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The Red Sox Don’t Need John Henry and Tom Werner


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New York Yankees v Boston Red Sox Photo By Winslow Townson/Getty Images

Joan Kroc was better than all of us. As the wife of Ray Kroc, the founder of McDonalds, she had more money than she could ever spend. There are plenty of billionaires and multi-millionaires who fit that description. But, unlike Joan Kroc, most members of the Super PAC-funding class operate under the delusion that they actually deserve their money, that divine providence has seen fit to make them a master of the universe. So they don’t do what Joan did, which was spend most of her adult life giving the money away.

The Salvation Army was her favorite cause. In 1998, she spent $87 million to turn an abandoned grocery store in the San Diego neighborhood of Rolando Park into a community center. To be clear: this is not just some gym with a multi-purpose room and ping-pong tables; this is a massive complex that includes a pool, ice skating rink, theater, church, pre-school, art school, and more. When she died, she left $1.8 billion to the Salvation Army — then the single largest donation in human history — so it could build 24 more all across the country.

She once anonymously gave $15 million to the people of Grand Forks after a devastating flood. She gave $60 million to the Ronald McDonald House. She made global nuclear disarmament a personal goal and spent $100 million dollars building peace centers on the campuses of Notre Dame and the University of San Diego. She completely transformed the public media landscape by giving $222 million to NPR. Like I said: better than all of us.

And she also, briefly, owned a Major League Baseball team.

Joan Kroc didn’t have much interest in baseball. When her husband first told her he was buying the San Diego Padres, she reportedly thought he was talking about a monastery. But she quickly came to understand the deep connection between the team the community, and that was something she did take an interest in. And when she wanted to give up the team after taking sole ownership of it for just a few years following her husband’s death — years during which she became icon of the Padres community, doing things like establishing trust funds for the children of play-by-play man Ted Leitner — she had an idea:

What if a baseball team didn’t have to belong to any one owner? What if it could belong to the community that loved and nurtured it?

Let’s pause for a moment and travel 6,000 miles to the east of San Diego, and let’s look at a picture:

This is the Santiago Bernabéu Stadium in Madrid, Spain, the home of the fabulously wealthy Real Madrid CF, the most famous and successful team in any sport in the entire world. It’s named after a fascist, which is unfortunate but beside the point, so let’s conveniently ignore that fact for now.

Originally built in 1947, the Bernabéu recently underwent a €1 billion renovation that added a retractable roof, a retractable pitch, and increased capacity to over 85,000. The renovations were completed last year, just in time for the stadium to serve as the backdrop to the superstar ascension of Jude Bellingham, the best young player in the world, whom Real recently purchased from Borussia Dortmund for a transfer fee that exceeded $145 million. This fee made Bellingham the second-most expensive player of all-time, and it doesn’t even include the nearly $23 million per year that Real pays to Bellingham as a salary.

Paying astronomical amounts of money for the best players in the world is nothing new for Real Madrid. That has essentially been their modus operandi for the past 75 years, and it has worked out exceedingly well for them. Real has won the league 35 times in its history, and it’s won the European Cup/Champions League — the most prestigious competition in global club soccer — a record 14 times, twice as many titles as runners-up AC Milan.

What wise and generous owner funds these stadium renovations and record-breaking transfer fees? The answer is there isn’t one: Real Madrid — the most successful and famous sports team in the entire world — doesn’t have an owner. The club is entirely controlled by its fans, approximately 90,000 of them, who pay dues totaling just €150 per year for the right to elect club officers and a board or directors. The club is run as a non-profit, with all revenue generated by the club put right back into it.

This model of fan-control isn’t unusual in international soccer. Real’s principal rival, the nearly equally famous and successful Barcelona, is also owned and controlled by the fans, as is Athletic Bilbao (eight-time league champions) and Osasuna (the most recent champions of the Copa del Rey). In Germany, meanwhile, it is required that at least 50.1% of every single club in the country be controlled by supporters. This model isn’t solely limited to soccer, either. Almost every club in the Australian Football League — the 14th-most valuable sports league in the world — is owned by the fans. The model even exists here, in the form of the Green Bay Packers.

Minnesota Vikings vs Green Bay Packers - November 21, 2005
Pictured: the principal shareholders of Green Bay Packers, Inc.
Photo by Steve Levin/Getty Images

Has fan ownership impeded success for these teams in any way, either on the field or on the balance sheet? The answer, quite evidently, is no. Which raises the question: do we even need owners at all?

In a capitalist system, ownership is supposed to serve two primary purposes: provide the money to fund the operation, and perform executive decision-making funcions. Executive decision-making, as we see in the case of Real Madrid and every single public company in the world, can be performed collectively. The more interesting and pressing question is that of money.

We don’t actually know for certain how much personal capital baseball owners provide to their baseball teams, for the simple reason that the owners don’t want us to know. They don’t release their books to the public; they don’t even release them to the players union during CBA negotiations, when they spend months crying poor and practicing their golf swings while depriving the general public of baseball. But here’s what the publicly available evidence tells us:

Baseball owners put almost none of their own money into their baseball teams.

We know this for two reasons. First, the teams themselves are — as healthy going concerns in an industry that has done nothing but reward everyone who has participated in it over the past thirty years — fabulously wealthy on their own merits. In its most recent financial disclosure, Atlanta Braves Holdings, Inc. (the only publicly-held baseball team and, thus, the only team with publicly-available financial information) reported over $528 million in baseball revenue alone. This total covers only the first nine months of 2023 and excludes additional revenue generated by ballpark-adjacent real estate development. This is revenue generated against a player payroll of just $203 million, by a team that charged just the 12th-highest ticket prices on average and, unlike the Red Sox, doesn’t own its own TV network.

What the Braves financials show us first and foremost is that the owners don’t need to provide one single cent to cover the operating costs of running a ball club. And when fans trot out some variation of “it’s not my money” when discussing a potential free agent signing, they should remember these numbers and realize that it isn’t the owner’s money, either; it’s the team’s. In other words: the Red Sox are not rich because John Henry and Tom Werner are rich; the Red Sox are rich because the Red Sox are rich — because Red Sox fans have made the Red Sox rich.

But that’s just the operating costs. What about capital investment? Here, the owners have rigged the system even further in their favor because, by-and-large, neither the owners, nor the teams cover capital investment costs. Instead, the American tax-payers do.

As of 2020, the American public had spent approximately $5.3 billion building and renovating MLB ballparks — $5.3 billion that tax-payers have effectively gifted to the owners, with little to no public benefit in return. The Red Sox are not exempt from this merely by virtue of playing in a ballpark that was built 112 years ago. When it came time to build a new and more profitable Spring Training facility, Henry and Werner didn’t spend a dime, as the team used the threat of moving to Sarasota to extract $78 million from Lee County to build JetBlue Park. And the public has paid for a good chunk of that 112-year-old ballpark in Boston, too, in the form of a $12.5 million grant from the state and approximately $80 million worth of tax credits. Bear in mind that stadium construction costs are hardly the only public benefit the owners receive. Thanks to the antitrust exemption and the Sports Broadcasting Act of 1961, MLB owners hold a government-permitted monopoly over the entire baseball industry. Major League Baseball is effectively a publicly-subsidized business — dare I say a socialized business — but one in which the profits are funneled into private hands.

The principal purpose of ownership is to fund the business. But in Major League Baseball, the owners don’t even really do that.

There’s something even more odious than owners profiting off teams they don’t actually invest in, though: owners diverting a team’s revenue elsewhere. And this is where Red Sox fans suddenly have cause for alarm.

Following the disaster that was Winter Weekend 2024, Peter Gammons, the legendary baseball writer and the man who connected Craig Breslow to the Red Sox weeks before anyone else did, dropped this word of warning on Red Sox Nation:

Did Fenway Sports Group’s portfolio take a hit, and are the Red Sox now being used to cover that shortfall? We will never know the answer to this; John Henry and Tom Werner will probably take it to their graves. But there are plenty of reasons to believe that their non-Red Sox investments are not looking too hot right now.

Evidence began to surface last year that FSG wanted to either outright sell or secure additional investment in Liverpool Football Club, which, despite it’s massive global footprint, operates with finer profit margins than American sports teams do, due to structural differences that make European football teams compete in a more cutthroat economic environment. Moreover, because the tax-payer funded stadium scam doesn’t fly in Europe, when Liverpool wanted to renovate its century-old stadium, Henry and Werner did actually have to foot the bill themselves. Back in 2017, FSG loaned Liverpool £110 million (approximately $140 million USD) to cover stadium expansion costs. This project has not gone smoothly, thanks in part to the COVID-19 pandemic, and, over six years later, Liverpool FC still owes FSG £71.4 million (approximately $90 million USD), in addition to other debts owed to outside parties.

Meanwhile, FSG’s hockey outfit, the Pittsburgh Penguins, were one of several teams whose TV rights were thrown into limbo when Warner Brothers shut down its entire line of regional sports networks last year. This forced the team to purchase its own network, to be managed by NESN, in a deal that took effect on January 1 of this year. All of this takes place against the backdrop of FSG’s ongoing efforts to purchase an NFL team or expansion NBA team, and take on a $2 billion real estate development project surrounding Fenway Park.

Notably, this is all happening shortly after the composition of FSG changed in a meaningful way. If you recall, back in 2020 FSG explored the option of going public via a merger with a special purpose acquisition group launched by RedBird Capital, a private investment firm that owns assets across a wide variety of industries. The plan to go public was eventually scrapped and, instead, RedBird simply directly purchased a $750 million stake in FSG. Since 2021, the third-largest owner of the Red Sox has been a faceless investment firm with no connection to Boston or the Red Sox. Did they make their initial investment with certain expectations of a return that FSG is now struggling to meet?

Having posed these questions, let me now be clear about something: I believe that John Henry has been the best owner in North American sports over the past 22 years. Full stop. He saved and improved Fenway Park for generations to come. He raised the standard of the Red Sox as an organization both on the field and off. I would be terrified about the future of the team if he put it up for sale.

But therein lies the problem: if even the best owner in sports can act as a detrimnent to a team’s success because the profit motive demands he do so, then the entire model of sports team ownership is fundamentally broken.

Joan Kroc didn’t hold onto the Padres for very long. As I said, she wasn’t even a baseball fan; it was her husband Ray who loved the game. He initially bought the team in order to prevent it from moving to Washington, DC, calling the Padres “an expensive hobby.”

Just two years after Ray died in 1984, Joan began to contemplate giving the team up. But by that time, she appreciated and valued the connection that exists between a baseball team and the community it plays in. She didn’t want the team to end up in the hands of someone who didn’t care for it the way she and her husband did, or, even worse, someone who would rip it out of San Diego.

So Joan Kroc got an idea. She wouldn’t sell the team. Instead, she would do what she did best: she would give it away, directly to the people of San Diego. Under her proposal, the city would take ownership of the Padres along with a $100 million trust to fund ongoing operations. The Padres would be run as a non-profit entity. Like Real Madrid and the Green Bay Pakcers, all revenue generated by the team would go right back into it.

She met with the mayor and the city manager. She starting drawing up the paperwork. She was weeks away from making the Padres just the second community-owned major sports team in North America. . .

And then the other MLB owners stepped in and blocked it from happening. They couldn’t let America see that a team could be run as a non-profit. They couldn’t let America imagine that a sports team didn’t need an owner.

So Joan Kroc was forced to sell the team against her will. In 1990, she found a buyer: a group of investors led by a TV producer who’d made his fortune off The Cosby Show and Roseanne.

That’s how Tom Werner became a baseball owner.