How Fenway Became About Much More Than Baseball

Boston Sports Brand Has Global Aspirations, As Well As Soccer, Nascar and Basketball Connections

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David Ortiz' statement to the world after the terrorism bombings in Boston -- "this is our fucking city" -- is emblematic of Red Sox fans' personalities. They're passionate, sometimes a little salty and extremely loyal. In fact, the Red Sox' home game sellout streak that ended last month had stretched for 820 home games over 10 years, the longest such run in professional sports.

Executives predicted the sellouts would end this season, even though some Boston media outlets argued it ended last season citing summer evenings with empty Fenway seats. Still, the end of the streak was also something of a relief to management.

Sam Kennedy
Sam Kennedy

"It's been a pretty amazing decade," said Sam Kennedy, the chief operating officer of the Boston Red Sox and president of Fenway Sports Management. "It's a very fragile thing to have a streak like that. And it's easier when you're winning an average of 92, 93 games a season. Last year we had a disastrous season only winning 69 games, plus a lot of drama off the field and injuries. ...At the end of the day, we're dealing with human capital."

Yet even as Fenway hits the end of its sellout streak, it's already looking ahead. Not just to a summer of baseball and a potential pennant run, but to the diversification and globalization of the Fenway brand. Because modern-day Fenway is more than just a ballpark with a giant green wall and a nation of passionate New England fans.

The 101-year-old Fenway is home to the Boston Red Sox of course, but it's also the name of the umbrella brand Fenway Sports Group that holds a diverse set of interests in the Sox, New England Sports Network, the Liverpool Football Club, Nascar's Roush Fenway Racing team, and basketball star LeBron James.

The group owns 80% of the New England Sports Network, all of Liverpool (although Mr. James has a minority ownership interest), and 50% of the Rousch racing team, as well as manages Mr. James' endorsement deals and entertainment partnerships. Fenway Sports is led by principal owner, hedge-fund billionaire John Henry and chairman, TV producer and businessman Tom Werner.

Mr. Kennedy, 39, oversees the wholly-owned Fenway Sports Management group, including all marketing activities. FSM began by marketing and managing the Red Sox and Fenway brands, but quickly evolved into a bigger sports marketing agency as it picked up new brands and ownership interests. Mr. Kennedy has been with the Red Sox since 2002, and took over as head of FSM in 2009.

While the Roush Nascar racing deal in 2007 and Liverpool soccer team buyout in 2010 were departures from FSM's traditional "America's game" background, it was the 2011 deal struck with Mr. James that has been its most unusual.

In late 2010, the NBA basketball star and his agent Maverick Carter were looking for a marketing partner, as well as a little help burnishing Mr. James' image following the disastrous departure from the Cleveland Cavaliers and the seemingly self-congratulatory "The Decision" ESPN TV show about his new choice. Mr. James also wanted international ties, which Fenway could provide with its then-recent acquisition of Liverpool. In return for FSM's oversight of his estimated $40 million in brand partnerships, Mr. James received an undisclosed stake in Liverpool FC. Fenway has since added brands including Samsung Galaxy and Dunkin' Donuts to Mr. James' core group of about eight "key" partnerships, Mr. Kennedy said.

However, as disparate as the different sports interests may seem, they are in fact tied together by Fenway's desire to be a global brand. Liverpool added the European and Asian exposure -- more than half of Liverpool's revenue from media rights come from outside the U.K. -- for brand partners like Dunkin' Brands and New Balance, as well as its other sports like the Red Sox and Roush Fenway racing. It also added global audience heft -- Liverpool FC games draw global TV audiences in the hundreds of millions, while even World Series games are now lucky to draw more than 20 million.

"Our goal is to establish relationships with blue chip companies' CMOs and CEOs around the world to represent the interests we own and operate," Mr. Kennedy said.

FSM's global strategy and diversification play well against the increasingly dwindling draw of American baseball. While the Red Sox are No. 24 on Forbes Most Valued Sports Team list, valued at $1 billion, and best Liverpool handily, the attendance and TV viewing comps don't compare. And neither do other factors, like youngsters' interest.

According to the National Sporting Goods Association, the number of kids between ages 7 and 17 who played baseball (or softball) dropped by 33% from 2000 to 2011. In 2010, 4.4 million kids ages 7 to 11 played soccer versus just 3.4 million who played baseball.

Still, as Mr. Kennedy contends, it's the content of all the FSM sports, games and entertainment that is its most valuable asset.

"The single biggest development or change has been the exploding value of content. If you look around at the value of media rights deals, the content for American baseball and global soccer -- really all sports and some big entertainment events -- has gone through the roof," he said. "It is one of the only [pieces of] content that needs to be consumed live. People aren't DVR-ing those events."

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