The Red Sox are stress testing their empire

When John Henry looks down at the crowd from his owner’s box in Fenway Park, he does not think, “These are my people.” As the lord of feudal Boston, his bottom line is enriching himself. The concept of baseball teams functioning as part profit source for wealthy men and morale booster for the surrounding municipalities has fallen out of favor here in the early 21st century.

The principal owner of one of the most well-known sports franchises in the galaxy, whose personal net worth is valued at $2.5 billion, wants his successful team to cut payroll. You see, the Red Sox won the World Series in 2018 (thank you!), but they spent a lot of money to do so ($240 million!). With a ring in hand — the team’s fourth in 14 years — Henry wanted to bring the franchise back to obscene profitability from its current place of “merely profitable”.

It began with the termination of team president Dave Dombrowski a couple of Sunday nights back. No press conference or expression by the executive team why the change had happened, leaving manager Alex Cora and the players to answer questions by the press. Eventually, Henry made this mealy-mouthed statement:

The greater explanation of these “differences” starts here:

and ends with this:

That’s team CEO Sam Kennedy expressing that it might be difficult for a franchise worth $3.2 billion with stadium revenue and gate receipts of over $700 million to pay a 30% luxury tax on every dollar over $208 million. If the Red Sox payroll stayed the same ($240 million in 2019), that’d be $9.6 million. But there’s also a 12% “surtax” on clubs that exceed the tax between $20-$40 million. That’s an extra $3.84 million.

In order to avoid paying $13.44 million back to Major League Baseball and revenue sharing teams, the Red Sox are considering trading away a 26-year old center fielder who has been the most valuable player after Mike Trout over the past two seasons.

Dave Dombrowksi was hired to swing his big transaction energy around and push the team towards another championship. The Red Sox aren’t dumb. They knew they hired a big spender, but one who got results. When he finally gave them their desired result, they decided they were good and moved on.

Now, yes, Dombrowski spent a lot of “their” money and the team failed to make the playoffs this year. And Dombrowski didn’t do anything one way or the other this offseason to improve the team or set it up for a less painful tax in the near future, either. But which Red Sox shareholder is about to lose their home and their entire net worth if the team generates less profit this year than last year? Is that $13.44 million already spent on John Henry’s secret cloning experiment? Is that the annual dues for the Secret Cabal That Runs Planet Earth?

In many other contexts, terminating an exec who spent money foolishly would stand to reason. In this case, we’re dealing with the Boston Red Sox of Major League Baseball. None of this is reasonable. The sport itself generates $10+ billion in revenue every year. Billions of dollars over dudes in pajamas. We’re not dealing with a normal situation here, which is probably why the team’s forthcoming direction seems so absurdly out of whack. We are already in crazytown.

On the same day the CEO suggested the team would cut ties with a generational talent to boost dividend forecasts, Sam Kennedy expressed anticipation of a “modest” increase in ticket prices. This comes a day after this news:

Fans drive sports franchises. We know that Baseball has been cultivating various non-fan revenue sources over the years, and now it would appear that we’re approaching a huge transition point in professional sports. The Red Sox are perhaps the first team to make the obvious move towards luxury item.

On an emotional level, it certainly feels like John Henry and the Red Sox want to finally price out the people who would be most vocal about the team trimming payroll to increase profitability. Doesn’t it make more sense for a lord to mingle with other lords, or at least lord sympathizers?

There are certainly other ways the Red Sox could go about radically overhauling their payroll to provide their shareholders more value, but the sloppy way they’ve handled the post-Dombrowski era seems almost intentional. Maybe they want to be loathed in order to justify their drastic actions — look what you made me do!

We know the motive is profit. Team ownership is gambling that Red Sox fans are hooked on the product enough to let them do whatever they want and in a way that’s as dumb and gross as possible. One of the most valuable sports franchises in the galaxy won’t be waylaid by naked avarice and it won’t be felled by disgruntled fans, either.

It would seem a reckless strategy. Maybe John Henry is chasing the high of winning another championship by making as many people as he can be as miserable as possible just with the power of his mind/decision-making. Or maybe the orgiastic drive of wealth accumulation means you find out how to get the money first and never concern yourself with the consequences.

On the other hand, John Henry & co. are wicked smart. They’re more successful and richer than any of us will ever be. They know what they’re doing. They’re playing nine-dimensional chess while we’re sitting over here trying to figure out how to get health care! We’re idiots just trying to keep our pants up and our mouths closed so’s we don’t swallow flies, y’know?