The owners of the Boston Red Sox are interested in buying part or all of a professional sports team to boost revenue and put the Sox in a better financial position to win a World Series, a team official said yesterday.
''We're very aggressively looking at investments in a variety of different sports," said Mike Dee, the team's chief operating officer and president of the newly formed Fenway Sports Group. The group, a Red Sox spinoff, is molding a broader sports, media and marketing empire around the storied franchise.
The team is prohibited under Major League Baseball rules from owning an interest in another baseball team, but Dee said teams in all other leagues are fair game. He said the Red Sox organization is looking for purchasing opportunities that are ''national in scope" but would not elaborate.
Although Dee would not rule anything out, he indicated that a 100 percent purchase of a basketball team, for example, would be unlikely. ''The core business is baseball, and it will always be baseball," he said.
But diversification is clearly on the agenda on Yawkey Way. New England Sports Ventures, the Red Sox parent company, is scheduled to detail today a number of initiatives undertaken or still under review by Fenway Sports Group, which was formed in March.
The announcement is among the strongest signals yet that Red Sox principal owner John W. Henry, former owner of the Florida Marlins, wants to create a Boston empire similiar to George Steinbrenner's in New York. Steinbrenner is principal owner of the New York Yankees, with the richest payroll and one of the best records in baseball. At one point, he simultaneously owned the Yankees while holding an interest in a basketball team, New Jersey Nets, and hockey franchise, New Jersey Devils.
Steinbrenner has succeeded in building revenues with the YES Network, the cable television system for the Yankees and other New York pro and college teams, and Boston is similarly interested in using marketing synergies with other sports to increase the revenue from its 80 percent stake in the New England Sports Network, said Daniel Ladik, a professor at Suffolk University with an expertise in sports marketing.
''These teams are operating more like businesses in a traditional sense, and they are trying to think of bigger revenue streams," Ladik said.
The new venture is expected to break even by the end of 2005 and generate ''tens of millions" in the future, said Dee, declining to release further financial details. Already, the Yankees and the Red Sox generate the highest revenues in the league, respectively $238 million and $190 million in 2003, according to Forbes magazine.
There is another incentive for large-market teams like New York and Boston to diversify: Wealthy clubs must share ballpark gate receipts and baseball-related broadcast money with less successful teams. But they are not required to share nonbaseball-related receipts. ''Clearly, we have interests in developing nonbaseball revenue streams," Dee said.
But the expansion strategy could cause the Red Sox to lose focus, said Robert Madrigal, a professor of sports marketing at the University of Oregon.
''Anything that puts a buck in their pocket so they can buy some pitching is always going to be a good thing," Madrigal said. ''But if they become too ambitious, I think there's definitely possibility of peril."
Boosting baseball revenues is difficult for the Red Sox. Fenway Park is the league's smallest stadium and would be difficult to expand. A construction plan floated by Henry this year calls for adding 5,000 seats, but that would bring capacity to no more than 40,000 fans.
Raising admission prices is a dicey proposition because the Red Sox already have the league's most expensive ticket.
While the Sox did not disclose prospective sports team purchases yesterday, it did provide details of other plans.
For example, Fenway Sports Group, representing Major League Baseball, will sell advertising to sponsors on baseball team web-sites. The group has a separate deal with ANC Sports Enterprises LLC, in New York, to sell time on electronic signs in ballparks and stadiums around the country.
Among the most creative ideas: a new service called FanFoto, operated in partnership with
FanFoto could generate as much as $10,000 to $25,000 per game, Dee said. The service started a couple weeks ago at Fenway and will begin at Turner Field soon. If successful, the group hopes to roll it out at to other stadiums.
The group is also considering the purchase of radio stations in New England that could broadcast Red Sox games.
Additional revenue, said Dee, can make the Red Sox more competitive against the Yankees. In the major leagues, more money means bigger payrolls and better players.
''We want to put ourselves in position to compete every year for the World Series," said Dee. ''We need to look down to the south and that's who we are competing against year in and year out."
Christopher Rowland can be reached at email@example.com.