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Opportunity steered Henry

Red Sox owner driven to partner with Roush by NASCAR's growing appeal

By Michael Vega
Globe Staff / June 29, 2007
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The familiar sounds that emanate from Fenway Park -- the crack of the bat, the noise of a sellout crowd -- were replaced yesterday by the roar of a 3,400-pound stock car beneath the center-field bleachers.

Painted to resemble a baseball with red stitching and "Red Sox" emblazoned across the hood above a "Lumber Liquidators" sponsor logo, the red and white car slowly made its way into the park. It carefully rolled along the warning track in right field, made a right turn at Pesky's Pole, and came to a stop along the first-base line.

It was an odd but welcomed sight for NASCAR owner Jack Roush and Red Sox owner John W. Henry, the principles of Roush Fenway Racing, as they sat next to each other at the unveiling of the No. 99 Red Sox/Lumber Liquidators Ford Fusion that Nextel Cup star Carl Edwards will drive in Sunday's Lenox Industrial Tools 300 at New Hampshire International Speedway.

"I'm very comfortable with John," Roush said, as he neared the midway point of the first year of his partnership with Henry. "I think he has a good time with me. We make jokes and we play and we find we're exploring one another's sense of humor, and it's been a lot of fun.

"I'm a little bit of an odd duck, and he's a very unique guy based on what he's done in his life and what his personality and strengths are, so the public persona and the real guy underneath the cloak are different for me and appears to be different for him."

Said Henry, "From Day 1, it's been a tremendous partnership. And Jack and I going to our first owners' meeting together as partners [before the Daytona 500 in February] was special. Every weekend, we try to talk and we do frequently about what we can do on our side to be helpful. It isn't much competitively, but we're learning."

By running a car with a special Sox paint scheme and logo, Roush Fenway Racing officials hope this weekend's race will be a showcase event for this fledgling partnership between Roush's five-car Nextel Cup stable and Fenway Sports Group -- a wholly-owned subsidiary of New England Sports Ventures, the ownership group of the Red Sox, Fenway Park, and New England Sports Network -- which acquired a 50 percent stake of Roush's racing empire for $62 million, according to garage sources and racing industry insiders.

"One of the things in waiting four years, our owners were convinced that this wasn't an impulse buy and nobody could accuse us of going 'Ready, fire, aim,' " said FSG president Mike Dee. "We looked at the sport, the fundamentals of the sport, we looked at different ways to get in -- small teams, middle-sized teams, big teams, start-your-own -- we compared the valuations of NASCAR with the valuations in other sports and other alternatives for making an investment and growing some asset value. I think we were able to demonstrate that this was a great opportunity -- not just an investment, but an opportunity."

Expanding the fan base
By all accounts, Henry, a hedge fund pioneer, seemed to reap an immediate return on his investment when Forbes magazine listed Roush Fenway Racing as the most valuable team in NASCAR, assessing its value at $316 million, more than double the average value of a NASCAR team ($120 million).

"I felt good from Day 1 that this was an investment that made sense, especially when you have 48 percent revenue-sharing in baseball," said Henry, who is the owner of record on Matt Kenseth's No. 17 car. "We were looking at trying to derive revenues from other areas that were untaxed and we really had to leave the sport of baseball to be able to do that. We felt this was a solid financial investment and we also thought we could bring a lot to the table with our sponsorship and marketing people who sold out Fenway and who I think sold everything they could sell in baseball.

"To apply their talents to a national format in the form of NASCAR was something we thought we could bring to a race team."

In making that significant investment, FSG's objective has been to use its assets -- such as Fenway Park -- to expose Red Sox fans to NASCAR and draw regional sponsors by converting some of the Nation into Roush Fenway Racing fans. Drivers Greg Biffle, Jamie McMurray, rookie David Ragan, Kenseth, and Edwards will be introduced before tonight's Red Sox game against the Rangers as part of a Roush Fenway Racing Night.

"We never envisioned that this was going to be a quick fix; that one year into it we were going to be sitting around saying, 'There we go, we've converted 14 million Red Sox fans into Roush Fenway fans.' It's a much longer-range strategy than that," said Dee, who in addition to serving as Red Sox chief operating officer is also the car owner of record of Ragan's No. 6 AAA Ford Fusion. "We're interested in developing a core fan base for Roush Fenway here in New England, but we're interested in developing a stronger, bigger core fan base for Roush Fenway everywhere in the world.

"But we certainly want a proportionate number of those fans to grow out of New England."

A quiet and reserved entrepreneur who in 2004 delivered long-suffering Red Sox fans their first World Series title in 86 years, Henry kept his affinity for racing close to the vest. Until, that is, he suggested during a strategy meeting that FSG's partners examine NASCAR as a potential investment vehicle to diversify their sports interests beyond their tier-one partnerships with Boston College, the PGA Tour's Deutsche Bank Championship, and MLB Advanced Media.

"There was a built-in momentum among the partners to do something big and put FSG on the map in a bigger way," said Dee. "I think, obviously, there's a lot of different points of view in how to do that. Some were saying, 'Let's not spend any money and keep representing things and properties,' and we were having a fair amount of success doing that. But the partners said, 'Why don't we get bigger? Why don't we get bigger in college sports? Why don't we buy a hockey team? Why don't we buy a basketball team?'

"There weren't any partners saying, 'Let's buy a race team' other than John Henry, who said, 'We should really look at racing.' John had an affinity for it early on, but we all caught up fairly quickly."

Before long, FSG and Henry were off to the races in search of that perfect investment vehicle.

"NASCAR, to us, was a very attractive alternative," said Dee. "The fundamentals of the sport being based on sponsorship, the television ratings, the star power, all the things that bring NASCAR fans to the TV set and the track every weekend . . . we loved it -- hook, line, and sinker."

Appealing numbers
According to a NASCAR survey of Nielsen Media Research, NASCAR last year averaged better network ratings (5.4) than just about every televised sport (college or professional) with the exception of the NFL (10.4). On cable TV, NASCAR Nextel Cup Series was the second-ranked sport behind the NFL with an average weekly rating of 4.5, while the Busch Series ranked third (1.7). NASCAR also delivered a young audience, ranking second behind the NFL and ahead of the NBA, PGA, MLB, and NHL in three key age-group viewer demographics: 18-49 (3.617 million), 18-34 (1.182 million) and 17-under (616,000).

In the Boston market, NASCAR was the third-rated regular-season sport on network TV (3.6) behind the NFL (12.8) and major league baseball (6.0) and second on cable, with its TNT/FX telecasts drawing a 2.8/2.3 rating, trailing only the NFL's 8.4 rating on ESPN.

Locally, NASCAR data showed last year only the Patriots (634,000) and Red Sox (264,000) delivered more average households than the Nextel Cup Series (204,000) per televised event.

"We started talking to Roush about 2003 and right away there was a strong personality fit with both John and Jack," Dee said. "At the time, we were both championship-less as were the Red Sox over a long, long drought, so it seemed like a great fit. They were the Red Sox of racing and we were the Roush of baseball; they had fallen short on many occasions to Hendrick [Motorsports] and [Richard] Childress back in the Dale [Earnhardt] Sr. heyday years and we've always had this nemesis to the south."

On all fronts, it seemed a perfect fit.

"We looked at that and said, 'OK, what kind of advantages does that give [Roush] in selling?' " said Geoff Smith, president of Roush Fenway Racing. "So when we got the opportunity to talk to the Fenway Sports Group people, we were like, 'This is great.' We've got an unbelievable demographic, and brand relationship with loyalty in a marketplace that was ripe for more NASCAR enthusiasm."

But, Smith was quick to point out, "We could've run our business just fine indefinitely without selling off a nickel's worth [of the team]. We looked at the bigger picture. Like right now, here's a bigger picture issue: You've got Jeff Gordon, Dale Earnhardt Jr., and Jimmie Johnson all in the same camp [next year at Hendrick Motorsports] with premier sponsorship levels and we have to compete against that. We need to have a similar kind of funding to be able to put a competitive program on the racetrack. How do you get that? You have to have some kind of marketing advantage to compete against that."

Satisfying decision
As part of its four-year due diligence, FSG weighed its options. Andy Petree, a former car owner and current ESPN analyst, said he even fielded a call from Henry. "I had a voice mail on my shop phone from John Henry and I saved it for the longest time until I lost it when I switched out phones," Petree said. "At the time, I had been talking to [Dallas Cowboys owner] Jerry Jones for the better part of a year, but we never could come together and make it happen."

FSG even considered starting its own race team, but, Dee said, "To build from the ground up would have been as, if not more, expensive than buying into an existing team -- with no guarantees that, despite the fact you were going to spend that money, you would be able to compete at that level.

"You were still going to have to put an organization together: engine building, engineering, chassis, team management, crews, drivers, crew chiefs, and that's just on the racing side. You go to the business side; licensing, marketing, finding title sponsors, and it was a pretty intimidating alternative to us to start from scratch."

Said car owner Rick Hendrick, "I think this was the best way for them to do it; to find a proven guy like Jack and partner up instead of starting from scratch, because a lot of these start-from-scratch deals don't work. So if you got the human capital of Roush Racing already in place, I think they'll complement each other a lot."

Which explained why, after kicking so many tires of so many race teams of all sizes, FSG decided to go back to Roush Racing.

"The more we learned, the more we liked the concept of buying into an existing large team, a team that ran up front every week," Dee said. "Once we determined that, since we had already known the Roush people and had become comfortable with them, from that point forward the deal picked up a lot of momentum and it took a year to complete."

In the four months since it made its debut at Daytona, Roush Fenway Racing drivers have combined for 1 pole, 2 victories, 14 top 5s, 26 top 10s, and 5 DNFs (did not finish) in the first 16 races of the season. Kenseth, who is third in the points, delivered the team its first victory in its second race as Roush Fenway Racing with a triumph in the Auto Club 500 Feb. 25 at California Speedway while Edwards, seventh in the points, notched the team's second triumph in the Citizens Bank 400 June 17 at Michigan International Speedway.

Has it been a seamless transition so far?

"It's been seamless, hopefully, in both directions," Roush said. "There's been no anxiety and we haven't had a bump in the road from the organization point of view. Everything has worked out well. Mike Dee and his people are working their way to an understanding and an involvement with Geoff Smith and my marketing people, and every once in a while I get to go to a baseball game, so life's good."

Michael Vega can be reached at vega@globe.com.

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