When the Boston Red Sox were sold a consortium headed by John Henry, Tom Werner, and Larry Lucchino in 2002, considerable talk centered around the ability of the club to continue the arms race with the New York Yankees. Prior ownership had said repeatedly that for the club to remain competitive, a new Fenway Park would have to be built.
What Henry, Werner, and Lucchino did instead was evaluate Fenway, and its underlying revenue streams and decided that renovation -- rather than a new facility -- would be the order of the day.
As part of that evaluation, working to get the most revenues out of Fenway had to have been a key point. To that end, sponsorships play an integral key role with increasing revenue streams, and Sam Kennedy has been the man charged with making that happen as the Senior Vice President /Corporate Partnerships.
Flash-forward to 2004. The Red Sox win the World Series for the first time in 86 years, Fenway Park is in the midst of renovation, and New England Sports Ventures (NESV), which owns the Boston Red Sox and eighty percent of New England Sports Network (NESN), launched Fenway Sports Group (FSG), a sports marketing and consulting firm. FSG may redefine how some MLB owners choose to invest their earnings, and grow brand by cross-promotion. FSG is engaging in everything from a ownership of a NASCAR team (Roush Fenway Racing), to a marketing and sponsorship partnership agreement with Boston College athletics in which FSG's involvement has fueled a large expansion of the athletic department's corporate sponsor base, to FSG co-owning an AVP Pro Beach Volleyball tournament, and other ventures such as a partnership with the PGA Tour's Deutsche Bank Championship. FSG and the Red Sox remain closely tied, but that is changing as FSG continues to grow and mature.
Leading the efforts at FSG on the sponsorship front, NESV tapped Sam Kennedy as the Executive VP/Sales.
Kennedy oversees sponsorships and tickets for the Red Sox. In 2003, he helped conceive and execute the successful sales and marketing plan for the new "Legends Suite" at Fenway Park, the Dugout Seats innovation, and new advertising positions above the Green Monster. In 2004 Kennedy secured a long-term partnership with Anheuser-Busch that was instrumental in the creation of the new Right Field Roof seats at Fenway. In 2005 he was charged with developing the sales and marketing plan for the new club seats at Fenway Park that debuted in 2006. Kennedy also secured long term naming rights deals for the EMC Club and the State Street Pavilion at Fenway Park. He also serves as the Red Sox’s marketing liaison to Major League Baseball.
We caught up with Kennedy just after the Red Sox won their second World Series championship in four years. Topics include the current state of sponsorships for Red Sox, whether there will be more ads on the Green Monster, how the renovation to Fenway plays with Kennedy’s sponsorship efforts, how NESN fits into cross promotion, FSG’s possible interest in other acquisitions, including a minor league baseball team, how he balances between the Red Sox and FSG, and a whole lot more. - Maury Brown
Maury Brown for the Business of Sports Network: When you came over from the Padres in 2002 how would you describe the state of sponsorships for the Red Sox organization?
Sam Kennedy: At the time I think it was extremely underdeveloped. We came into a situation where the team was owned by a charitable trust in the Yawkey Foundation so there wasn’t a real focus on sponsorship. I think the prior regime did a great job on cost control but they weren’t as revenue focused as our ownership group is. There was a lot of opportunity to grow, to say the least. I think we had at least 30 corporate sponsors at the time; maybe even less than that. Today we have about 95, so its grown quite dramatically.
Bizball: Given the recent World Series wins in 2004 and this year, have the Red Sox neared a saturation level with being able to place sponsors at Fenway? Are you getting near that point?
Kennedy: I don’t think we are quite there. I think we have a lot of room because sponsorship and marketing partnerships between teams and corporate brands—corporate America—are really, in my opinion, only limited by your creativity and the creativity of the brands that you are working with.
For example, of the 95 corporate sponsors we have, I’d say about half of them have identification inside of Fenway Park through signage, and the other half are really marketing relationships, in what’s defined as our home territory, in the six New England States where advertisers use the Red Sox Brand to build promotions and hopefully draw business for them throughout the year. So there’s a lot of activity that I think we can focus on outside of Fenway, however it is getting to the point where we have to be care not to have too many relationships where we devalue the marketing and kind of exclusivity that the companies that we do have relationships with enjoy. So it is a balancing act and that’s what kind of led to the creation of FSG (Fenway Sports Group) back in 2004.
Bizball: Could we see more ads on the Green Monster?
Kennedy: I think we are close to filling it. Each offseason, we have a very... I would say "exceeded" may be too strong of a word, but we can use that word, heated debate amongst the front office. We call it an Art Committee that meets regularly throughout the offseason and that’s chaired by Larry Lucchino our President and CEO. He’s the chairman of our Art Committee. And those of us on the revenue side are constantly pushing him to consider new opportunities. So, he walks the line between balancing the proper sort of look and feel of Fenway Park with the revenue demands that we have. He makes the final call on all the advertising that goes into Fenway and I think he has, as you can tell, since 2002 to 2007 been very, very aggressive in terms of additions inside the ballpark and I don’t think we’re done yet. I think we have a few more, kind of high profile locations that we have in mind. We’ve taken an incremental approach each year, kind of added stuff here and there. I think by 2012, you’ll probably see a fully preserved and renovated Fenway Park. The advertising plan will probably reflect that as well.
Bizball: Do you foresee any sponsorship possibilities with the next phase of renovation to Fenway?
Kennedy: Yes, we’re very, very lucky in that the business operation of our organization is very cohesive and we sit down with Janet Marie Smith (read The Biz of Baseball interview with Janet Marie Smith) and the architects who put the plans together. For example when we did the right field roof in 2004 we had lots of planning and design meetings in advance of the construction and worked together with her to figure out what type of marketing opportunities there would be and that lead to the Budweiser deal that we were able to negotiate with Anheuser Busch. The same was true when we did the club seats renovation and added the EMC club and the state street pavilion. Those are all examples of getting in early, getting her in front of clients who were pitching naming rights opportunities right or just signage opportunities to, because when you think about it its going to be a ten year project. We have the advantage or time to think and plan and incorporate advertisers into the new areas. So this year we have the edition of new seats continuing along the pavilion level and we have some new suites going in so there will be all sorts of sponsorship opportunities. Were hoping to add a field box club area for our field box ticket holders, we don’t know where its going to be yet, its probably a 2009 issue but we are already starting to think about potential brands that will fit with that like a luxury automobile or something of that nature.
Bizball: In working with client representation at FSG, such as Boston College Athletics, AVP Pro Beach Volleyball, or the Deutsche Bank Championship, how much effort is placed in leveraging other New England Sports Ventures assets? Clearly, this has been part of the current properties that have been purchased in Roush Fenway Racing with the Red Sox paint scheme and logos on the 99 car. Is NESN a key consideration, as well? How does that fit into the equation?
Kennedy: Yes. The short answer is yes, we do. I think it was probably earlier on in our development, it was a much bigger part of our leverage where we were out talking to clients about the Deutsche Bank Championship or Boston College or MLB.com or any of the other properties that we’ve worked with. When pitching/consulting clients, we would typically lead with the Red Sox and that’s how we would get in the door if you will, but more and more FSG is becoming larger and larger. I think we have over 20 fulltime employees and there is less and less of us who are shared employees. I think there are only 5 or 6 of us total. So it’s somewhat gratifying to see FSG standing on its’ own, but we will always, because of the common ownership and the physical proximity to the Red Sox, you know the Fenway Sports Group offices are across the street from Fenway Park. It does give us a competitive advantage in our selling efforts to utilize the playground of Fenway in entertaining and hospitality and things like that, but what were starting to learn as we go out, especially to grow our consulting practice, Fortune 500 Brands don’t really care that you work for the company that owns the Boston Red Sox or NESN. We are in the “People Business” and they want people that are able to deliver against the needs that they have for their marketing and advertising. So it’s a nice door opener. It’s something we have definitely used over the last 3 years, but again I think FSG is starting to stand on its own more and more.
Bizball: It’s been reported that FSG is preparing to jump back into the properties acquisition game. There had been talk of FSG having interest in New Hampshire International Speedway. How would you characterize the talks on New Hampshire International and from a sponsorship perspective, how tough would it be to gain revenues at a facility that only hosts NASCAR twice a year?
Kennedy: We are unfortunately out of that chase. SMI announced that they are acquiring the track. It would have been great opportunity for us but either we didn’t act quickly enough or we were focused on the World Series and other things but the deal got done with someone else and I’m sure the economic return is there for them, but its something that we were looking at, we did have interest in but it went in another direction.
Bizball: There also has been talk of FSG possibly purchasing a Carolina League minor league club. Can you comment on this possible acquisition?
Kennedy: I can’t talk about it in detail, other than we do have an interest in Minor League Baseball. The business principles are very strong and it’s an area of expertise we have in terms of operating baseball teams and franchises. And so, we are actively looking at opportunities in Minor League Baseball.
Bizball: Misters Henry, Werner, and Lucchino are doing something entirely different than any other MLB owners are doing with FSG. While not every club is in the position to do what they have done with FSG, do you envision any other clubs looking at your successes and considering doing the same?
Kennedy: Yeah, you know I think so. It’s really a credit to those three guys. John [Henry], Tom [Werner] and Larry [Lucchino] are successful business people – John and Tom in other businesses that have came in – and had great success in baseball. Larry’s a lifetime Hall of Fame, baseball executive, but at the core the three of them are really entrepreneurs. I think those of us that have worked for them are lucky to have that entrepreneurial streak in them and it allows those of us who what to act up entrepreneurially to do so in our baseball life. So I think the creation of FSG and this business model was the perfect mix – sort of those three entrepreneurial thinking managing partners, coupled with the management team – who had some success off the field in our day to day business operations. And it is something that absolutely can be replicated in other markets.
I will tell you from living it the last 3 to 4 years it is tough, having two jobs and you really have to keep your eye on the ball on the core business which of course is the Red Sox. I think that other teams with great brand recognition and visibility like the New York Yankees or the Los Angeles Dodgers or Chicago Cubs, it is easier for those brands probably than some of the smaller market clubs because they do have great leverage with the advertising community, regionally and nationally, to get some early victories. So I would not be surprised to see other sports marketing companies coming out of baseball team operations. It’s a model that seems to work and I would not be surprised to see it.
Bizball: FSG is one of dozen agencies that is vying to become the first national sports marketing agency of record for Dunkin’ Donuts. Do you see advantages of having them as a major sponsor of the Red Sox?
Kennedy: I don’t. I wish I could say that I did. If anything, it may be a disadvantage. I think that we are so close with Dunkin’ on the sales side in terms of representing assets that we have sold them. We sold them NESN advertising. We sold them Fenway Park advertising. We sold them Redsox.com advertising. We sold them Boston College advertising. I think were actually in an uphill battle on that one because I think the perception inside the walls there maybe that we are a baseball team posing as a sports marketing promotional agency, when in fact that’s not the case. Again, we’ve got hundreds of years of combined experience inside the walls of FSG in terms of brand and promotional activities. FSG has had a hard time of shaking the Red Sox identity and image so I think there are other agencies that probably have a leg up on us because of the longevity and history and experience. We are only three-years-old and I think that works against us when were in these competitive RFP (Request For Proposal) situations. We’ll see how it plays out, I certainly hopes were successful in getting the business, but I think it’s an uphill battle.
Bizball: There was talk at one point of Mike Dee possibly moving back to the Red Sox fulltime as FSG matured. How would you characterize the relationship between FSG and the Red Sox? Do you foresee the ability to have key members of the staff, such as yourself, move off from doing double-duty between the two entities?
Kennedy: I think anything is possible as the evolution and growth of the business occurs. It would be hard for me to imagine Mike or me not involved with FSG just because it is something we poured our heart and soul into over the last 3 to 4 years, but it may be necessary. It may be business conditions or the climate changed at Red Sox where our 100% attention and focus is needed there. I don’t anticipate that happening anytime soon, but again things could change quickly and so I would not be surprised. Certainly at FSG one thing we are really proud of is our people. We have excellent executives like Dana Hackett and Alex Baldwin and Jay Monahan and Billy Hogan and Mark Lev and just a real strong sort of All Star roster of executives that truly run the business day-to-day. Those of us who share joint roles are not as active in the day-to-day operations of FSG as we normally would be if it were our fulltime job. So you may see somewhat of a restructuring, but I don’t anticipate anything like that in 2008, but you never know.
Bizball: Lastly, you rode on one of the floats during the parade for the Red Sox after they won this year’s World Series. Was it entertainment or work? How much effort was there in getting sponsorships for the Duck Boats?
Kennedy: Well, thanks to Mayor Tom Menino and the City of Boston, that thing came off with very little work from the Red Sox. We’re grateful for our partnership with the city. The city paid for the entire event, so all the sponsorship that went along with it went to offset cost of setup, security and clean up associated with millions and millions of people in the streets in the city of Boston. That was a few short weeks ago, and was pure entertainment for me and Mike and Larry and John and Tom and all of us who were so fortunate to be able to be a part of it. We heard all the chants. People who were yelling at us, “Re-sign Lowell” and, “Don’t sign A-Rod”. So, Mike and I were sort of screaming back at the fans, “Hey, we just sell signs”. It was entertainment. We had a lot of fun and its one of the perks and benefits of being associated with a tier-one baseball organization.
- Interview conducted by Maury Brown on 11/5/07
- Transcribed by Business of Sports Network interns Nick Kappel and Christopher Mitchell
- Edited by Maury Brown
- Brown gives thanks to Kappel and Mitchell for helping turn around the interview in short order
- Extra special thanks goes out to Josh Milne of FSG for his assistance in making this interview possible
(See a complete listing of interviews across the Business of Sports Network)