From farms to high finance: the devoted sports fan who made $800m
Published 07/10/2010 | 05:00
Every sports mogul is both a fan and a businessman. Some are fans first, businessmen second. John William Henry II is a businessman first, a fan second. And that's worked out just fine for the Boston Red Sox, where the hedge fund manager's millions ended a World Series drought and won him the respect of fans and Major League Baseball executives alike.
It has worked out just fine for Henry, too, who is now living a lifestyle he wouldn't have been able to have dreamed of when he was growing up as a shy, asthmatic son of farmers in the state of Arkansas.
Recently turned 61, with a net worth that 'Boston Magazine' estimates at $840m (€603m), he has all the accoutrements of the super-rich. He has the obligatory $34m yacht, the 164ft Iroquois, which he docks at the city's most exclusive wharf during baseball season (and on which he insists that visitors must remove their shoes to avoid scuffing the teak deck. He gives them red socks to wear instead).
He has the obligatory Florida mansion. He has the obligatory second wife, half his age; he and Linda Pizzuti were hitched aboard the Iroquois last year, before retiring to the Red Sox stadium for a celebrity-packed reception.
Most of all, Henry has the Red Sox, after the New York Yankees the best-loved and most lucrative franchise in baseball.
Not bad for a kid who played second base in Little League, and who adored the St Louis Cardinals and its legendary hitter Stan Musial. This, coincidentally, is "Stan the Man" Musial after whom Arsenal's largest shareholder Stan Kroenke was named, and who Kroenke also grew up admiring. Something for the pair to discuss when the Gunners next head to Anfield, perhaps.
In a nation that prides itself on its social mobility, it is nonetheless rare to find someone of farming stock nudging even the bottom of the billionaires lists. While it wasn't exactly the family business that made Henry rich, it certainly inspired him in the business that did -- namely, futures trading.
Futures are fiendishly complex in practice, but simple in outline: they are contracts to buy or sell commodities, such as farm produce like wheat, at a point in the future. Farmers invented them to protect themselves from unexpected moves in the price, and to smooth out the vagaries of the harvest. Henry, a maths whiz, was fascinated.
What lit the touchpaper under Henry's fortune was his refusal to submit to guesswork, or even forensic investigation, over what might affect prices in the future. Instead, he built a mathematical model of the financial markets, and used that to predict what prices would do. No humans necessary. "The first week of trading was in June of 1981. I was so confident in my research and philosophy that I left the country."
Henry was being interviewed for a hagiography in the traders' publication 'CME Magazine' in 2007, by which time his hedge fund, JWH, had grown to be one of the largest traders of futures in the world, with wannabe investors scrambling to give Henry their money to manage.
When the 'Boston Globe' profiled its local team's owner three years ago, the paper summed him up this way: "Henry is quirky, he's a geek and, like an increasing class of people in this country, he has more money than he knows what to do with. He is, in short, darn entertaining. And entertainment is the business he is in, after all."
It is a business he takes seriously, and has done ever since he began splashing his riches on sports investments, something he first did in baseball in 1991. He has been in and out of various teams, holding a sliver of the Red Sox's arch-rival, the Yankees, and spending three years as owner of the Florida Marlins, where he contrived not to lose any of his money, despite the team's poor on-field performance.
Don Garber, Commissioner of Major League Soccer in the US and a man with a keen eye for business savvy, says of New England Sports Ventures (NESV), the Red Sox owners: "They have a tremendously robust understanding of the sports business and an understanding of how to protect and enhance the legacy of a brand."
NESV embraced the history of the team, Mr Garber said, and won over a worried "Red Sox Nation", as the uber-loyal fans are known. "They are tremendously good team owners." For Liverpool fans, then, they sound far better than the last lot. (© Independent News Service)