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Since billionaire John Henry took over as owner of the Boston Red Sox in 2001, the team has won two championships and has become the second highest earning team in baseball. (Rob Tringali/Getty Images)
Since billionaire John Henry took over as owner of the Boston Red Sox in 2001, the team has won two championships and has become the second highest earning team in baseball. (Rob Tringali/Getty Images)

Sports ownership

How Red Sox owners got it right Add to ...

At Fenway Park, championships are built on a solid foundation of popcorn and beer.

There are dozens of other reasons for the success of the Boston Red Sox over the past decade – consistently high payrolls, solid scouting and clutch plays have all helped the team post the second highest winning percentage in baseball over the past decade. But if there’s one lesson to be learned from the team’s success since it was acquired by billionaire John Henry in 2001, it is that you can’t get the big things right until you nail down the small details that go on around the game’s edges.

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“Any major sports franchise in a major market can do this,” says Sam Kennedy, the team’s senior vice-president and the mind behind many of its unconventional marketing initiatives that has transformed a small baseball ownership group into one of the largest sports companies on the planet. “But you need to get your core business right first – you need to be selling out every night, you need to get your sponsorship lined up and your concessions firing on all cylinders. Then you can really talk about winning.”

As Rogers Communications and BCE Inc. prepare to close their billion-dollar takeover of Maple Leafs Sports and Entertainment, in which they will become the joint owners of the hapless Toronto Maple Leafs (35-36-10 last year), the floundering Toronto Raptors (23-43 last year) and the hopeless Toronto FC (5-11-4 this season), the lessons of the Boston revival should give fans hope that things can indeed change for the better under the right ownership structure – regardless of how many clubs the owners need to focus on.

“If what happened here can happen in Boston it can certainly happen in Toronto,” Kennedy says. “Trust me, trust me, trust me.”

Indeed, the contrast between the approaches to winning taken by MLSE and the Rogers-owned Blue Jays will be in sharp focus this weekend, as the Jays take their sub-.500 record to Boston to play the Red Sox and Liverpool FC visits Toronto to play a friendly against Toronto FC.

Since the original Red Sox acquisition, Fenway Sports Group has bought the Roush Fenway NASCAR team, regional broadcaster NESN and formed Fenway Sports Management to handle all of the revenue opportunities that exist when the teams aren’t actually on the field or the track. Two years ago it acquired the struggling Liverpool FC and its Anfield Stadium – one of the most storied franchises in soccer.

The intention is to own the most iconic teams in the world, and make sure those teams are winners.

“They are unique in the way they have amassed these properties,” says Jimmy Lynn, the managing partner of the Washington-based sports advisory company JLynn Associates and a lecturer at Georgetown University. “But you’re going to see more teams go down that path because there is just so much opportunity if you can find a way to harness all of these pieces.”

The management group believes it has developed a template for success that can be replicated by any owner in any sport (even if it hasn’t quite worked out yet in Liverpool – Kennedy says, “we’re not there yet, but it’s early”). Every club has its own management and operates independently, but several of the parent company’s key executives, such as Kennedy, mix in across all of the properties.

Sitting in the president’s suite at his recently renovated ballpark – the team spent about $300-million on the stadium in the past decade to bring it up to modern standards ahead of its 100th anniversary – Kennedy recalls his early days with the ball club. The concessions were a mess, ticket sales were down and a consistently underperforming team pushed away many of the city’s once ravenous fans.

Ten years later, the team has the second highest winning percentage in baseball and the second highest team revenues. It has reached the playoffs six of the past nine years, winning two World Series titles. And in a world in which many franchises are owned by large corporations interested in padding their bottom lines on the back of the fans, the small ownership group has reinvested every penny the club has earned back into the team – its owners have never taken a piece of the action.

“Above all else we are interested in creating an organization that is financially sound,” Kennedy says. “It doesn’t necessarily have to be the most robust financial entity in the world, but all of our profits are reinvested into the business. Our partners haven’t taken any distributions since they got here – absolutely every penny goes back into things like player payroll and the physical refurbishment of our facilities.”

While the Fenway experience shows that there are opportunities in owning multiple teams, Queen’s University marketing professor Ken Wong says Fenway’s broad geographic reach makes it easier for it to focus on individual properties without cutting into its own profits. The issue in Toronto as the MLSE deal closes – likely by the end of the year – will be to keep the clubs from competing for the same dollars.

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