SBD/September 14, 2012/Franchises

Red Sox Execs Vehemently Deny Report FSG Is Exploring Sale Of Team

Henry called reports of a sale "completely without foundation"
Fenway Sports Group Chair John Henry "reacted swiftly Thursday to deny a report" that ownership was considering selling the Red Sox, saying that he was "committed to the franchise now and in the future," according to Peter Abraham of the BOSTON GLOBE. A Fox Business report stated that Henry and his partners were “quietly shopping” the team to potential buyers. The story "suggested that the Fenway Sports Group did not have the financial resources to operate the Red Sox and the Liverpool Football Club in England and would sell the Sox as a result." Within "minutes of the story’s publication on the network’s website, Henry returned an e-mail from the Globe and said it was false." Henry said, "A sale of any kind is so far from our thinking it hasn’t even come up apart from technical planning issues involving death or disability. This report is completely without foundation." Red Sox Chair Tom Werner "also reacted strongly." Werner: "There’s not a scintilla of truth to it. We’re not selling the team. I don’t know what else I can say." Henry "has a controlling interest in the team," while Werner and a group of 17 others "own varied percentages." Henry said that he is "aware of no desire to sell from within the group" (BOSTON GLOBE, 9/14). Red Sox President & CEO Larry Lucchino called the report "nonsense.” He said there has “not been one word -- one word! -- of discussion regarding” selling the team. Lucchino: “We are committed, for better or worse. We are the guys you are going to have to kick around for awhile” ("The Dennis & Callahan Morning Show," WEEI-FM, 9/13). In Boston, Quaratiello & Zaremba report several Red Sox "minority partners didn’t return calls seeking comment on whether they were approached by a would-be buyer" (BOSTON HERALD, 9/14).

INITIAL REPORT: Fox Business' Charlie Gasparino reported Red Sox management has had “internal discussions about selling” the team. Officials have “talked to at least one person I know about a potential sale with a price" of about $1.3B. However, that “doesn’t mean they’re going to do it.” Fenway Sports Group is “basically saying this: It’s very hard to own the Boston Red Sox and own the Liverpool soccer team, which takes a lot of capital to keep going.” Henry also owns a commodities firm “which right now is not doing very well." Gasparino: "There’s a lot of financial pressures mounting on Henry, mounting on the Fenway Group, and so what we understand is they are talking with potential suitors” (“Markets Now,” Fox Business, 9/13). Gasparino later defended the report, saying, "There’s no incentive for me to do this other than knowing first-hand that there has been what I would call an entrée of very early stage (talks).” Gasparino: “Among the brain trust of (Fenway Sports Group executives), there is talk and they’re talking about what to do with the team and to potentially sell it. Does that mean they’re going to do it? No. Are we in an extremely early stage? Yes. ... I am not making this stuff up, I don’t care how many times they deny it.” He added, "It seems like they’re diverting much more of their attention to that Liverpool team based on people I have been talking to that have first-hand knowledge of what’s going on. ... Based on our sources, we felt pretty strongly to going with it the way we described it” (“Mut & Merloni,” WEEI-FM, 9/13).

GOOD OUTWEIGHS THE BAD: In Boston, Dan Shaughnessy writes he does not think Henry is selling the Red Sox, and that is "probably a good thing." As "bad as the Sox are right now," the team is "likely better off with Henry, Tom Werner, and Larry Lucchino owning the team." Shaughnessy: "You know the old saying. Be careful what you wish for." The Red Sox "have had some bad owners here over the years." But Henry "goes down as one of the good ones." He is "a fan," and is "not afraid to spend money." Henry "put $285 million into Fenway and turned it into a 100-year-old crown jewel." He delivered "a couple of World Series championships and ruled over a franchise that made the playoffs six times in his first eight years of ownership" (BOSTON GLOBE, 9/14). In Boston, Michael Silverman writes Henry, Werner and Lucchino "need to be held responsible for overseeing the team’s woes and current state of collapse, and yes, if you’ve been listening, they understand how big a responsibility it is." But "let’s not confuse the issue and say that it’s been so bad that the owners who couldn’t prevent the team from getting into this mess should not be trusted to take their best shot to get the team out of it." Silverman: "Don't sell Henry short. Give him a couple more years" (BOSTON HERALD, 9/14).

WHAT OF THE TIMING? ESPN BOSTON's Gordon Edes wondered why Red Sox ownership would be "interested in unloading now, when Major League Baseball has just doubled the value of its TV deal with ESPN and has much bigger network deals pending." That would "seem to make it an odd time to be unloading a franchise whose worth will only soar in the next few years." This "just doesn't pass the smell test, no matter how much some alienated followers of the team might wish it was true" (ESPNBOSTON.com, 9/13). But ESPN's Tony Kornheiser said Henry "may have squeezed the lemon dry," and this "may be the right time to get out." With the Dodgers selling for $2.15B earlier this year, selling the team "could be a good business opportunity.” Grantland's Bill Simmons said, “They won two World Series. They’ve been in a swoon lately. They’ve turned this into the biggest asset they possibly could. This is what Henry does for a living -- he flips assets. So if you’re going to flip this asset, you would do it right now right after this Dodgers sale” (“PTI,” ESPN, 9/13).

LET'S GO STREAKING: Lucchino said he believes there are not a "lot of compelling reasons to increase ticket prices" for the '13 season, though there likely will be "some changes, perhaps a different approach to ticket selling.” Lucchino said he has not heard from a "single fan or received a single e-mail or gotten a single letter" from Red Sox fans who have gotten tired of hearing about the team's sellout streak. Lucchino: "The Boston Globe has taken a very different definition. We’re battling definitions. Their definition is a literal one, and that every possible seat must be sold. The operating definition that was here for years and years and was here long before we got here -- and it’s in place for most Major League Baseball teams, although there are some variations -- is most baseball teams define a sellout as when you have more people in the ballpark" (“The Dennis & Callahan Morning Show,” WEEI-FM, 9/13).

LUCCHINO STICKING AROUND: Henry Thursday "cleared up rumors" about Lucchino's future with the team, stating that Lucchino "will be back next season." Henry said that Lucchino "had indeed signed his contract" (ESPNBOSTON.com, 9/13). Lucchino said of his future with the team, “I love it here. I love Boston. This is a place I call home. I hope to be here for the foreseeable future. I’ve got no plans to go anywhere else” (“The Dennis & Callahan Morning Show,” WEEI-FM, 9/13).
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