Thursday, September 21, 2006

Boston Fans Misunderstand the Details

Earlier this week, the Globe’s Steve Bailey wrote an article titled, "Sox owner may invest in NASCAR." It has been known for some time that Sox owner John Henry is a huge NASCAR fan and he has asked FSG to find ways where the company could be involved with the sport. The article highlighted how Henry and the rest of the Sox front office attended Sunday’s NASCAR race in Loudon.

Towards the end of the article, Bailey opened up a hornet’s nest with Boston sports fan. He noted, "For the Red Sox, these non baseball opportunities are particularly valuable because they are not subject to Major League Baseball's revenue-sharing tax. But they also raise dicey questions for Henry & Co. For instance, if the Red Sox owners can spend $50 million on a NASCAR team, why can the Yankees outspend them by $75 million a year for players? And why should taxpayers kick in for improvements around Fenway Park?

Some of the limited partners have been asking questions, too. If the Red Sox can spend big on a NASCAR team and Kenmore Square real estate – thanks to revenue that has exploded by $100 million since Henry bought the team in 2001 -- why can't they make distributions to the partners? No one has left the partnership since Henry put the group together, but at least one limited partner has recently explored selling his shares."

Over the last few days, Sox fans have been ranting on WEEI wondering why the Sox don’t spend as much money as the Yankees to win the World Series. The problem is that once you “peel the onion,” there are a plethora of other items on the table.

· Let’s say the Sox spend an additional $50 million dollars on player salaries. That is all fine and dandy, but the team would then have to pay an exuberant revenue-sharing tax. The team is maxed out financially. There are only four or five teams that have a team salary over $100 million. If Bostonians didn’t have such an inferiority complex to the Yankees, I doubt the team would need to spend all this money. On the flip side, they also wouldn’t contend every year.

· New England Sports Ventures, the parent company of the Sox and the other businesses, paid a ridiculous amount of money for the Sox, NESN and everything else. It will take years for the owners to pay down all the loans. They need to find other ways to generate revenue.

· As we know, NASCAR is becoming the most popular sport in America (sorry football fans.) The marketing and sponsorship opportunities are endless. With FSG’s marketing prowess, they could generate some decent revenue if they worked in the sport.

· From a business of sports perspective, it is also a smart move to develop a partnership between New Hampshire International Speedway, NASCAR and the Sox. FSG has the contacts and the power to convince additional sponsors to become partners with the Speedway. How easy do you think it would be to do business with prospective clients if either organization could offer NASCAR or Sox tickets?
I will be surprised if FSG jumps into NASCAR quickly. I heard they were going a different way for the time being, but it is still exciting news. Boston sports fans just need to know the full details before lashing out at the team.


At 11:39 AM, Blogger Patterson said...

NASCAR will never be the most popular sport in America. No way.


Post a Comment

<< Home