erik lundegaard

Howard Lincoln and Chuck Armstrong, Accountable to No One (Or How the Seattle Mariners Became Soylent Green)

I've been reading Jon Wells' “Shipwrecked: A People's History of the Seattle Mariners” and having trouble not throwing the book across the room. It keeps reminding me of all the golden opportunities the M's front office have wasted over the years.

Has any team had more talent than that 1995-1997 Mariners yet never made it to the World Series? We had the best player in baseball (Ken Griffey, Jr.), the best power pitcher in baseball (Randy Johnson), one of the greatest shortstops of all time (Alex Rodriguez). Throw in a batting champion like Edgar Martinez, a 40-HR/120-RBI man like Jay Buhner, and your various Tino Martinezes, Dan Wilsons, Jeff Nelsons and Jamie Moyerses. The underachievement is stunning.

But it gets worse in the 2000s.

The following is a chart of average attendance at Mariners games at Safeco Field since 2001:

Average attendance, Seattle Mariners, 2001-2012

source: ESPN.com

You'd think if you ran an organization that lost more than half of its customers in a 10-year span you'd lose your job. Certainly Mariners' managers and general managers have come and gone during this period. But the main guys, the guys who are really running the show, M's CEO Howard Lincoln and M's president Chuck Armstrong, keep on keeping on. They occasionally pepper the local news with their idiotic comments but they never lose their jobs.

How is that possible?

Well, as M's fans know, the majority owner of the Seattle Mariners baseball club, Nintendo's Hiroshi Yamauchi, is the ultimate absentee owner. Even when the Mariners traveled to Japan this spring for two regular season games against the Oakland A's, he couldn't be bothered to make it to the park. To this day, he's never seen his team play.

Yet you'd think he'd notice the drop in gate receipts. The drop in profit. The drop in value.

And there's the rub. During the 10-year span that M's attendance has been cut in half, from an average of 43,709 in 2002 to an average of 20,654 so far in 2012, the value of the ballclub, according to Forbes magazine, has almost doubled: from $373 million in 2001 to $585 million in 2011.

How is that possible?

For one, revenue has steadily climbed while operating income has remained in the black:

Year 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Revenue (in millions) 166 167 169 173 179 182 194 189 191 204 210
Operating Income 14.1 23.3 17 10.8 7.3 21.5 10.1 3.8 10.5 9.9 2.2

source: Forbes Magazine

Of course, there's some dispute with these numbers. A few years back, Deadspin published the financial documents of several ballclubs, including the Seattle Mariners, and the numbers didn't quites match Forbes' numbers. (It makes one wonder where Forbes gets its numbers.)

Even so, in terms of revenue and operating income, at least in the Forbes version, the M's look like they have a good business model.

But if you look at operating income rank among MLB teams, of which there are 30, the picture isn't so rosy:

Year 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Operating Income 14.1 23.3 17 10.8 7.3 21.5 10.1 3.8 10.5 9.9 2.2
Op. Inc. MLB Rank 9 1 1 10 23 9 23 27 22 23

26

source: Forbes Magazine

The Mariners used to turn the greatest profit in the game. Now we're near the bottom. It's like the attendance figures above.

At the same time, the M's value as a ballclub is never near the bottom among MLB teams. Even during these dog days—and man have they been dog days—the rank of the team's value has stayed fair to middling:

Year 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Valuation (mil$) 373 385 396 415 428 436 466 426 439 449 585
Forbes Ranking 6 6 5 5 8 12 11 13 14 15 12

source: Forbes Magazine

Why?

In my research, I came across a good 2010 piece on Marinercentral.com, in which the unnamed author pulled together much of the same information I was pulling together, and he asked some of the same questions I was asking. His conclusion? The M's don't have competition. They run a monopoly in the Pacific Northwest. The geographic isolation of the Seattle Mariners has always been a pain to its players, who have to travel farther and more often just to get a game going, but it's a boon for guys like Lincoln and Armstrong who don't have to worry about a decent product on the field, since, for MLB fans in the Pacific Northwest, there's only one product: your Seattle Mariners. It's doesn't matter that lately the Mariners have become the baseball equivalent of soylent green—the only food available to futuristic denizens in the infamously bad 1973 sci-fi film of the same name. To Lincoln and Armstrong, it's still green.

Our MarinerCenteral writer writes, of towns in Idaho and Montana, Alaska and Oregon:

If we add those markets together in conjunction with the Seattle-Tacoma market, that gives us a total of 4,468,210 homes – which easily vaults the media market in to which the Mariners broadcast firmly into the top 3 or 4 in the country!!

Then he reminds us how well the M's, with Ichiro on board, do in Japan:

...in 2004 they also enjoyed revenues from a half-dozen Japanese firms who bought advertisement at Safeco with the idea of marketing to Japanese audiences watching Mariner games. That article in the Seattle Business Journal quoted Howard Lincoln as saying, “If there was no Ichiro, there would be no broadcast of games back to Japan, and none of these companies would be interested in Safeco Field.”

All of this goes a long way toward explaining why Howard Lincoln and Chuck Armstrong still have jobs. Yes, they've taken a once promising franchise and turned it into a joke: a franchise first in attendance that is now second-to-last; a franchise first in operating income that is now near the bottom; a team that used to be feared but is now ... not. But that team is never in the red, the overall value of the club has gone up (as the value of all clubs have gone up), and its value-ranking among MLB teams is buoyed by its isolation in the Pacific Northwest.

Smarter baseball men running the show, and paying attention to the product on the field, might have widened the revenue streams rather than narrowed them by half, as Lincoln and Armstrong have done. But Hiroshi Yamauchi doesn't seem to care about this. He doesn't seem to care about the quality of the product. He doesn't seem to care that we, and he, have lost face in Major League Baseball.

At some point it's going to matter. At some point the loss of the local fanbase will be too great to be compensated by other revenue streams. At some point, Lincoln and Armstrong, and maybe even Yamauchi, will realize that soylent green isn't just green; it's people.

Safeco Field, April 15, 2012

What Lincoln and Armstrong have wrought: the crowd at Safeco Field on April 15, 2012, five minutes before gametime. (Photo via Darren Rovell on Twitter.)


Posted at 07:38 AM on Wed. May 02, 2012 in category Seattle Mariners  
Tags: , ,

COMMENTS

Tim wrote:

Well-said. Chuck and Howard are where the fault lies.

I tend to cut Yamauchi some slack; he never made any secret about his disinterest in actually running a team, he basically put up the purchase money just to do the community a favor. But it would be nice if he took an interest in his surrogates' mismanagement. As it is, he's a non-entity and Howard Lincoln is simply not accountable to anyone (and Armstrong is accountable only to Lincoln), he may as well be the sole owner.

This year's bullshit pricing system is only the latest evidence that Lincoln, et. al have no idea how to run the team as A BUSINESS, forget whether or not they can run a successful team on the field. If there WAS someone above them in the hierarchy maybe we'd get some change.

Ideally, one of the other minority owners would buy out Lincoln's share, but that seems unlikely with Chris Larson's troubles. Maybe Larson can sell his share to someone who will want to buy Lincoln out.

Comment posted on Wed. May 02, 2012 at 06:50 PM

Mister B wrote:

Yamauchi — as head of Nintendo Japan — put 60% of the purchase price as a gift to this area and was forbidden by major-league baseball (as part of the purchase agreement) from any involvement in the day-to-day decisions of the ballclub.

Prevailing theories are that he had some involvement in the signings of Ichiro and Johjima, but what's the current ownership (in terms of decision-making) nowadays? Is it Larson? Is it Nintendo America (I believe I read somewhere that Yamauchi was involved in some kind of estate transfer involving Arakawa recently)?

Is it typical that the average local baseball fan isn't really sure what's going on at the top? Does the average fan of any of the other MLB teams know who's running the show at the top of their favorite team?

We got into this mess because the commissioner put us here. How and when will it finally get resolved?

Comment posted on Wed. May 02, 2012 at 10:13 PM

Jon Wells wrote:

There's plenty of blame to go around, but I really don't think the Comissioner put us in this mess. Yamauchi doesn't like baseball, doesn't know much about baseball and lives thousands of miles from Seattle. There's no way he'd be running the team himself even if he were allowed to run the day-to-day operations.

Comment posted on Fri. Jun 15, 2012 at 09:51 AM

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