Nearly every baseball organization has invested in a new stadium to showcase its product. Yet Fenway Park is celebrating its 100th anniversary, and this ownership team made a bold move to upgrade the facility rather than build a new one. Given the constraints, was this the optimal choice, and how does a business leader attain the vision to know that answer?
Werner: Fenway Park is a Boston jewel and a second home
for Red Sox fans. From day one, the preservation of Fenway has been of paramount importance to our ownership group. We made a sacred commitment to the fans and city to preserve and build on all that is good about Fenway. The ballpark is renowned for its architectural and aesthetic charm, and our job is to protect and re-energize it to ensure that our core story is never-ending. We recently completed a 10-year plan for major improvements that included more seating sections and standing room, wide-open concourses, a reinforced structure, increased food-and-beverage options and improved fan amenities. The addition of seats to the top of the Green Monster is a good example. They made the park even more special, providing fans with a unique vantage point from which to view a game while providing us with an additional revenue stream. In fact, USA Today rated the Monster seats as the best seats in all of Major League Baseball in 2008.
Being in the same division as the New York Yankees is a constant challenge but also a welcome advantage. What changes for you having to address a competitor of that magnitude, as opposed to being in the NL West in San Diego? Does this level of competition make you desire a salary cap in baseball?
Werner: The Yankees have a significant competitive ad-
vantage merely by virtue of the market they operate in, the largest in the U.S. That said, our division is one of the toughest in baseball from top to bottom. It’s not just the Yankees we have to contend with – the Rays, the Blue Jays and Orioles all have made a significant investment in player personnel and as a result, have become highly competitive ball clubs. That said, competition as a whole is as strong as it’s ever been. Major League Baseball is as popular as ever, and the game is incredibly healthy as a result. Take this past off-season. We had four teams commit more than $100 million to a single free agent, all outside of the American League East, including the Angels (Albert Pujols at $240 million), Marlins (Jose Reyes at $106 million), Rangers (Yu Darvish at $111 million) and Tigers (Prince Fielder at $214 million). With the Padres, we were playing in the 26thlargest market in baseball, so clearly there’s a difference in approach with the Red Sox. That is reflected
Briefings on Talent & Leadership
in the level of commitment the club has made not just to the Major League payroll, but to amateur signing bonuses, to international signings — anything related to the on-field product. We’re going to have the second-highest payroll in baseball this year, and I think our 2012 budget will be the highest budget in Red Sox history. That said, our experience with the Padres taught valuable lessons on how to compete and acquire talent without having the benefit of big budgets, and we’ve been able to apply that here, while also having the flexibility to spend on the players we feel will make the team more competitive. To remain competitive it’s critical that we invest not only in the Major League club, but also in scouting and our farm system, and that we spend wisely on free agents. There’s just less margin for error as teams like the Dodgers, Angels, Giants and of course the Yankees are engaged in discussions on all the major free agents. The role of ancillary businesses in sports ownership: Is a cable television outlet a requirement to fuel the financing of any successful sports franchise?
Werner: Baseball is flourishing thanks to cable companies’ desire for live baseball programming, and the fact that rights fees paid by cable television channels are behind the growth in team values. By owning an equity stake in a regional sports network, it allows us to present our product to our fan base, but also receive an additional revenue stream. Fenway Sports Group pioneered this model when we acquired a majority ownership of New England Sports Network (N.E.S.N.). Revenue generated from a regional sports network is predictable and stable and immensely beneficial to any successful sports franchise. We now televise almost 300 live events each year, including Red Sox and Bruins games. Since 2001, N.E.S.N. has more than doubled the amount of original programming it airs, and it reaches over 4 million homes throughout the six-state New England region, and nationally as N.E.S.N. National on all major satellite providers. Can these leadership lessons be transferred to the greater world of business?
Werner: Leadership skills are easily transferrable from sport to business, where it is just as complex and competitive. In both sport and business, a strong leader is efficient, goal-oriented, organized, tenacious and possesses the ability to strategize — and perhaps most importantly, he or she must delegate effectively. We’ve been successful in Boston because we’ve been able to attract the right people for the right positions and have given them autonomy to lead and make decisions while providing them with feedback and guidance. We had great success with our manager, who was there for eight years, and our general
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