April 20 (Bloomberg) -- Boston Red Sox owner and hedge fund manager John Henry has done what his predecessors said couldn’t be done with Fenway Park, which celebrates its 100th birthday today as the oldest stadium in Major League Baseball.
Since buying the club in 2002, Henry has refurbished and expanded the park that previous owners had marked for the wrecking ball. That’s pleased preservationists and helped more than double revenue, bankrolling teams that won two World Series titles. The Red Sox will mark the centennial of the first official game at Fenway today in a rematch with the New York Highlanders, since renamed the Yankees. All former managers and players were invited to attend.
Aside from a 4-8 start to the season that has the team in last place in the American League East, just one thing might spoil the celebration: Henry and Larry Lucchino, the team’s chief executive officer and the force behind Fenway’s renewal, may have run out of ways to make the old ballpark print new money.
“They have, without a doubt, put their arms around a lot more revenue,” said Glenn Stout, author of “Fenway Park 1912.”
The decision by current owners to stick with Fenway dates to before Henry took over a partnership first led by Les Otten, founder of American Skiing Co. Otten, who sold his minority stake in the club in 2007, said he was committed to preserving the grounds since making a visit to Fenway around 1998 to see his friend and then-general manager Dan Duquette.
As they looked down on the largely empty field from Duquette’s box, they spotted a man on a paid tour shaking his trousers as he stood on the center-field warning track. Dust plumed from the bottom of his pant legs.
“Dan said, ‘You won’t believe the lengths people will go to spread the ashes of a loved one on the field at Fenway Park,’” Otten said in an interview.
A year later, then Red Sox CEO John Harrington said Fenway was obsolete. “It just doesn’t allow us to compete like teams with modern ballparks do,” he told the Boston Globe.
Henry could have changed course. While the previous owners’ goal to build a new park next door had foundered on neighborhood opposition, that plan had received a $300 million commitment from the Massachusetts legislature. According to Otten, Major League Baseball Commissioner Bud Selig also wanted a new stadium. Instead, Henry embraced Otten’s plan.
“Our predisposition was always that it should be saved if it could be saved,” said Lucchino, 66. “But it had to be saved in a way that enabled us to generate the kinds of revenue necessary to be competitive.”
At the time, professional baseball was in the middle of a building boom, with several teams constructing venues designed to look like early 20th century ballparks. The style was inspired by Lucchino, who had overseen construction of Oriole Park at Camden Yards as president of the Baltimore Orioles.
Fenway had the nostalgia part covered. As the smallest park in baseball at the time, what it lacked was capacity and the modern features that could help owners make more money. So, as Lucchino set out to renovate Fenway, he copied the parks that had copied Fenway.
New seats came first -- behind home plate, atop the left field “Green Monster,” on the right field roof and high above third base. That made room for another 3,500 customers, a 10 percent increase in a park that has sold every seat of every game for almost a decade.
While the club doesn’t release figures breaking down revenue, there are more signs inside, with advertisements now adorning almost every available facade and a number of sections named for corporate sponsors.
The club also bought adjacent buildings and knocked down walls, allowing them to turn choked corridors into wider concourses. Aside from giving patrons space, it allowed for faster-working concessions stands offering a greater selection, according to Janet Marie Smith, an architect who worked with Lucchino on Camden Yards and oversaw the renovation at Fenway.
Mayor Tom Menino cooperated, as well, giving the team the right to build the Green Monster seats above neighboring Landsdowne Street and granting permission for the club to connect the park with adjacent structures, a move normally prohibited under fire codes.
The team’s annual revenue has climbed 104 percent to $310 million, second only to the Yankees’ $439 million, since the Henry group took over just before the 2002 season, according to data compiled by Forbes magazine. That growth outpaced the 78 percent average jump for major league teams. The majority of the increase in Boston has come from “attendance and ballpark-related revenue,” Lucchino said.
During the same period, the team’s payroll rose 58 percent to $173 million, also second to the Yankees, and the average non-premium ticket price by 48 percent, according to USA Today and research firm Team Marketing Report.
As costs go up, new government help is on the way. In March, the club succeeded in adding Fenway to the National Register of Historic Places. More than something to brag about, the designation comes with a federal tax credit worth $39.4 million -- 20 percent of qualified rehabilitation costs -- and makes the Sox eligible for an equal amount of credits from the state, according to Brian McNiff, spokesman for the Secretary of the Commonwealth’s office, which oversees the state historical commission. So far the club has secured $11.2 million in state credits.
No More Room
Looking ahead, as the payroll continues to rise, the Sox are out of options for expanding the park, Stout said. That in mind, he isn’t convinced this year’s celebration of Fenway’s history means the Sox won’t soon contemplate a new home.
“After the marketing possibilities of the anniversary are over and done with, I wonder when they’ll start to express anxiety about remaining in the park,” he said. “Within a decade I bet we’ll start hearing whispers that now we really are at the end.”
Not from this ownership, Lucchino said.
“As Charlie Dressen used to say,” said Lucchino, quoting the former Brooklyn Dodgers manager, “‘Stay close for eight innings, and I’ll think of something.’”
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