72 replies to this topic

[SoxScout]

http://www.foxbusine...ld-be-on-block/

The owners of the Boston Red Sox are mulling a potential sale of the storied baseball franchise, and have even begun quietly shopping the team to potential buyers, the FOX Business Network has learned.

The team is owned by the Fenway Sports Group, which also owns the English football team Liverpool FC. While no final decision has been made about a potential sale, and 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.

The Red Sox have publicly denied that they are for sale. Reached Thursday, a spokesperson for the team said of the potential sale that “there is no truth to that rumor.” However, there has been talk for some time that the team is informally gauging interest in the club.

The price tag eyed for any potential sale would be a steep one, according to people who have spoke with Red Sox management: $1.3 billion. Forbes cites the value of the Red Sox at around $1 billion.

Recently, the team unloaded a slew of underperforming players, saving as much as $250 million through 2018.

Also likely weighing on the consideration to sell the team is the poor performance of Henry’s investment company, John Henry & Co. this year, these people say. The firm, which specializes in the futures market, has had a volatile year, with funds such as his Global Analytics losing nearly 16% this year, according to the company’s website.

But according to people with direct knowledge of the matter, the biggest challenge for Henry is running two expensive sports franchises. Fenway Sports purchased the Liverpool team for $476 million in 2010, and has been widely criticized for overpaying for players who have under-delivered.

In 2010, Marketwatch named Gasparino one of "12 Broadcasters Who Are Making a Difference", and The Daily Beast called him one of the "Top 15 "Economic and Business Commentators" (and the only television journalist on the list).

http://en.wikipedia....arlie_Gasparino

Edited by SoxScout, 13 September 2012 - 10:52 AM.

[tims4wins]

FWIW, Simmons mentioned that he was hearing rumors on his podcast the other day

[Rudy Pemberton]

This should come as no surprise. They've gutted the roster of any meaningful future obligations, and ownership has seemed to waffle between being ambivalent and absent. Get ready for a small payroll next year.

Can't wait for the book.

[Gambler7]

Wish this article came out a few hours earlier. D&C asked Lucchino this morning if there were any truth to the rumors that they are preparing the team for a sale and he very firmly and strongly denied it.

[Philip Jeff Frye]

Seems unlikely to me, at least in the short term. The team's brand is tarnished versus where it was a year ago. NESN's ratings must be plunging. There's no prospect of a ticket price increases in the near term. Maybe the new ESPN TV deal offsets these things a bit, but if I were them thinking about selling, I'd really be kicking myself that I hadn't done it 18 months ago.

Of course, there could be some other issues involved. JWH is not getting any younger. Maybe they see that Fenway's long-term structural issues are finally turning into real problems but they don't want to fight that fight.

[Smiling Joe Hesketh]

Wish this article came out a few hours earlier. D&C asked Lucchino this morning if there were any truth to the rumors that they are preparing the team for a sale and he very firmly and strongly denied it.

What did you expect him to say? He also slung some bullshit about the fans being proud of the sellout streak. All he needed was a clown nose to complete the ensemble.

Here's the key part to me:

In fact, people close to executives inside Fenway say management has been increasingly focused not on the Red Sox, but on the future of the Liverpool team.

If that's the case then by all means sell away.

We had a nice run going for a while.

[Rough Carrigan]

Seems unlikely to me, at least in the short term. The team's brand is tarnished versus where it was a year ago. NESN's ratings must be plunging. There's no prospect of a ticket price increases in the near term. Maybe the new ESPN TV deal offsets these things a bit, but if I were them thinking about selling, I'd really be kicking myself that I hadn't done it 18 months ago.

Of course, there could be some other issues involved. JWH is not getting any younger. Maybe they see that Fenway's long-term structural issues are finally turning into real problems but they don't want to fight that fight.

There's also the timing of the sale and general economic conditions. If you think the economy will be really bad in 2013 and 2014, no matter who's president, then you might want your money now.

[Harry Hooper]

Seems unlikely to me, at least in the short term. The team's brand is tarnished versus where it was a year ago. NESN's ratings must be plunging. There's no prospect of a ticket price increases in the near term. Maybe the new ESPN TV deal offsets these things a bit, but if I were them thinking about selling, I'd really be kicking myself that I hadn't done it 18 months ago.

The Dodger sale result obliterates such thoughts. On a related note, the FoxBiz article citing the obsolete Forbes valuation certainly dents the article's credibility.

[Gambler7]

Oh I wouldn't expect him to say anything else, it just would have been nice if D&C had this specific article to point to instead of just "rumors".

And yes, the long winded explanation of how "sellouts" work was just fascinating radio.

[Philip Jeff Frye]

The Dodger sale result obliterates such thoughts.

But a big factor in the Dodgers sale was their near-term ability to regain their TV rights and expand their revenues via their own NESN-like network, in a huge huge market.

The Sox have not only already done that, but NESN's value is almost certainly falling as its ratings drop.

[OilCanShotTupac]

Just was talking the other day with my brother, who crapped all over the Henry group, saying "all these guys care about now is soccer."

Guess it's true.

[NomarRS05]

What did you expect him to say? He also slung some bullshit about the fans being proud of the sellout streak. All he needed was a clown nose to complete the ensemble.

Here's the key part to me:



If that's the case then by all means sell away.

We had a nice run going for a while.

It has been a nice run overall but I would agree that, if in fact the ownership group isn't focusing as much of their efforts on the Red Sox as Liverpool, all parties involved would stand to benefit from new ownership.

[terrynever]

This ownership gave the Red Sox two of the greatest seasons in franchise history and one of the most disappointing seasons, too, all in a span of 10 years. They are just distracted enough by other duties to believe that those two championships outweigh the recent negatives.
In their defense, this team is a quick fix based on all the sources of revenue that the owners strengthened or developed during their tenure.

[Rasputin]

They are just distracted enough by other duties to believe that those two championships outweigh the recent negatives.

Wait, there are people who don't think the two championships outweigh the recent negatives?

REALLY?

I find that insane.

[JimD]

Let the Mark Cuban Era begin.

[SoxFanInPdx]

Wait, there are people who don't think the two championships outweigh the recent negatives?

REALLY?

I find that insane.

Agreed. How fast some forget. Not to dig up a topic that has been mulled over the past 7-8 years on here, but after the 2003 season I was starting to doubt I'd live to see one WS title. Much less two. If these guys have truly lost interest then they need to sell to a group that can focus their whole attention to this organization. I'm grateful this ownership made it priority to win and renovate Fenway instead of giving it the wreaking ball. The past 2-3 years have been lackluster to put it mildly, but I've never doubted that this group has had nothing but good intentions for the fans and the club.

[tims4wins]

Henry says nope

http://www.boston.co..._henry_red.html

"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.
"Regarding unnamed sources: Any sale discussions that may have taken place were missing three key people — Larry, Tom and me. The Sox and any of the other components of FSG are not for sale and will not be for the foreseeable future."

[Lose Remerswaal]

This doesn't surprise me at all. Not just because of the massive contract offloading from the Punto trade, but because everything we learned about John Henry years ago is that he's an "all in" kind of guy, and it's been obvious that ever since the Boston Red Sox turned into "a wholly owned subsidiary of the Fenway Sports Group/Fenway Sports Management" that there have been other things on his plate that distracted him from the team. Liverpool. Roush Fenway Racing. Boston College. LeBron James. Hell, even expanding Fan Foto and Red Sox Destinations. And Henry knows this and since he's already reached the top with the Sox, it wouldn't surprise me if he concentrates on Liverpool at RFR for the next while. With the right new ownership this could be very good for the fans.

[Snodgrass'Muff]

While I would agree that there are several red flags here pointing toward the rumors being true, it's also possible that much like with the rumors about the Yankees a while back, the ownership group might be informally discussing the possibility of a sale to generate a market based valuation of the franchise with no serious interest in selling any time soon.

I'd be hesitant to jump to conclusions like the ownership group not caring about baseball anymore or being soccer first as well. It could certainly be true, but there isn't much evidence yet to support those claims. If the team spends no money or makes no moves to improve the team in 2013, there would certainly be plenty of smoke at that point. If that carries into 2014, that would likely constitute fire.

Until then, seems a bit of a leap.

[JimD]

Wait, weren't the Crawford and Lackey signings driven by ownership over the objections of the baseball operations staff? Maybe less-involved ownership is just what the Red Sox need right now.

[Snodgrass'Muff]

Wait, there are people who don't think the two championships outweigh the recent negatives?

REALLY?

I find that insane.

A bit off topic, and perhaps better suited for it's own thread, but yeah, anyone who thinks the last three seasons outweigh the two championships comes across (to me at least) as someone who hasn't been living and dying with the team since the 80's or even the early 90's. I would guess that most people who have been fans that long or longer have a perspective on the franchise that makes such a statement seem preposterous.

[Harry Hooper]

But a big factor in the Dodgers sale was their near-term ability to regain their TV rights and expand their revenues via their own NESN-like network, in a huge huge market.

The Sox have not only already done that, but NESN's value is almost certainly falling as its ratings drop.

The Dodger sale still raised the needle on how much a franchise plus regional sports network is worth to an extent that far outweighs any short-term ding to NESN's value.


The team may be quietly seeking up-to-date valuations since some limited partners want to cash out.


Edit: Maybe HWL are genuinely interested in selling, but almost every move they've made in any direction since about Year 4 of their ownership has been cited as evidence that they're putting the team up for sale.

Edited by Harry Hooper, 13 September 2012 - 11:40 AM.

[Mystic Merlin]

A bit off topic, and perhaps better suited for it's own thread, but yeah, anyone who thinks the last three seasons outweigh the two championships comes across (to me at least) as someone who hasn't been living and dying with the team since the 80's or even the early 90's. I would guess that most people who have been fans that long or longer have a perspective on the franchise that makes such a statement seem preposterous.

It's a case where recency overwhelms all else. I don't really think people - if genuinely probed about it - would stand behind that statement.

[BigMike]

Certainly every action they have taken in the last 3 months are the actions someone would do if they wre trying to sell the team. it may not be for sale, but I would be surprised if it wasn't. he team probably has dropped some value the past 12 months, but value remains extremely high. If they wait another year and next year is a rebuilding season, and people start not buying tickets as opposed to simply not showing up, then the value could drop precipitously.

Add in the NHL lockout looming, and how important the Bruins are to NESN for the next 6 months, and NESN could take another big hit

[MyDaughterLovesTomGordon]

I've seen Gasparino speak in person and looked into him a bit before I did so just because I was curious. I think he's more of a personality than a reporter, and I don't think he's above going with unsourced or poorly sourced stories if he knows it's going to generate pageviews.

Right now, the Red Sox are Lindsey Lohan getting into a car wreck drunk and with painkillers spilling out of the car when she opens the door. Every media outlet is looking for a way to write about them and grab some ancillary eyeballs.

Just think about what the "meat" of this story is: They're putting feelers to get an estimate of the franchise's worth; they're examining whether they have the resources to run both teams; they're internally wondering if a sale might make sense.

Wouldn't any franchise go through these basic steps periodically just in the interest of due diligence? Wouldn't now make sense as a good time to do it, considering the atrocious quality of the product on the field?

The owners have no choice but to vehemently deny. Just the fact that an asset is "for sale" diminishes its value on some level and it's not in anybody's best interests to confirm they're exploring sale options, especially if they, themselves, only view it as a very remote possibility anyway.

[SoxScout]

Gasparino will be on with Mut and Merloni at 1pm

[Red(s)HawksFan]

The Dodger sale still raised the needle on how much a franchise plus regional sports network is worth to an extent that far outweighs any short-term ding to NESN's value.


The team may be quietly seeking up-to-date valuations since some limited partners want to cash out.


Edit: Maybe HWL are genuinely interested in selling, but almost every move they've made in any direction since about Year 4 of their ownership has been cited as evidence that they're putting the team up for sale.

This was my first thought as well. As Henry is quoted as saying, any possible meetings about selling the team were missing himself, Werner, and Lucchino. Perhaps he's on to something and there have been discussions involving minority shareholders looking to get out, but that wouldn't involve selling the entire team or even a majority stake.

[Sille Skrub]

Let the Mark Cuban Era begin.

Oh man, I would love this.

As surprising as this seems to be, it really isn't. Considering what has happened over the past few months, selling the team seems like the next logical step.

It was a great run for this ownership group, but a change might be good.

[Harry Hooper]

Reminder: Forbes valued the Sox at $1 billion and the Dodgers at $1.4 billion. The Dodgers then sold for $2.15 billion a couple of weeks later, so a mere 54% under-estimate. Gasparino's ignorance of this context is noteworthy.

[NickEsasky]

Reminder: Forbes valued the Sox at $1 billion and the Dodgers at $1.4 billion. The Dodgers then sold for $2.15 billion a couple of weeks later, so a mere 54% under-estimate. Gasparino's ignorance of this context is noteworthy.

Did Forbes estimate factor in all the parking and other land when valuing the Dodgers or only just the team and Dodger Stadium?

[Harry Hooper]

Did Forbes estimate factor in all the parking and other land when valuing the Dodgers or only just the team and Dodger Stadium?

The debt-laden Los Angeles Dodgers, whom we say are worth $1.4 billion (including the team, Dodger Stadium and the lease to the parking lots)

Forbes

[Doug Beerabelli]

They'd be nuts not to kick the tires on the idea of selling the team now. Especially before FA signing period kicks in (and they may do things that would go against maximizing the sale price).

[PaulinMyrBch]

Posted Today, 12:26 PM
Henry says nope

http://www.boston.co..._henry_red.html


Quote

"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.
"Regarding unnamed sources: Any sale discussions that may have taken place were missing three key people — Larry, Tom and me. The Sox and any of the other components of FSG are not for sale and will not be for the foreseeable future."

I'm pretty sure this season qualifies as death or disability, or both.

[CrouchingTonyHiddenPena]

Conjecture preface*

I would be fine with Cuban. He seems to be genuinely devoted to his teams and players. That kind of passion might serve as a feasible transition if ownership were to change hands, and he already has a good record of franchise ownership with respect from those who work and play for him. This is all moot in reality of course, but if this were to move from the hypothetical to the potential, Cuban would be very appealing to me personally.

[NJ Fan]

I'm going with the "where there's smoke, there's fire" POV.

[Smiling Joe Hesketh]

Conjecture preface*

I would be fine with Cuban. He seems to be genuinely devoted to his teams and players. That kind of passion might serve as a feasible transition if ownership were to change hands, and he already has a good record of franchise ownership with respect from those who work and play for him. This is all moot in reality of course, but if this were to move from the hypothetical to the potential, Cuban would be very appealing to me personally.

And Bud Selig wouldn't let him join their little club when we wanted to buy the Cubs.

[CrouchingTonyHiddenPena]

I agree. Not sure why he won't, but you're correct. It's not a likely scenario. Mine was simply an opinionated hypothetical.

Edited by CrouchingTonyHiddenPena, 13 September 2012 - 12:41 PM.

[SoxScout]

Henry was just on the radio.... says the only thing they have talked about in the last year is what happens if he dies, and if that was released it would show just how invested they are long term.... says the problem since 2006 has been injuries, but you can't blame injuries, so the problem has been big ticket items and not focusing on having extreme depth.... says people may have been correct about ownership being too hands off and this year has showed them they need to change that, change having too much work delegated out....says Lucchino has signed a contract extension....

Edited by SoxScout, 13 September 2012 - 01:01 PM.

[Spacemans Bong]

Cuban might buy the Red Sox at 1.3 but bidding will surely take it higher than that and he would be out. Let's not forget, when the Dodgers bidding started getting crazy Cuban threw his hands up and walked away.

Also, in the best interests of the game, I would prefer the native Pittsburgher to own the Pirates.

[ShaneTrot]

I have not heard the radio interview with Gasparino but comments in my Twitter feed about it say this guy is pumping himself up and is a friend of Randy Levine, is this true?

I am a big believer in every asset is for sale at any time. How could it get worse than the last 12 months? I am ready bring on the change.

Edited by ShaneTrot, 13 September 2012 - 01:06 PM.

[E5 Yaz]

There was no way they would trade Adrian Gonzalez, either ... until a deal too good to pass up was offered. They have no intention of selling the team; it's the further thing from reality ... until it happens

[wutang112878]

I am a big believer in every asset is for sale at any time.

There was no way they would trade Adrian Gonzalez, either ... until a deal too good to pass up was offered. They have no intention of selling the team; it's the further thing from reality ... until it happens

Exactly and exactly.

Its funny that the Dodgers provide the best 2 reasons why this might happen. The Dodgers made the RedSox a much more attractive franchise to buy with the trade because the next owner gets a blank slate with payroll. And its the Dodgers crazy selling price that might justify a crazy selling price for the RedSox.

Henry, Larry and Werner can say whatever they want about the team being for sale, if some offered them $1.8B tomorrow its a done deal.

[Carmine Hose]

One thing to keep in mind is as these franchise prices rise over $1B, Bud will have less leeway to push away "unapproved" owners from the bidding table.

[adam42381]

Let the Mark Cuban Era begin.

This is what I came here to say.

[mabrowndog]

Cuban might buy the Red Sox at 1.3 but bidding will surely take it higher than that and he would be out. Let's not forget, when the Dodgers bidding started getting crazy Cuban threw his hands up and walked away.

But just having him in the bidding fray will be entertainment enough.

[LondonSox]

Trading the red sox for Liverpool would be one of the most poorly thought out trades ever.
These guys own a nascar team, and my limited understanding is nascar is in trouble. Empty seats at the biggest events of the year, costs spiraling higher and tv revenue and stadium revenue seem to have hit a ceiling.
There are a bunch of posts of why I hated the liverpool purchase. These include, no ownership consortium to limit costs, no salary cap, no draft, no cheap period of owning players, massive transfer costs. Players costs are crazy, millions to acquire, millions to keep and declining to free agent zero value.
Compare this to baseball, where the owners won't allow wage costs past a certain level, young talent is controlled and dirt cheap. FFS even the draft was considered too expensive so they controlled that to lower costs.

If I had to sell an asset it would NOT be the Red Sox, it would be Liverpool or NASCAR. But hey that's just me

[TheoShmeo]

Even if these guys were inclined to sell, I have trouble seeing them exit when things are at their lowest, a la Theo. They have always seemed to be proud of winning and concerned about their legacy. Sure, things have a way of changing fast, and economic pressure can override all. But I think this report is BS and believe what we're hearing from Henry and Lucchino about these rumors.

And in the loudest possible voice, YES, the two titles and the years of being in the mix since 2003 easily override the extreme and unreleting suck of the last two seasons. The Yawkey/Harrington Era is still sour. It's funny how often people trot out the "best manager of my lifetime" line with respect to Tito and then trash owners who are clearly the best owners of the Sox that any of us has ever seen.

[Ted Cox 4 president]

Why would JH choose Liverpool football--for which he has shown little in the way of innate ability, expertise, acumen, etc.--over Boston baseball? Because he wants a new challenge? Sees himself as an international man of action and money? He's made some serious blunders with Liverpool. If he's taken on too much and has to jettison something, why not 86 Liverpool and hold on to the Sox?

[mabrowndog]

Why would JH choose Liverpool football--for which he has shown little in the way of innate ability, expertise, acumen, etc.--over Boston baseball? Because he wants a new challenge? Sees himself as an international man of action and money? He's made some serious blunders with Liverpool. If he's taken on too much and has to jettison something, why not 86 Liverpool and hold on to the Sox?

Because he can sell the Sox at an enormous profit, generating a cash windfall. There's a decent chance he'd be selling Liverpool at a loss, and even if it turned a profit it would be a pittance compared to how the Sox have escalated in value.

Edited by mabrowndog, 13 September 2012 - 02:33 PM.

[canderson]

Perhaps they have little choice and need cash flow? Liverpool is likely hemorrhaging cash and NASCAR is in dire straights according to all sorts of reports. The ability to unload those two investments is probably nil whereas Boston despite on-field performance is still valued highly (especially in light of LAD's draw).