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A group of local investors announces plans to buy the Seattle Mariners on January 23, 1992.
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On January 23, 1992, a group of local investors led by a Japanese billionaire announces plans to buy the Seattle Mariners, which would thwart a plan to move the team to Florida. Calling itself the Baseball Club of Seattle, the group has members mostly from Nintendo of America, Microsoft, and McCaw Cellular Communications. But the biggest investor by far is Hiroshi Yamauchi (b. 1927), head of Nintendo in Japan. Major League Baseball’s commissioner cites a policy opposing foreign investment. Getting the necessary approval takes nearly six months, but finally the sale is completed and the new owners are able to declare the Mariners "Safe at Home."
A Franchise in Trouble
Major league baseball was on the ropes in Seattle in late 1991. Jeff Smulyan (b. 1947), who had bought the Seattle Mariners just two years earlier, already had financial problems and was considering moving the team as a solution.
Smulyan, head of an Indianapolis-based radio, TV, and magazine publishing company, had taken out loans to buy the M’s for $76 million. He thought he could make baseball successful in Seattle, but two factors conspired against him. First, he had believed the owners of each major league team would have to pay no more than $1 million for losing a lawsuit filed by the players union. The actual bill per team was $10.77 million. Second, player salaries skyrocketed. The Mariners’ payroll was $8 million when he bought the team. Two years later it was $23 million. In those two years, attendance had increased from 1.3 million to nearly 2.2 million, and in 1991, the Mariners finally had a winning season -- after 14 years of trying. But total revenues were far below the American League average.
Smulyan had complained to King County about the revenue gap. He believed the county-owned Kingdome, a multipurpose stadium the Mariners shared with the National Football League’s Seattle Seahawks, was a part of the problem. Meanwhile, his creditors were demanding payment on his loans. In August 1991, The Seattle Times reported that a Security Pacific Bank internal document said Smulyan had agreed to refinance or put the team up for sale in November and move it before the 1993 season. Smulyan strongly denied he planned to move the team. But on December 10, 1992, he announced that the Mariners were for sale. The price was $100 million. If a local buyer was not found in 120 days, he planned to take the team to Tampa, Florida, where a covered stadium was waiting for a big-league tenant.
Seattle already had been jilted by a major league team. The Seattle Pilots headed to Milwaukee in 1970 after just one season. That move prompted state attorney general Slade Gorton (b. 1928) to file a suit that resulted in Seattle getting the Mariners, an expansion team, in 1977. Since then, fans and politicians had heard persistent complaints from team owners, with losing the team always a possibility. This time, however, the threat was real, and time was running out.
Looking for Investors
Gorton, who was elected to the U.S. Senate in 1980, did not want the Mariners to get away. He started looking for possible buyers. A huge one surfaced unexpectedly, from Japan. Yamauchi, one of Japan's richest men, had corporate and family ties to the Seattle area. His son-in-law, Minoru Arakawa (b. 1946), had lived there for 15 years and was president of Redmond-based Nintendo of North America. Arakawa told his father-in-law about the Mariners situation. Yamauchi shocked him by saying he would put up the entire $100 million, not because he cared about baseball -- he didn’t -- but to thank the community for contributing to Nintendo’s success as the world leader in video game production.
Gorton expected Yamauchi would have trouble gaining Major League Baseball approval unless local people were involved. One of the most eager was Chris Larson (b. ca. 1958), senior program manager at Microsoft and an enthusiastic baseball fan. He recruited six colleagues to join him. Also stepping forward were John E. McCaw Jr. (b. ca. 1951), executive vice president of McCaw Cellular Communications, and two others from that company. Less important as investors, but key figures because of their stature and longtime community ties were a pair of soon-to-be retiring CEOs -- John Ellis (b. 1928) of Puget Power & Light Co. and Frank Shrontz (b. ca. 1931) of Boeing. They each chipped in a token $10,000, as did Arakawa and Howard Lincoln (b. 1940), chairman of Nintendo of North America.
The group called itself the Baseball Club of Seattle and decided to offer $100 million for the team, plus $25 million in operating expenses. Yamauchi’s portion was reduced to $75 million. The next biggest investors were Larson at $27.5 million and McCaw at $11.25 million. Ellis was picked to lead the group’s effort to gain baseball’s approval.
They went public on January 23, 1992, with a press conference at Seattle’s Madison Hotel. "It’s all good news," Ellis said. "This is new ownership for the Mariners that will finally bring financial solvency, permanency and local control of our team." George Duff, head of the Greater Seattle Chamber of Commerce, held up a baseball and said, "This deal will now permit us once and for all to take this little critter off the endangered species list" (Egan, New York Times, 1992).
Fighting for Approval
Major League Baseball’s reaction was discouraging. Commissioner Fay Vincent immediately cited "a strong policy" against approving investors from outside the U.S. and Canada, and called the Seattle group’s chance unlikely. It was a hard stance to defend, especially since baseball had no such written policy and Japanese already owned three minor league teams. Newspaper editorials said resistance to the bid amounted to racism, or at least xenophobia. Public opinion ran in the Seattle group’s favor, but Major League Baseball’s team owners still had to be convinced.
In early June, baseball’s ownership committee insisted that the local elements of Seattle’s group be strengthened. Yamauchi agreed to further reduce his share to 49 percent; a seven-member board of U.S. born investors was formed; and Ellis was named managing general partner, while being required to increase his investment to $250,000. The clear lines of local control did the trick. On June 9, the ownership committee unanimously recommended sale of the Mariners to the Baseball Club of Seattle.
The ownership change was celebrated July 16, 1992, in the Kingdome as a second opening night. Members of the group, Gorton, and other politicians hosted a sign shaped like home plate. It showed the team logo -- a baseball with "M’s" printed on it -- and a triumphant slogan, "Safe at Home." By ending 11 years of out-of-town ownership, the sale brought relative stability to a franchise that had seemed in danger of moving almost from its inception. In its first 10 years of ownership, with a new stadium and lucrative broadcasting contracts, the Baseball Club of Seattle saw the estimated value of its investment grow from $71 million to $373 million.
Art Thiel, Out of Left Field: How the Mariners Made Baseball Fly in Seattle (Seattle: Sasquatch Books, 2003); Bill Knight, "History of Seattle Mariners Reads Like a Saga," Seattle Post-Intelligencer, September 14, 1995, p. A-8; Terry Mcdermott, "Smulyan Told Bankers He’d Sell M’s -- New Financing or Sale Are Conditions of Loan," The Seattle Times, August 23, 1991 (www.seattletimes.nwsource.com); Timothy Egan, "Japanese Bid For Seattle Team Gets Baseball’s Cold Shoulder," The New York Times, January 24, 1992, p. A-1; Tom Farrey and Joni Balter, "M’s Sale Gets Go-Ahead," The Seattle Times, June 9, 1992 (www.seattletimes.nwsource.com).
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