Turnover does not take place frequently in the front offices of MLB, and it is even more rare for organizations to change owners. Dave McCullough looks at the end of an era in Seattle with an ownership change that was sometime in the making, and ponders on what it means for the rest of the league.
Without fanfare, the Seattle Mariners are now under new ownership. A group led by John Stanton and Chris Larson were approved by Commissioner Rob Manfred and Major League Baseball’s ownership committee as the new owners of the Mariners on August 19. The sale and/or transfer of franchises is a rare event in MLB, this being the first since Ron Fowler purchased the San Diego Padres in 2012. Seattle chairman emeritus John Ellis said, “there’s not a soul, other than the people retiring, that will be impacted, because all of these same partners are still involved.”
Ellis refers to retiring team chairman Howard Lincoln, who has served as the leader of the Mariners organization since 1999. Lincoln was the frontman for the Nintendo Corporation, who had purchased Seattle’s major league baseball team in 1992. During their stewardship of the Mariners, Nintendo supervised the construction of Safeco Field, and oversaw the import of Japanese League superstars like Kaz Sasaki, Kenji Johjima, Hisashi Iwakuma, and the Hit Sensei – Ichiro Suzuki.
The consortium which purchased the Mariners in 1992 was led by Nintendo founder Hiroshi Yamauchi, his son-in law, Minoru Arakawa – then-chairman of Nintendo of America – as well as Larson, Ellis, John McCaw, and Frank Schrontz, for a reported $100 million. A sale price is not being reported at this time, however, the Mariners and related properties were recently valued at $1.2 billion. Stanton reportedly is buying a portion of the Nintendo stake in the club (49% in the 1992 deal) and Larson is also reportedly increasing his stake in the club. Even without exact numbers, the implications are clear – Nintendo has made a hefty profit on their investment in American baseball.
[Editor’s note: Nintendo’s net profit on the sale was $661 million, and the company will retain a 10% stake in the team.]
Yamauchi passed away in 2013 and the team has reportedly been “primed for a sale” for several years now. The massive increase in franchise value is attributable to the savvy investment in Safeco Field – which replaced the dingy Kingdome in 1999 – as well as the efforts of Ellis and Lincoln to invigorate the local fan base and put a compelling product on the field. The franchise also owes a much of it’s value to DirecTV, whose $2B TV contract certainly played a part in its increase in value. Prior to the arrival of Nintendo and Lincoln, the Mariners had never made the playoffs and were a moribund franchise with little national appeal. Under their tenure, the Mariners became a franchise admired on both sides of the Pacific, with a large influx of new fans.
For perspective, Fowler purchased the Padres a little less than four years ago for a reported $800 million. The Padres were sold – amidst dire financial straits, an ownership group in crisis, and a labor problem – in 1994 from a group led by Tom Werner to a group headed by John Moores for $80 million. Like the Mariners, the Padres had built a stadium, Petco Park, in between sales, greatly increasing the value of the franchise. But the 900% increase in valuation is not entirely attributable to either the stadium or to inflation: baseball’s labor peace and popularity has helped immensely.
The new owners in Seattle – Stanton and Larson – inherit a franchise in a league that is very healthy and primed to continue raking in profits. Recent television rights deals – both locally and nationally – have increased franchise values across the league. As Justin Gorman wrote last season, the exponential growth experienced by franchises has been felt far and wide:
The [Minnesota] Twins are a terrific case study in the economic staying power of baseball, emerging as an AL Central stalwart over the decade following their contraction rumors, winning the division six times in eight years and coming within a game of another division title in 2008. That same $99M Twins franchise currently has a $545 million new stadium and was valued in March 2015 at a staggering $895M.
As the torch passes from one group to another in Seattle it is time to yet again praise the health and vitality of our national pastime. Even though baseball faces problems – such as game length, an upcoming labor negotiation, and a decline youth participation rates – the future looks very bright in Seattle, and everywhere across the MLB landscape. New ballparks and emerging stars give us hope that twenty-five years from now when the Mariners are “sold” again, the value will again have exploded by another exponential factor. Now… can we do something about how long the season is?