Boston Red Sox Franchise Value Very Healthy Despite Recession

Eighteen months ago, the NY times announced that it was actively shopping its stake in New England Sports Ventures, which owns the Red Sox, NESN, Fenway Park, and other real estate holdings. It said it was selling its 17.5 percent stake in NESV in an effort to raise cash and shield the paper from the rapidly-developing revenue squeeze that hit the newspaper industry in the wake of the recession.

Under ever-increasing pressure from its investors to sell the company’s non-core assets, the paper went from saying it was “open to selling” its interest in the Sox to aggressively marketing its stake; but, for a variety of economic reasons, the Times has had a hard time finding a buyer in this climate who would pay its asking price for its entire share in the Red Sox, said to be a “premium” price tag.

But this week, the Boston Globe (bought by the NY Times in 1993) reported the paper recently sold a small portion of its stake in the Sox to a Boston venture capitalist. The Globe reported that details of the sale indicate the price was nearly triple what the company paid for it eight years ago.

The Times Co. paid $75 million for its stake in the Sox in 2002, the year John Henry acquired the team. It sold about 1.2 percent of the team to Henry McCance, a retired Greylock Partners investor. According to The Globe, the math means that units that once went for $100,000 are now fetching about $280,000.

With that said, the numbers reported by The Globe did not add up when I pulled out my abacus; but, that could be because I don’t have access to ALL of the details of the sale. Still, the financials in The Globe article were confusing and did not pass “the smell test.”

Neither the Times Co. nor the Red Sox would comment on the sale or the valuation of the team.

The Times remains committed to selling the rest of its stake in the club…on its terms.