00:00: Charlie Rose: John Henry is here. He is the chairman and the owner of the Boston Red Sox. They won the World Series this year for the first time in 86 years. From 1999 until 2002, he was the owner of the Florida Marlins. He is also the founding chairman of the John W. Henry & Co., a managed futures advisory firm. I'm pleased to have him at this table to talk about this rather remarkable thing that happened in the World Series this year. Welcome.
00:23: John Henry: Thank you.
00:25: Charlie Rose: The remarkable thing happened even before the series, with the Yankees.
00:28: John Henry: It was a remarkable year, a great year for baseball.
00:31: Charlie Rose: Why was it a great year for baseball? Because it shows hope can be rewarded?
00:37: John Henry: I think on several levels. One thing, we had a team that was magical in the chemistry that it had among themselves. You had a team that had 20 players going out to dinner a night. That just doesn't happen in baseball. Hugging on television after most of the plays, it seemed. Anytime anything good would happen. So that's -- that I think was great for baseball, to see how much a team really -- teammates really loved each other, and I believe love is pretty close to the right term.
01:12: Charlie Rose: Suppose somebody had come to you after you already owned Marlins, the Major League people they knew, they said John Henry is a good owner, and he means well and he likes baseball and he's good for baseball. And at the same time, and if you looked at it from all things being equal, from a financial standpoint, and you could have purchased either the Red Sox or the Cardinals, which would you have purchased? All things being equal.
01:42: John Henry: Well, you know, generally you don't look at it from a financial point of view.
01:46: Charlie Rose: Fair enough. That's right. I did a talk with Michael Eisner about that.
01:52: John Henry: There are 30 practice games, 162 regular season games. It's so much a part of your life. You watch 200 games a year, three hours apiece. So if you could own one team, in my mind, it has to be the Red Sox. Why? Because the mystique of Red Sox nation was really created not by the Red Sox but by the fans. It matters what you do there. It matters. If you speak up on behalf of John Kerry, it's not John Henry talking, it's the principal owner of the Red Sox, and it takes on a life of its own. It's -- so the answer is simple, that you want to be somewhere where what you do matters.
02:37: Charlie Rose: So when you got opportunity to buy the Red Sox, you just said, there is a God in heaven?
02:43: John Henry: Well, it was a contentious -- it was a very difficult purchase, as seems to happen in all sports transactions there. There was a guy named J. Alan Hinic (ph) who came up with the term swamp gas. Remember, in the UFO phenomenon? He worked for the government. And he said, every time there is a close encounter, it was -- these encounters all exhibited high levels of strangeness. And that's been my experience in trying to buy sports teams. I have been involved with a few.
03:17: Charlie Rose: Why did you blow it with A-Rod?
03:21: John Henry: We made a deal with A-Rod. The problem was the players union said we don't like the fact that Alex is willing to take less, and these are the terms under which we would allow this to go forward. And we decided not to go beyond where we thought it was prudent to go.
03:38: Charlie Rose: So it wasn't prudent to go beyond there.
03:40: John Henry: Not financially prudent.
03:42: Charlie Rose: If you had a chance to do it over, would you do differently?
03:47: John Henry: We won the World Series. I wouldn't ask for a chance to do it over.
03:52: Charlie Rose: That's about the answer, isn't it? We did it just fine the way we did it.
03:57: John Henry: It was perfect. It was a magical year from day one.
04:01: Charlie Rose: Why do rich men and rich women want to own baseball teams?
04:08: John Henry: That's a good question. I think that probably different people have different answers. As for myself, if you're a huge sports fan and you can afford it, why wouldn't you? I mean, it would be -- I think every sports fan, if they could afford it, and they weren't preoccupied with something else, would want to do this.
04:28: Charlie Rose: And then you trust it all with a 28-year-old executive. Theo Epstein.
04:37: John Henry: I spent a year with him before -- before we named him general manager, so we were very confident. He's a brilliant, brilliant guy, who traded Nomar Garciaparra this year, and put his neck on the line in Boston. He was the face of the franchise, a very gutsy, tough thing to do.
04:56: Charlie Rose: Managing and running a baseball team is science or art?
05:02: John Henry: It's been art for 100 years. And it's only been since the introduction of what some call -- what the book called "Moneyball" is about.
05:09: Charlie Rose: Michael Lewis' book about a guy out in California.
05:14: John Henry: Right. Where it's become more science and more sort of on the more science side.
05:20: Charlie Rose: And you buy into what that guy said from "Moneyball?"
05:24: John Henry: We buy into the overall philosophy. I wouldn't call it "Moneyball." I'd call it "Large Ball," sort of the opposite of small ball. And that's really what it's really about, not playing small ball, trying to play the opposite.
05:36: Charlie Rose: Explain it to me.
05:39: John Henry: Well, we have the perfect "Moneyball" players. A guy named Mark Bellhorn, who takes about 10 pitches for at-bat, and usually gets to three and two, three balls, two strikes. And never makes contact. He will either strike out or walk. And he led the league in both. He is sort of th quintessential guy where -- there's two guys, there's a Barry Bonds -- Barry bonds would be a better example. It's home runs or walks. You want to get on base, you want to hit home runs. If you're a pitcher, you want to throw strikes, you don't want to give up walks. And performance is more important than projection, than trying to predict. And I would say that's th essence of "Moneyball."
06:20: Charlie Rose: And find those players who can do it, who others might miss because they don't realize or appreciate that talent?
06:28: John Henry: Exactly, but more and more, especially young, intelligent general managers are trending toward that philosophy.
06:35: Charlie Rose: Who are the other great managers?
06:37: John Henry: Managers?
06:40: Charlie Rose: Tony LaRussa.
06:44: John Henry: Tony LaRussa is a great manager. It's -- a lot of it is not what you see on the field. A lot of it is, as we saw in our clubhouse, how does the captain run the ship, so to speak. Sort of like 25 sailors on board, and living, eating, sleeping together. It's a very long season. So management is just as important as what you see out on the field.
07:10: Charlie Rose: Finding the right management, the right philosophy.
07:16: John Henry: Being able to run a ship, run a clubhouse, keep people happy, and productive. It's a very difficult thing to do.
07:23: Charlie Rose: Some were saying this year that it was more important for the Red Sox to beat the Yankees than it was to win the World Series?
07:31: John Henry: I think it was equally important. You know, we hadn't won a World Series in 86 years. So hard to say that that wasn't of paramount importance. But beating the Yankees, especially the way we lost last year, in game seven, we were five outs from going to the World Series last year.
07:44: Charlie Rose: And did that break your heart?
07:46: John Henry: It did. It did.
07:50: Charlie Rose: How did you get over that?
07:51: John Henry: Went after Curt Schilling, Keith Foulke. We were determined that it wasn't going to happen again.
07:55: Charlie Rose: Yeah. Is baseball healthy?
07:58: John Henry: Is it healthy?
08:00: Charlie Rose: Yes.
08:02: John Henry: It's extremely healthy. I think there were over 72 million fans this year attended. One could say it's never been healthier.
08:08: Charlie Rose: Really? And so the Washington franchise will work?
08:11: John Henry: I think it will. It's --
08:16: Charlie Rose: The old Montreal franchise?
08:18: John Henry: A lot of it depends on ownership, but the fan base is there. The demographics are there. They've got a great start, from everything I've seen. So it should be successful. Should be very successful. We had a great team. You know, we won 45 out of our last 60 games in baseball. That's tough to play that kind of baseball.
08:38: Charlie Rose: So here -- so it's now -- the Yankees win the first three games. First three games.
08:47: John Henry: Makes my mouth dry when I think about it. It was an incredible comeback.
08:50: Charlie Rose: Did you think -- you didn't think they could come back after 3-0? You pretty much were saying, let's pack it in and think about next year.
09:02: John Henry: Game three we lost 19-8. Game four, we were three outs from being swept when the best closer in the game came in, and there's no doubt about it. I was wavering at that point. It was remarkable.
09:14: Charlie Rose: And how do they do it?
09:16: John Henry: Well, if you take away those first --
09:18: Charlie Rose: One game at a time is one answer.
09:20: John Henry: That is one answer. That would be their answer, I think. But I would say that if you take away those three games, they won 45 out of 57 games. So you are not talking about a normal team. This is a team that wa extraordinary, extraordinary, extraordinarily talented and determined and hot. You put those three things together, you can win eight in a row against the best teams in baseball.
09:48: Charlie Rose: When A-Rod went to the Yankees, did you say some unkind things about my friend George Steinbrenner?
09:53: John Henry: No, I think I said unkind things about the Yankees. I think he said unkind things about me in response.
10:02: Charlie Rose: What did you say about the Yankees?
10:05: John Henry: I didn't think it was that bad, actually. I said baseball hasn't come up with an answer to the Yankees, that --
10:12: Charlie Rose: What did he say about you?
10:14: John Henry: He -- what did he say? He said that I wasn't willing to go far enough to bring --
10:19: Charlie Rose: To win.
10:21: John Henry: That I disappointed my fans, and I forget.
10:23: Charlie Rose: And did you want him to eat those words after you beat him?
10:29: John Henry: No -- oh, afterwards?
10:31: Charlie Rose: Yes. Yes. After you --
10:35: John Henry: No. No.
10:38: Charlie Rose: -- came back --
10:39: John Henry: He sent me congratulations, and he was -- he has been great. Personally, we've had a great relationship for more than a decade.
10:45: Charlie Rose: So all is well between John Henry and George Steinbrenner.
10:49: John Henry: Well, he might not say so, because he takes things personally, but I don't take them personally. So as far as I'm concerned, things are great. You would have to ask him. But I think so.
10:59: Charlie Rose: Think you'll win again next year?
11:01: John Henry: I think we have a legitimate shot. We are going to --
11:05: Charlie Rose: Now you got a winning tradition.
11:06: John Henry: Well, we've had one. We've finished second how many years in a row? We have a big goal next year. It would be to finish first in the American League East. The Yankees I think have won seven years in a row. I think we've finished second seven years in a row. So --
11:21: Charlie Rose: You want to be first in the AL East.
11:22: John Henry: Yes, before we go to the World Series again.
11:24: Charlie Rose: Thank you for joining me.
11:26: John Henry: You're welcome. Thank you.
11:27: Charlie Rose: Great to have you. Good luck to the Red Sox.
11:31: John Henry: Thanks.
11:32: Charlie Rose: John Henry, owner of the Red Sox. He and Tom Werner (ph) an others, I guess -- how many partners?
11:37: John Henry: New York Times Company. Probably a dozen.
11:39: Charlie Rose: A dozen.
11:40: John Henry: Yeah.
11:42: Charlie Rose: Thank you for joining us.