World Series Win Yields Red Sox Benefits and Costs The Boston Red Sox' World Series win — twice in the last four seasons — garners benefits such as the brand Red Sox Nation along the way. But the big win also has its costs.
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World Series Win Yields Red Sox Benefits and Costs

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World Series Win Yields Red Sox Benefits and Costs

World Series Win Yields Red Sox Benefits and Costs

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Next, we'll learn about the business costs and business benefits of winning the World Series. The Boston Red Sox have done that twice in four seasons. And if you've heard the phrase Red Sox Nation, you have a sense of the wide business possibilities of a winner.

One of the men behind the Red Sox's brand is Mike Dee, chief operation officer of the team. He says winning the World Series did not actually bring much of a financial windfall.

Mr. MIKE DEE (Chief Operation Officer, Boston Red Sox): Our business is very mature in terms of we've sold out 388 consecutive games, thanks to the best fans in baseball. Our corporate sponsorship has been trading at a very high level, dating back to our World Series appearance in 2004. So there really isn't a lift, if you will, from this World Series appearance and victory.

But it is very important to sustain the trading level that we've established since this ownership group took over the team in 2003. So maintaining that sell-out streak, maintaining the level of interest in the team, corporate sponsorship agreements that we have, the television and radio contracts, all of those parameters that we measure on a season-by-season basis will be -certainly helped and stabilized by this victory.

INSKEEP: Granting that every market must be different, do baseball executives have a number in mind if they talk about the value of a World-Series win?

Mr. DEE: You know, I don't think there is a constant number. I do think that that teams that have ball parks that are large enough and have unsold capacity preceding a World Series appearance, you know, you should expect to see that attendance number rise by - between 20 and 40 percent the year following a World Series, and corporate sponsorship would look to increase at a similar level.

INSKEEP: Sounds like you're saying the value for you maybe in many millions of dollars, but it's basically money you might have lost if you've been on last place and things are gone down next year.

Mr. DEE: Yeah, I think that's a good way to look at it. I think there's a tremendous pressure on the revenue side of the business to sustain the trading level that we've established, and this will certainly help.

INSKEEP: Now when you're talking about pressure on the revenue side business, you're talking in part about making enough money to justify a $143 million payroll.

Mr. DEE: Well, yeah, that's true. I mean, certainly our payroll is second in baseball to the Yankees. I will point out a lot of what's been written in the last week suggests that we're within shooting distance of their number. I think we spend, by comparison, $70 million less than they spent, so we will never be able to compete with our arch rival to the south. You know, it's not all about signing high-dollar free agents, that certainly helps, but you have to have a mix of younger players who come up through your system.

INSKEEP: Why couldn't you just spend $200 million if you wanted to?

Mr. DEE: Well, we simply don't have the economic, you know, model to do that. We have the smallest facility in all of Major League Baseball. Fenway Park is -you know, capacity is 38,800. It will always be, by comparison, a very small facility, and we like that. We are pretty well locked in on most of our primary revenue or income streams. So, you know, we have to be creative in diversifying our business outside of baseball. We now have a sister company, which has ventured off into NASCAR racing. We represent Boston College, the number two ranked team in the country in the BCS. So it's a very, very fun time here.

INSKEEP: Have you consciously tried to expand you brand by making it a more national brand, or international brand for that matter? Red Sox Nation? Red Sox Nation with a branch office in Japan?

Mr. DEE: Absolutely, although the challenge is, is baseball's structure related to international rights and marketing? We are not able to go to Japan, as an example, and sell sponsorship. But, you know, in terms of the Red Sox Nation being a nationwide and now an international issue, you know, the fans drive that. You know, we got e-mails, cards, letters from all over the world of Red Sox fans, many of whom really have no connection to Boston other than the fact that they've become part of the nation based on the 2004 World Series and what's taking place since then. So we're doing everything we can to cater to those fans, just really trying to expand our footprint to the degree possible.

INSKEEP: Does the reality of business ever take some of the fun out waiting for you?

Mr. DEE: Never.

(Soundbite of laughter)

Mr. DEE: You know, we were all jumping around like little kids on the Sunday night in Denver, whether you were, you know, the chief operating officer or the general manager or that ticket sales guys. It's one of the things that sets this business apart.

INSKEEP: Mike Dee, best wishes next season.

Mr. DEE: Thank you very much, Steve. I appreciate it.

INSKEEP: He's the chief operating officer of the Boston Red Sox.

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