The Boston Red Sox have won three World Series titles in the last 12 years, eight in the franchise’s 113-year history, and are back in the playoffs again this year, starting on Thursday. If you ask Forbes, it’s the third-most valuable team ($2.3 billion) in baseball.
But many baseball fans may not know the extent of additional sports holdings that the Red Sox owners own, and how those other assets inform the management of the Red Sox.
John Henry and Tom Werner, the principal owners of the team, bought the Red Sox in 2001 along with the other members of a group called New England Sports Ventures, which changed its name to Fenway Sports Group in 2011. And while the crown jewel of Fenway Sports Group is the Red Sox (and Fenway Park), FSG also owns majority stakes in: Liverpool Football Club (and Anfield, the team’s stadium); Roush Fenway Racing (a Nascar team); and New England Sports Network (NESN, which televises Red Sox games). Separately from the Red Sox ownership group, John Henry also bought the Boston Globe in 2013.
In 2004, FSG created Fenway Sports Management, an innovative marketing and consulting arm that handles sponsorship sales for FSG’s assets (Red Sox, Liverpool, Roush, etc.) but also for other clients as wide-ranging as LeBron James (who owns a piece of Liverpool through his deal with FSM), Boston College, and the Deutsche Bank Championship, a PGA Tour event. At one point, Johnny Manziel was an FSM client. Dunkin Donuts, JetBlue, and Stop & Shop are all consulting clients of FSM. And FSM bought the minor league (single-A) Salem Avalanche in 2007 and renamed it the Salem Red Sox.
Sam Kennedy, who is finishing up his first season as president of the Red Sox (he succeeded Larry Lucchino), says Fenway Sports Group is “like a diversified stock portfolio where they have investments in blue-chip sports assets that are must-see content, must-have content for consumers.” Kennedy was previously COO of the Red Sox and is still president of Fenway Sports Management.
Every different business activity of FSG and FSM, whether it’s managing the global marketing of LeBron James or handling merchandise sales for Boston College, is “about generating the resources we need to reinvest back into the product on the field, or on the pitch, or on the air,” Kennedy says.
FSG’s partnership with daily fantasy sports company DraftKings is a good example. Major League Baseball has invested in DraftKings (during the height of legal scrutiny around daily fantasy last year, MLB Commissioner Rob Manfred said he does not believe it constitutes gambling) but FSG has its own separate deal that involves signage at the ballpark and a “DraftKings pitch counter” on NESN during Red Sox games. It also helped DraftKings get a partnership with Liverpool, thanks to FSG’s relationship.
Certainly DraftKings, and its main competitor FanDuel, are controversial—New York State only just passed a bill this fall to expressly legalize and protect daily fantasy sports. “I think daily fantasy is an important category for sports and for American business in general,” Kennedy tells Yahoo Finance. “It’s a representation of where the world’s going. Baseball has made it clear that we are going to connect the sport with a younger audience, and millennials and the like are involved in daily fantasy. So to Commissioner Manfred’s credit, baseball has gotten involved in the space.”
Growing the game to younger fans is a top priority across the league, as the NFL’s popularity has ballooned to the point where football somewhat overshadows all other American sports and dominates the news cycle all-year round. “Everything that happens in baseball now is done with an eye on connecting to the next generation of fans,” Kennedy says, “and we’re trying to do our small part at Fenway Park.”
To aid in the effort, the Red Sox launched a $9 student ticket system two seasons ago, which sets aside $9 tickets for anyone with a New England student ID. The team has also beefed up Fenway’s concourse with virtual reality experiences and games to get teens and families to the park.
David Ortiz, the Dominican slugger who is in his final season with the Red Sox after 13 years, is, in a way, another example of how the team tries to reach young fans. Kennedy calls Ortiz “the most important and certainly the most beloved figure in the history of the franchise.” So the team celebrated its star in his final regular-season weekend (but didn’t overdo it all season long) and at the final home game against the Toronto Blue Jays, presented Ortiz with various meaningful gifts and honors. Kennedy and other executives, as well as former Red Sox stars, as well as family members, trotted out one by one to congratulate the star known as “Big Papi,” who has earned praise for his charitable giving off the field and his work with children in the Boston community.
And Kennedy cites Bam Tech, the independent video-streaming business of Major League Baseball Advanced Media, as a major aid in the effort to bring baseball to new audiences. “Bam Tech has been probably the most successful digital arm of any sports league in the country,” Kennedy says. Disney agrees: the company recently spent $1 billion for a 33% stake.
“They’re streaming games live around the country,” Kennedy says, “which is important, because we need to be where that next generation of fans are.”