Will Fenway Sports Group Actually Sell the Boston Red Sox This Offseason?

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Will Fenway Sports Group Actually Sell the Boston Red Sox This Offseason?
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At this point there’s really not much to say about this year’s team, which will likely finish with Boston’s worst record since 1992. If the Sox win less than five of their final 12 games—a strong possibility considering their recent play—they’ll reach 90 losses for the first time since 1966.

Instead, the focus recently has been on the team owners. There have been rumors that the group that owns the Red SoxFenway Sports Group—is quietly shopping the team.

The first reports of a possible sale surfaced on Bill Simmons’s B.S. Report podcast on Sept. 12. Simmons, when talking with his friend, NY Yankee fan John O’Connell, stated the following:

“I have a friend who knows things, and this friend told me two weeks ago that the Red Sox are going to get sold this winter.”

The next day, Fox Business writer Charlie Gasparino also suggested the possibility, writing:

“While…the talks appear to be in the early stages, executives at Fenway Sports are debating whether they have the financial resources to run both teams, according to people with direct knowledge of the matter.”

John Henry has steadfastly denied the rumors, but despite the fact that he seems quite adamant to dispel the notion, there’s a reason it’s there in the first place.

Simmons made a number of points on his podcast as to why the current group might sell. The primary reason is FSG’s ownership of the English soccer (football) team, Liverpool FC.

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The group paid $476 million for the club in 2010, bringing their total purchases for the two teams to about $1.2 billion. Might that much spending, and the possibility of a large profit from a Sox sale, entice the owners to sell?

Gasparino reported that Henry’s company—which “specializes in the futures market”—has underperformed, with some funds losing as much as 16 percent this year. A look at Henry’s Wikipedia page shows that the first two articles cited are stories that detail financial difficulties at his company. The second piece states that he lost $400 million in one fund in just a month.

Underperforming financials would comply with the recent Sox trade of over $250 million of contracts to the Dodgers. In the last two years as well, the Sox haven’t been as willing to take on high salary contracts as they were when Lackey and Crawford were signed.

There’s also been talk of Henry’s waning interest in the Red Sox. As Simmons’ suggests, there isn’t much left for the group to accomplish. They already won the club’s first World Championship in 86 years, and brought them another one in 2007. They’re now faced with a postseason or bust mentality, and that can be dangerous—especially if you’re looking to spread costs around different assets.

Gasparino wrote that “people close to the executives inside Fenway say management has been increasingly focused not on the Red Sox, but on the future of the Liverpool team.” That’s consistent with what Simmons said: “Everyone in Boston is saying [Henry’s] lost interest in the Red Sox.”

His friend O’Connell also made the point that Henry has a twitter that follows 10-12 Liverpool players. He was incorrect in that statement, but a quick look at Henry’s account shows that out of the 13 people he follows on twitter, nine of them are either writers or are associated with Liverpool FC. There is no sight of anything Red Sox related.

Additionally, Simmons mentioned that Henry and company have done this before; turn a declining asset into a valuable one and then sell it off.

The first team that Tom Werner owned a part of was the San Diego Padres. In 1990, he was one of 15 investors in the club, but had the largest financial stake and was known as the general managing partner.

The team went downhill fast under Werner’s watch, falling from 89-73 in 1989—the year before he took over—to 47-70 in a strike shortened 1994 season. The big reason for the decline was a 1993 fire sale. Players such as Gary Sheffield and Fred McGriff were traded for cost-cutting purposes.

Eighty percent of the team was eventually sold after the 1994 season for $80 million, which meant even though Werner led the team to two consecutive last place finishes, the franchise increased in value by 25 percent, and he was all the better for it.

Henry also has had past experiences with owning MLB teams. He became the sole owner of the Miami—formerly Florida—Marlins in 1999, paying $158 million for the club. Ironically, the first player Henry drafted was Josh Beckett, and they spent the No. 1 overall draft pick in 2000 on Adrian Gonzalez.

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How fitting would it be if Henry’s last major move as an owner was trading away both of those players?

It’s certainly possible that these are just rumors, and that the ownership group will continue to manage the Red Sox. But if this past season is any indication, changes may indeed be coming.

Considering that both Henry and Werner have purchased and sold teams in the past, their combined years spent as majority owners of the Marlins is less than their tenure with the Red Sox, a sale is more than likely to happen this offseason.

 

Stephen Sikora is a current student at Boston College and featured columnist for Bleacher Report. He also writes about BC sports at bcheights.com. Follow him on twitter @sjsik.

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