Tom Werner would channel those new millions into the Olde Towne Team, but don’t get your hopes up. The resounding prediction in the financial world is that Henry’s sights are set not on improving the Red Sox, but rather on purchasing another team—most likely a big-name European soccer club to go along with his last large purchase, Liverpool FC. Those machinations are cause for concern among many observers, including Barstool Sports’ Jared Carrabis. “When you have investors to please,” he says, “they only care about profits. In a market like Boston, that’s not going to fly.”

As nervous as it makes some Red Sox fans, Henry’s focus on asset acquisition is nothing new. After taking control of the team and the New England Sports Network, Henry and his partners went on to found a sports management company as well as gobble up a sizable chunk of the real estate surrounding Fenway Park and a NASCAR team, all before dropping about $480 million for Liverpool’s historic club.

At first, Red Sox Nation treated Henry’s new toys as an afterthought when ownership was willing to spend whatever it took to win another banner, but last year’s trade of Mookie Betts—because the Sox wanted to steer clear of the nine-figure deal that the former MVP eventually signed in Los Angeles—has created a new rift between the people who own the team and the people who watch it on TV and in the stands. A survey conducted by Channel Media & Market Research last fall found that just 5 percent of fans believed Henry was handling his team better than any other owner in New England, putting the Red Sox behind even the Revolution (that’s Bob Kraft’s soccer club, in case you forgot). Much of the disapproval was linked to the trade of Betts, a move that three-quarters of people rated poorly. “People don’t like management now,” says Globe sports columnist Dan Shaughnessy. Though Henry has proved himself to be an excellent owner in Shaughnessy’s eyes (winning will do that), even Shaughnessy acknowledges that the relationship between the Red Sox and its devotees has become strained in recent years. “The popularity of the team peaked in ’03, ’04, ’05,” he adds. “They’ll never achieve that again.”

In many ways, this new incarnation of the Red Sox—a team led by a cadre of sophisticated dealmakers toying with global expansion—mirrors the trajectory of Boston itself. Once a hardscrabble, working-class, provincial city, Boston has become a modern, global metropolis populated by finance, pharma, and tech types. It is understandable that there’s some nostalgia for a time when Red Sox ownership—like Boston itself—felt like a more intimate, local affair. The big unknown, however, is whether Henry can continue to pursue his grand, global ambitions for Fenway Sports Group without jeopardizing the loyalty of fans who only want to make sure their team drubs the Yankees every year.

It wasn’t long after Henry got the Red Sox humming along as a predictively profitable business that he began to think bigger. While the Yawkey family, which owned the team through most of the 20th century, was preoccupied with “battling in the middle of Connecticut to expand that line between where Yankees and Red Sox fans meet,” says Brendan Coffey, of the sports business website Sportico, Henry’s group has a significantly more expansive idea of what it means to be a sports team owner. Namely, that there’s no reason to settle for just one team—or just one country. “It’s a world market now,” Coffey says.

In fact, says Bruce Schoenfeld, a veteran journalist at work on a book about analytically savvy owners such as Henry, FSG is “never not interested” in kicking the tires on a new investment opportunity: “They’ve been very consistent over the years at taking a hard look at things on the acquisition side that could be potentially incorporated into their holdings.”

When word leaked in October that ownership was looking to raise $1.5 billion by going public, it appeared that was how they’d come up with the cash for a new team. Those hopes were dashed in late January, however, when news broke that Henry’s negotiations with a SPAC had come to an end. As embarrassing as it was at the moment, Schoenfeld says Henry’s pursuit of that deal just reflects his open-minded approach. To his point, FSG quickly pivoted, reportedly landing a deal with Dallas-based Arctos Sports Partners in addition to the $750 million it received from New York’s RedBird Capital Partners.

The size of that windfall puts some other price tags in perspective. It sure makes it seem like the Red Sox could have afforded the $30 million average annual salary Mookie Betts eventually received from the Dodgers. They also could have afforded the $20 million luxury tax from Major League Baseball that signing him would have triggered by pushing their payroll into a new bracket. But Henry balked, and in doing so signaled an unwillingness to accomplish what the Dodgers have: build a behemoth of a team that is now enjoying a championship off-season after making the playoffs for eight straight seasons, never mind the eye-popping $43 million luxury-tax bill they incurred a few years ago.

Most fans don’t begrudge Henry his billions; they only ask that he not shy away from opening his checkbook when it comes time to keep their favorite players in town. By some estimates, the Red Sox and Liverpool together raked in well over a billion dollars in revenue for Fenway Sports Group in 2019, yet the Red Sox finished last season with one of their worst records of the past half century, and one of the worst in baseball that year.

This winter, the Red Sox’s reluctance to sign players to expensive long-term deals was on display once again, when the team passed over two of the top free agents on the market—both of them All-Stars with local ties (outfielder George Springer grew up in Connecticut and pitcher Corey Kluber lives in Winchester). Instead, the Sox opted to recruit a gaggle of practically anonymous journeymen working under short-term contracts, who cost anywhere from $3 million to $10 million a year.

In the boardroom, it’s hard to argue against spending cautiously or diversifying your assets. But in sports bars and living rooms across New England, these decisions risk unmooring the ever-devoted Red Sox fanbase from its loyalty to the men who own the team.

To be fair, Henry’s ownership of the Red Sox has been, on balance, a godsend to fans. The team won its first World Series since 1918 on his watch, and then three more in the next decade and change. By comparison, the Red Sox made the World Series just four times during the Yawkeys’ 70-year reign. The dramatic gap between that initial run of success under Henry and the team’s more recent struggles has led some to believe ownership is getting a little too comfortable. Susan Mulcahy, the CEO and president of Channel Media & Market Research, perceives a “certain complacency” in Red Sox management—a feeling that after hanging four banners, their reputations should be sealed in the eyes of fans forevermore. “It might be good enough in Detroit,” she says, “but it’s not going to be good enough in Boston.”

Shelly Verougstraete, a lifelong fan and avid baseball blogger, is one of many who feel disconcerted about the current state of the team, noting its whipsawing fortunes between being world-beaters and punching bags. At the dawn of each season, she says, “You don’t know what kind of team you’re going to get.” Those ups and downs have left fans questioning Henry’s passion and commitment. As one respondent to last fall’s Channel Media & Market Research survey put it: “Ownership has delivered on a number of World Series wins and just doesn’t care.”

If the current ownership seems content with mere competence, it may be because it has found the team doesn’t have to win to make money; it just has to be competitive. In the digital era, live sports have become the only form of entertainment that can reliably get millions of viewers to tune in—not even the series finale of Game of Thrones could beat a typical football playoff game. This has enabled leagues to demand extravagant broadcast rights deals from TV networks (just in the past three years, MLB teams raked in and split more than $8 billion from Fox and Turner Sports). Between its cut of the national TV dollars and its revenue from NESN, Fenway Sports Group has little incentive to provide its captive audience with anything beyond a team that’s not dreadful. The franchise has settled into a pattern that rewards casual fans around the globe who can tune in for the years when the Sox are competitive but who don’t care much if they don’t win.

That isn’t enough for locals. “Owning a baseball team is about making money,” concedes Barstool Sports’ Carrabis. “But priority number one should be winning a championship.” For Henry, the plan may simply be to accumulate enough franchises in enough places that, no matter what, somewhere in the world, at least one of them is winning a title, even if it’s not the Red Sox. (Indeed, in the past two years, Liverpool has won two major championships.) In a sense, FSG may be becoming something like a multinational corporation, content to offshore its wins elsewhere, so long as it’s good for the bottom line.

While the financial and tech titans who have come to call Boston home in recent years may sympathize with Henry’s lust for global conquest, for many longtime die-hards, it’s easy to look at the Red Sox of the past decade and wonder where the magic went. Like Boston itself, the neighborhood around Fenway, once a local haunt full of dive bars and Old Boston culture, now has a modern, even antiseptic sheen. Meanwhile the Red Sox increasingly feel less like a beloved local team than just another globally oriented brand. And much like Boston, which has become one of the most expensive cities in the country, Red Sox tickets at Fenway are among the priciest in the nation and out of reach for many fans.

Considering that pre-Henry, the Red Sox struggled to shake their reputation as perennial losers, it might be tempting to ask what business today’s fans have in grousing about not being champions often enough. Or to think it nervy that they are romanticizing a bygone era when the most anxiety-provoking part of a game was not taking a tie into the bottom of the ninth, but tiptoeing into the bathrooms of the yet-to-be-renovated Fenway Park. Schoenfeld—who is such a devoted fan he named his son after Ted Williams—is unimpressed by all the bellyaching. “There has not been an ownership group in my lifetime who was more competent than this one,” he says.

All of which is to say that fans can still find reason for optimism. There’s widespread belief that new arrival Chaim Bloom is the right chief baseball officer to lead the Red Sox out of the doldrums. As the Tampa Bay Rays senior vice president of baseball operations, he proved it was possible to turn a small-market team known for its thriftiness into a winner. “I’m really looking forward to seeing what Bloom does,” Verougstraete says. Schoenfeld is even more confident, predicting “by the middle of the decade, they’ll be one of the best teams in baseball again.”

In other words, the current disaffection between Red Sox Nation and the suits who own the team seems far from irreparable. “It starts on the field,” Mulcahy says. “There’s nothing that winning can’t fix.”