Red Sox expand their reach in sporting world through Fenway Sports Group Print
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Sunday, 19 August 2007 09:46
MLB Headline News

 BOSTON (AP) -Boston Red Sox executive Mike Dee receives almost a dozen calls during an hourlong lunch at a Fenway Park restaurant, and this is the one that really gets his attention: One of the ballclub's owners went fishing the previous day, with great success.
Dee puts down his lunch - he's eats here so often, the double-decker burger is named after him - and savors the details: Where did they go? How many fish did they catch? When are they going back?
But Dee won't be making a fishing trip any time soon.
Instead, he's off to North Carolina for a NASCAR drivers' meeting; or to New York to discuss online media at the commissioner's office; or down the street to Boston College to help the school capitalize on its move to the high-profile Atlantic Coast Conference.
Like striped bass in Boston Harbor, opportunities abound for Fenway Sports Group, a Red Sox sister company that is expanding the team's marketing reach into college sports, auto racing, golf, concerts and even beach volleyball. The Red Sox famously dubbed the New York Yankees an ``Evil Empire''; in truth, it's on the Boston ballclub that the sun never sets.
``Baseball's always going to be our core business, but it's a mature business. It's going to be harder to squeeze more juice from the orange,'' said Dee, who has a dual role as the Red Sox chief operating officer and the president of Fenway Sports Group. ``I tell people, 'I spend 80 percent of my time with the Red Sox, and the other 80 percent of my time with the Fenway Sports Group.'''
A former national marketing director for a paint company, Dee spent eight years at the San Diego Padres before following Red Sox chairman Tom Werner and president Larry Lucchino to Boston when Florida financier John Henry bought the team in 2002.
The Red Sox have done better than OK since then, winning the World Series in '04 to end an 86-year title drought, while selling out every game since May 15, 2003; ballpark ads and sponsorships are also quickly snapped up.
According to Forbes magazine, the value of the Red Sox alone - not counting Fenway Park or their TV network - has doubled, from $339 million in 2001 to $724 million in this year's accounting. If the Red Sox were strictly in the baseball business, this would be the time for the marketing folks to relax.
But major league baseball has a luxury tax that essentially forces big money teams to send 40 cents of every new dollar to the have-nots. So when Henry looked at ways to grow his business, he had to look outside the sport.
``With revenue sharing, we were looking at trying to draw revenue from other areas that are untaxed. We really had to leave the sport of baseball to do that,'' Henry said this summer after unveiling a baseball-themed NASCAR entry at Fenway Park. ``We've sold out about everything we can sell here. But we have tremendously creative people looking for additional challenges.''
Fenway Sports Group was born, and Dee was given wide latitude to look throughout sports and entertainment for new business opportunities.
``That's a pretty broad file,'' Dee acknowledged, ticking off the things he looks for in new businesses. ``It should be a tier 1 brand. The greatest risk would be a diminution of the Red Sox brand.''
For FSG, the Red Sox are ``the calling card,'' but not the product.
``It's a door-opener,'' said Sam Kennedy, who like Dee has a role with both the Red Sox and FSG. ``Just because you represent the Red Sox doesn't mean someone's going to buy a Boston College sponsorship. And just because your office is in Fenway Park doesn't mean somebody's going to buy a Devil Rays sponsorship.''
But the FSG staff can take meetings that the ballclubs can't. Although the billboards at Fenway Park might be sold out for the season, a company can make a smaller buy at Boston College basketball; if Bank of America has locked up the financial services sponsorship of the Red Sox, FSG can still work with Deutsche Bank on the PGA Tour, or Sovereign Bank at BC.
Fenway Sports Group is owned by New England Sports Ventures, a partnership that also owns the Red Sox and its television network, NESN. The offshoot got its feet wet with FanFoto, which sent photographers out in Fenway - and soon nine other major league ballparks - and sold the pictures to the fans.
Other projects include a marketing deal with BC that was recently extended for nine more years. FSG is also a partner in the Deutsche Bank Championship, the PGA Tour stop outside of Boston.
But the company's profile expanded when it bought half of NASCAR's Roush Racing - ``a watershed moment,'' Dee said.
``Until that point, the only thing we were putting at risk was really our reputation,'' he said.
For Henry, the goal in racing is the same as the one in baseball: to win a championship. His new partner, Jack Roush, got a cash infusion that gave him the security and stability to compete as that sport grows.
``They have got the legs and the foundation so that I can weather a storm,'' Roush said.
Potential sponsors now see the racing team as a more national opportunity. Looking out at the Fenway Park field, Roush said, ``This wouldn't have occurred if it hadn't been for the affiliation with FSG.''
Fenway Sports Group, which recently sold its interest in FanFoto at a profit, is working with the Celtics and Bruins on postgame concerts that would help fill the new Boston Garden on nights when the hometown teams can't. FSG also sells online advertising for all 30 teams' Web sites through major league baseball advanced media; putting it in the odd position of drawing revenue from the Web sites of rivals.
Could a Yankee fan who clicks on an online ad be indirectly subsidizing their archrivals?
``There's no intention to take Roush Fenway revenue and move it over to the Red Sox,'' Henry said.
FSG was profitable after two years, Dee said. ``And three years later, I think the partners would tell you it's hard to imagine NESV without FSG,'' he said.
``But what makes FSG work is the current trading level of the Red Sox,'' Dee said. ``If I was in a much more mundane business, I wouldn't get 500 internship applications to sell paint.''
 

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