While Major League Baseball continues to thrive, it seems that almost every week there is a story on one club or the other being hit with some type of financial calamity. Whether it’s been the Rangers, Mets, Dodgers, or a long list of clubs out of debt compliance, Bud Selig seems to be fighting a war on many fronts every day.
The issue of divorce can throw a wrench into the works, and we’re not talking just the Dodgers. The Moores get divorced, the sale of the Padres takes place. As they say, “it” happens.
The same is now happening within the ownership of the Seattle Mariners, and with it, key details into the amount ownership holds, and talk of club value have surfaced.
Based on an in-depth story by Geoff Baker of the Seattle Times, the value of the Mariners is much higher than what has been reported through the most recent Forbes valuations (Note: Forbes publishes the valuations in April, but the numbers are from the prior season. Therefore, the most recent figure available show Forbes’ projection of value for each of the 30 clubs for the 2010 season).
The data comes available via two court-order appraisals as part of the divorce proceedings of minority owner Chris Larson. Larson is the second largest stake holder of the club at 30.6 percent, while the majority stake is owned by Hiroshi Yamauchi at 55 percent. As Baker reports, for estate planning purposes the Yamauchi’s stake was succeeded in 2004 to Nintendo of America as owners.
In the divorce case, Larson’s lawyers, along with lawyers from his estranged wife Julia Calhoun, have reported two (understandably) wildly divergent valuation figures. Larson’s lawyers say that the value of the Mariners is $551 million while lawyers for his ex-wife say they’re worth $750 million. The most recent Forbes valuation is $449 million.
SEE HISTORICAL FORBES VALUATION NUMBERS FOR MLB
The reason for the wild difference? Larson’s lawyers are looking at the physical territory that the Mariners have while Calhoun’s lawyers are looking at the massive broadcast territory which includes Washington, Alaska, Montana, Oregon, Idaho, Hawaii, Alberta, Canada and Asia. That television rights agreement that began in 2007 with FSN (now, ROOTS Sports), is a 10-year, $450 million deal. With the Angels seeing a deal believed to be worth $3 billion, and the Texas Rangers reaching a broadcast extension with FSN believed to be in excess of $1 billion, the Mariners are likely to see a substantial increase in rights revenues in 2017 when the contract is up for renewal.
SEE MLB’S BROADCAST TERRITORY MAP
With Larson being hit with the divorce and Yamauchi losing billions as the global economy has been hit (he reportedly lost $300 million in one day due to Nintendo stocks crashing), questions have been swirling as to whether Larson’s minority stake will be completely sold off, and possibly that some, or possibly all of Yamauchi’s majority stake is up for grabs.
Fans, of course, upon hearing the news, have been up in arms. One fan via Facebook was heard to say, “If [the Mariners] don’t sign Fielder, I’m buying an Angels hat.” Fielder, of course, may have something to say about his final destination, and even with the higher valuation price, it’s not as if every cent of that is available for investing.
Fielder may be a good add, but many (this author included) wonders if he adds that much value to the team’s overall at this point. The Mariners see a plethora of holes to fill in the line-up. That said, ownership will be paying Felix Hernandez $19 million this season with a team that ranked last in the league in total runs (556) and slugging (.348). The Mariners have a power outage the likes of which the Pacific Northwest hasn’t seen since the Columbus Day storm. While Fielder would certainly assist in increasing power at the plate, the issue is more systemic. Fielder is but one piece on a team that needs many.
With the pressure from fans, this new financial information showing that the Mariners are worth much more than previously believed, will the club succumb and dive headlong into the free agency market, or bide their time? One thing that will be impossible for the Mariners to say: they certainly aren’t dirt poor.
Maury Brown is the Founder and President of the Business of Sports Network, which includes The Biz of Baseball, The Biz of Football, The Biz of Basketball and The Biz of Hockey, and is a contributor to Forbes SportsMoney blog.. He is available as a freelance writer. Brown's full bio is here. He looks forward to your comments via email and can be contacted through the Business of Sports Network (select his name in the dropdown provided).
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