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Red Sox owner John Henry’s investment firm to shut down

Nov 9, 2012, 6:09 PM EST

John W. Henry, Tom Werner AP

The asset management firm that helped one of the Red Sox’s principal owners to amass his fortune is no more. John W. Henry & Company will shut down at year’s end, the company announced Friday.

The Wall Street Journal reports that Henry’s company managed more than $2.5 billion in 2006, but today oversees less than $100 million. Not all that money was necessarily lost, but it seems safe to suggest that Henry hadn’t been attracting new investors since taking a big hit in the market downturn.

The news figures to touch off a new round of “will the Red Sox be sold” stories, but the fact is that Henry’s company has been weak for four or five years now and shuttering it probably won’t affect his fortunes much.

  1. dcfan4life - Nov 9, 2012 at 6:15 PM

    Wow his principal firm manages only $100 million. Theres what, 20 MLB players making more than an Owners investment firm manages. Whats that say about the state of baseballs contracts?

    • mrfloydpink - Nov 9, 2012 at 6:23 PM

      Um….nothing?

      • mrfloydpink - Nov 10, 2012 at 4:25 AM

        Not sure what the thumbs down are about. I *think* this original post was trying to argue that the greedy players are making way too much money at the expense of the poor owners. Assuming I am correct, then:

        1. That is a really stupid argument. Do you really think that if John Henry liquidated his stake in the Red Sox, he would not collect as much money as A-Rod or Carl Crawford or Cliff Lee have many times over? The Dodgers just sold for what, $2.3 billion?

        2. This is also a really stupid way to make that argument, by choosing to focus on ONE failing asset of ONE owners. That’s like saying it’s ridiculous how much money players are making, given that Little Caesars (source of Mike Ilitch’s wealth) only sells pizzas for $6.

      • dan1111 - Nov 10, 2012 at 4:48 AM

        Mr. Floyd, you are right on. +1 and +1 to your comments.

        If there’s anything shocking about the $100 million, it’s that it is a really low amount for a baseball owner’s investment firm to manage.

      • dcfan4life - Nov 10, 2012 at 7:58 PM

        Ok let me clarify what i meant. Baseball countracts are fully guaranteed. Every dollar, as soon as its signed. So Alex Rodriguez has made $325 million in his career, just for playing baseball, with $125 million still owed him regardless. Throw on endorsements im sure theres another $50 million there. The Boston Red Sox, according to Forbes are worth $912 million. John Henrys net worth is estimate at $1.1 Billion. That means the highest paid player of all time will make a little less than half the net worth of an owner and half the worth of a the third most valuable MLB franchise. Not to mention he will make more many than the net worth of around 15 MLB franchises. So what im saying is baseball contracts are out of control, its killing owners of small market teams from competing, and its utterly ridiculous. The TV contracts are making it worse and are going to create more disparity as if it wasnt bad enough. If 8 MLB franchises have never won a title in over 100 years of championships, with another 12 in at least a 20 year drought since the strike of 94 made these contracts even possible, meaning only 10 teams have won since then, well it just shows the problem with MLB. Can’t feel sorry for a MLB owner, but when the players make these insane contract demands when the third most important owner is only worth double what the highest paid MLB player is worth, well, take that into account when you think about the small market owners. Thats what im saying, but no one reads these long comments as much as the short ones.

      • mrfloydpink - Nov 11, 2012 at 2:30 PM

        I’m afraid your comment is not only barely comprehensible, it’s riddled with errors and wrong/questionable assumptions. To point out a few:

        1. Forbes’ valuations of franchises are pretty clearly meaningless. They had the Dodgers at $700 million right before they sold for over $2 billion. They missed almost as badly on the three or four other franchises most recently sold.

        2. I’m not sure what ratio is ok with you. Is it ok if the richest player earns 20% of the average owner’s net worth? 10%? 25%? You seem to be pretty arbitrary on this point.

        3. Why do you feel that John Henry (who managed others’ investments) has provided a service so much more valuable than A-Rod has? They both create jobs, they both earn profits for those who invest in them, they both contribute to the economy. Henry has reached the pinnacle of his billion-dollar industry, and A-Rod has reached the pinnacle of his. Why shouldn’t they be compensated accordingly?

        4. I barely understand your point about 100 years without a championship, but let me say that there is only one team that fits that description, and it is the Cubs–one of the richest, largest-market teams. Let us also note that in a league with 30 teams, there are always going to be a handful of teams with 25, 35, 45 year droughts.

        5. Your belief that expensive players == poor owners with no money to spend == uncompetitive teams is so full of flaws it’s hard to know where to begin. There is, first of all, only a moderate correlation between payroll and playoff success (see this year’s A’s vs. this year’s Phillies). Second, expensive players like A-Rod have rarely proven to be the path to the promised land (see, for example, the last decade of Yankees teams). Third, there are plenty of very rich small-market owners who have no interest on spending big on payroll regardless of team profits (see the owners of the Marlins and Rays, for example).

        In short, it may be satisfying to you to blame A-Rod or Albert Pujols for everything that’s wrong with your team or wrong with baseball, but such a belief has very little grounding in reality.

      • dcfan4life - Nov 11, 2012 at 6:33 PM

        mrpinkfloyd, did you even look at the deal to buy the Dodgers, and what it includes. $160 million worth of parking lots, the $400 million stadium, and the surrounding land which could be built upon. Forbes estimate value is for the team ONLY. And i believe its accurate. Forbes has a lot of smarter people than both you and I making that estimate.

        As for competitive teams and payroll, lets break it down. Only one team in the bottom 10 in payroll, the A’s with probably the best GM in baseball, made the playoffs. 5 out of the top 10 payroll teams made the playoffs. Yankees, Tigers, Rangers, Giants, and Cardinals. The others were either close or made it in the last 3 years, Red Sox, Phillies, Brewers, Angels, Marlins. Marlins of course only being up there this season. As for the bottom 9 that didnt make the playoffs, lets see who has been there recently or close. Padres, Astros, Royals, Pirates, Rays, Indians, Diamondbacks, Blue Jays, Rockies. Only 2 had been relevant in a playoff picture in a decade, the Rays and Diamondbacks. Neither of course sustaining it for a even a few years. Clearly spending increases playoffs by a great deal but sure, there can always be a good or great team that didnt spend. The As made the playoffs this year, but where have they been the last few years? Even in the picture? No. So to ignore all the teams that dont spend, cant compete, and have little to look forward to is ridiculous. The small dogs can not compete with the big ones in baseball with any kind of regularity. Just a sad fact that looms over baseball.

        Now we let these players make insanes amount of money without producing is ridiculous. Your missing the key problem i have with inflated contracts. THEY ALL ARE GUARANTEED!!!! The Burnes, Sorianos, Milton Bradleys all got paid huge amounts while doing nothing for their teams. It ensures smaller market teams wont spend even more because they literally cant afford to be burned like that by a bad top dollar contract. Has any of those bottom 10 teams EVER paid top dollar for anyone, or have anyone on their payrolls at 5 years let alone 7? Maybe 4 or 5 for the entire bottom 10, says something doesnt it. And name a single top 3 paid player at his position that plays for any of those teams. There are none.

        And John Henry is the example in the topic of this article. Only reason i used him. But to conlude, let me just say that my comment on how teams who haven’t spent in the last 20 years dont win is 100% accurate. Since the all important strike of ’94, only 1 world series victor, the 2003 Marlins, were in the bottom 15 in payroll, let alone the bottom 10. Would you like any more facts to prove this point? I got more but this reply is already extremely long…

  2. nagrommit - Nov 9, 2012 at 6:17 PM

    Who is John Galt?

    • protius - Nov 9, 2012 at 10:57 PM

      He’s a AA short stop in the Mariners minor league system.

  3. pisano - Nov 9, 2012 at 8:26 PM

    It seems like everything John Henry touches turns to sh*t, just sayin!

    • raysfan1 - Nov 9, 2012 at 10:37 PM

      The reverse-Midas Touch.

      • Old Gator - Nov 9, 2012 at 11:37 PM

        Not necessarily. What doesn’t turn to shit turns to Scrooge McLoria.

        By the way, I hear his branch offices in Madrid, Rome and Athens are staying open for another few months.

    • protius - Nov 9, 2012 at 10:59 PM

      Clearly, he’s been scratching his head a lot lately.

    • dan1111 - Nov 10, 2012 at 4:53 AM

      Really? The guy is still way richer than you and me; also, the Sox won two world series titles under his ownership.

  4. heathater4lifeson - Nov 9, 2012 at 9:00 PM

    I wonder if that investment firm invested in bobby valentine, Carl Crawford, josh Beckett, and a-gon.

  5. bozosforall - Nov 9, 2012 at 9:25 PM

    Henry s a loser, just like all Boston fans.

    • jackdaniels1 - Nov 10, 2012 at 8:08 AM

      Let me guess, you’re a “winner”? I’d like to see you wife next to his, let’s go post some pics CHOP CHOP!!

      • bozosforall - Nov 11, 2012 at 8:25 PM

        More of a winner than you will ever be, drunken fool.

  6. jerlee7 - Nov 9, 2012 at 9:53 PM

    No, he has liquified investments to maximize $ before the government takes it all. Thank you 2012 election.

    • gloccamorra - Nov 10, 2012 at 2:26 AM

      The guv’mint won’t take ALL of it. The capital gains rate goes up from 15% of the Bush tax cuts back to 35% at the stroke of midnight, December 31st. Henry’s clients protected themselves in advance, by cashing in, and that’s why he’s shutting down the business. The rich don’t make risky investments in the economy when higher taxes make it less likely they can make profit. Look for capital gains revenue and the economy as a whole to “unexpectedly” decline.

      • dan1111 - Nov 10, 2012 at 4:59 AM

        I agree philosophically with what you are saying. Still, I don’t think that works as an explanation for this particular event. After all, not ALL investment firms are closing. Henry’s company is an unusual case.

      • Chris Fiorentino - Nov 10, 2012 at 8:44 AM

        The changes won’t affect the larger firms like Fidelity and Vanguard which manage over a TRILLION dollars as much as smaller firms like Henry’s which only manage a couple billion. While not all investment firms are closing smaller ones are being affected just as small businesses are being affected by Obama’s tax and spend policies. Hopefully Boehner and the Republicans in the House stick to the principles that go them elected and force spending CUTS. Someday people will realize that raising taxes in the rich doesn’t bring in the kind of money needed to balance the budget. The only way to balance the budget is to CUT SPENDING!!!

      • js20011041 - Nov 10, 2012 at 10:51 AM

        Or they could do both. They absolutely need to start reducing spending, starting with the military. There is no reason for us to be spending more money on our military than the next 11 countries combined. After that, they need to reform Medicare. There is no reason for hospitals/clinics/doctors offices to charge what they do. The reason that medical care costs so much is because the medical field knows they can charge that much and that the government will pay it. After that they need to reform welfare and food stamps. An able bodied adult should be working. Im ok with these measures bridging the gap, but we shouldn’t be incentivising laziness. But, we also need the wealthy to pay their fair share. There is no reason for a billionaire to pay 13% in taxes while someone making 40,000 a year pays closer to 25%. I don’t want to hear about how that will hurt job creation. There is no evidence that giving the wealthy tax breaks helps job creation.

  7. sidelineshot - Nov 10, 2012 at 4:56 PM

    Henry did what he was supposed to do when losing money … he stopped the bleeding by dumping salary from the Red Sox books.

    Keep the payroll around 100-120 mil for a while. The Sox will save cash and win games anyways.

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