Here’s a dirty little secret: When it comes to iconic skyscrapers, deluxe mansions and fabled sports franchises like the Boston Red Sox, everything is always for sale. Period – no matter how many denials are offered up.
Whether there is a deal, however, depends on the price, the timing and the owner’s interest in parting at that moment with his prized asset.
So it is with financier John Henry and his heated denials of a recent report that he was exploring a sale of the Sox. I have no inside scoop here, but the Sox chief’s efforts to quash the recent outbreak of sale speculation certainly doesn’t rule out a deal sometime in the future, whether it’s few months, a few years or a decade from now.
That’s just the way business is done these days, especially by big-game investors like Henry, who routinely makes and loses fortunes in the hedge fund business.
“At some point, most owners of businesses like to have an exit strategy,” said Larry Grimes, head of the Maryland-based Sports Advisory Group. “It’s kind of hard to show allegiance and loyalty to a team when you can book a $400 million to $500 million or $1 billion profit.”
By that measure, certainly Henry and his fellow Sox owners have lots to be tempted by.
Timing Is Everything
Henry and West Coast TV mogul Tom Werner and a list of blue chip investors bought the Sox for $700 million back in 2002.
Today it is worth almost double that – roughly $1.2 billion to $1.3 billion, according to Grimes and published reports.
Moreover, the timing of the sale rumors is interesting indeed, with sport franchises poised to become hot properties once again after a tough few years following the Great Recession.
One-time Boston developer Frank McCourt walked away with about $800 million after running the Los Angeles Dodgers into the ground and then selling the franchise for more than $2 billion a few months ago.
The big money fetched by the Dodgers surely got some attention among owners of other big-name franchises.
In fact, Henry may very well have been approached by a potential buyer or group of buyers looking to see if he might play ball, Grimes said.
All that said, it’s anyone’s guess when Henry and his fellow Sox owners might decide to cash in on one of the sports world’s most coveted franchises.
Financiers like Henry typically have a long-term game plan, one that calls for buying and holding for a certain period of time, whether it be five years or 15, and then selling, Grimes noted.
Henry has owned for 10 years, so he could hardly be accused by anyone of ruthlessly flipping the team.
End Of Inning
There’s also the perennial speculation that reverses in Henry’s volatile hedge fund business – coupled now with his big investment in a British soccer team – will force him to seek financial relief by unloading the Sox.
Of course, that story has been written more than once over the past seven years, and Henry, if anything, has doubled down on his sports investments.
But realistically, Henry, Werner and gang have done everything they are going to do as owners of the Sox – and they surely know it.
They’ve squeezed every bit of new revenue possible out of Fenway, jamming thousands of new luxury seats into the antique ballpark and harvesting a cornucopia of corporate sponsorship deals.
The Sox owners have turned the New England Sports Network into a local powerhouse, revving up another big source of revenue.
And they’ve famously brought home two World Series championships to Boston, accomplishing a feat that may not be replicated anytime soon.
But despite their devoted fans, the Sox remain and always will be a regional, New England franchise, with all the passionate support – and limitations on growth – that this comes with.
Try as they might, Henry and company won’t be able to turn the Sox into the Yankees, with international appeal, or even the Dodgers, fetching more than $2 billion after suffering through one of the worst owners in modern times.
While Boston certainly is a big media market, it is not in the mega category like New York and Los Angeles.
Henry and gang have hit a ceiling – and if things start to so south, as they did last season, well, look out. The Sox owners got quite a ride – and a fair amount of affection from the local fan base over the past decade – but the love is definitely gone now.
Okay, I am not expecting Henry to sell tomorrow. But to think that day won’t come someday is naïve in the extreme.
Stay tuned, because when it comes to sports, nothing lasts forever, especially when it comes to team ownership.
