• Villanova Sports Law Blog

Operating in the Red: Boston Owner’s Quest to Save Money at Fans’ Expense

By: Ian Daniels


As a sports fan, you may have noticed that the reigning NFL MVP Lamar Jackson has not been traded from the Baltimore Ravens. You could probably guess he will not be either. Similarly, you probably did not suspect the Milwaukee Bucks to trade NBA MVP Giannis Antetokounmpo before the trade deadline this season either. The thought of a team trading an MVP-winning top five player in the league would be ludicrous to most. This does not seem to be the case for the Boston Red Sox.

On February 4th, 2020, the Boston Red Sox agreed to trade 2018 AL MVP Mookie Betts to the Los Angeles Dodgers along with David Price for what would ultimately amount to Alex Verdugo in a three-team trade also involving the Minnesota Twins. [1] Red Sox owner John Henry was looking to get the team below the allotted $208 million payroll allowed before the team is subject to luxury tax. [2] The luxury tax is basically a tax for teams who go over an agreed upon amount in payroll to allow for smaller markets to remain competitive and deter teams from overpaying for players in order to win. [3] It essentially is meant to keep balance in leagues that have luxury taxes.

Major League Baseball’s threshold for the luxury tax is $208 million for 2020, and the Red Sox thought that paying Betts, and ultimately going over the threshold, was too much to bear for the team’s finances. [4] It is a puzzling thought, however, when context is presented for the situation at hand.

Unsurprisingly, the Red Sox raised their ticket and concession prices in 2019 following their World Series win. [5] They have continually raised ticket prices since 2016 and even plan on doing so in the 2020 season, despite not making the playoffs at all. [6] With the prerogative of being a competent organization, you would think the price being put onto the fans by ownership would translate directly to the willingness to pay more for players in order to reward those fans for their loyalty. It should not be too much to ask to pay the best player on the team what he asks after leading the team t a World Series only 2 years earlier. John Henry seems to disagree with this notion.

Henry is committed to ensuring the Red Sox do not pay the luxury tax in the 2020 season. Henry, whose net worth is upward of $2.7 billion [7], had to pay a whopping $12 million dollars in luxury taxes in the 2019 season. [8] This is nearly 2.4% of the Red Sox revenue from the 2018 season! [9] To put those numbers into perspective, the Oklahoma City Thunder, number 44 out of 52 qualifying American sports markets by size [10], had to pay $154 million in luxury taxes in 2018. [11] The Thunder brought in $241 million in revenue in the 2017-18 season. [12]

Jokes aside, Henry’s ownership of both the twelfth (Red Sox) and forty-fifth (Liverpool) most valuable sports teams in the world shows he clearly has the interest, and money, to operate franchises in the sports industry. [13] The question is whether he is willing to treat these storied franchises as the heirlooms that they are or throw away fan favor for the sake of keeping his purse strings tight. The fans of this team, and any team ultimately, are owed more than an owner who is willing to sacrifice winning for financial frugality. The Red Sox have been around since 1901 and have a winning history in the twenty-first century. Trading a generational player like Mookie is a slap in the face to every fan who has ever paid a ticket to enter Fenway. This is especially true because Mookie was traded to the team the Red Sox beat in the World Series just two years ago.

The court of public opinion has deemed this trade insufficient, and media and fan pressure had given Red Sox ownership “pause” to complete the trade, but it ultimately went through. [14] No fanbase should be subjected to the stinginess of a billionaire owner and lose a franchise player who has a proven track record of winning. For the sake of sports fans everywhere, we can only hope the precedent set of trading one of the best players in the league to save a buck does not become the norm.

Citations

[1] Jimmy Golen, Red Sox Agree to trade Mookie Betts, David Price to Dodgers, Boston.com, (Feb. 4, 2020), https://www.boston.com/sports/boston-red-sox/2020/02/04/red-sox-dodgers-mookie-betts-david-price-trade

[2] Id.

[3] Alex Speier, A complete explanation of the Red Sox’s luxury tax and payroll situation, Boston Globe, (Sept. 28, 2019), https://www.bostonglobe.com/sports/redsox/2019/09/28/complete-explanation-red-sox-luxury-tax-and-payroll-situation/EuiO7nuDwHIPqHBABM2I8L/story.html

[4] Id.

[5] Red Sox announce ticket price increase for 2020 season, NBC Sports Boston, (Oct. 8, 2019), https://www.nbcsports.com/boston/red-sox/red-sox-announce-ticket-price-increase-2020-season

[6] Id.

[7] John Henry, Forbes, (Feb. 12, 2020), https://www.forbes.com/profile/john-henry/#60b15bd11194

[8] Alex Speier, A complete explanation of the Red Sox’s luxury tax and payroll situation, Boston Globe, (Sept. 28, 2019), https://www.bostonglobe.com/sports/redsox/2019/09/28/complete-explanation-red-sox-luxury-tax-and-payroll-situation/EuiO7nuDwHIPqHBABM2I8L/story.html

[9] Christina Gough, Boston Red Sox Revenue 2001-2018, Statista, (May 23, 2019), https://www.statista.com/statistics/196639/revenue-of-the-boston-red-sox-since-2006/

[10] Major Pro Sports Teams by TV Market Size, Sports Media Watch, (Oct. 2019), https://www.sportsmediawatch.com/nba-market-size-nfl-mlb-nhl-nielsen-ratings/

[11] Joseph Zucker, Thunder to Become 1st Team in NBA History to Top $300M in Salary and Luxury Tax, Bleacher Report, (July 4, 2018), https://bleacherreport.com/articles/2784460-thunder-to-become-1st-team-in-nba-history-to-top-300m-in-salary-and-luxury-tax

[12] Christina Gough, Oklahoma City Thunder’s revenue 2001-2018, Statista, (Feb. 19, 2019), https://www.statista.com/statistics/196757/revenue-of-the-oklahoma-city-thunder-since-2006/

[13] Kurt Badenhausen, The World’s 50 Most Valuable Sports Teams 2019, (July 22, 2019), https://www.forbes.com/sites/kurtbadenhausen/2019/07/22/the-worlds-50-most-valuable-sports-teams-2019/#fed7afb283da

[14] MLB Rumors: Negative Media Reaction Gave Red Sox Ownership ‘Pause’ To Complete Mookie Betters Trade With Dodgers & Twins, Dodger Blue, (https://dodgerblue.com/mlb-rumors-negative-media-reaction-red-sox-ownership-pause-complete-mookie-betts-trade-dodgers-twins/2020/02/09/