M’s savior Yamauchi gone: Team’s fate now up in the air
The passing of Hiroshi Yamauchi, who was lauded for keeping the Mariners from leaving in 1992, raises questions about the future of the struggling team.
Seattle Times staff reporter
Japanese billionaire Hiroshi Yamauchi felt so indebted to Seattle, he once offered to buy 100 percent of the Mariners to keep them right where they are today.
Major League Baseball rejected that proposal, skittish about complete foreign control of the club. But officials agreed in 1992 to allow Mr. Yamauchi a simple majority stake alongside 16 local minority investors, keeping the Mariners from being sold to a group planning to move them to St. Petersburg, Fla.
Mr. Yamauchi, 85, who considered the purchase of the team a repayment to Seattle for serving as the United States launch point for his Nintendo video-gaming empire, died Thursday in Kyoto, Japan, after a steep health decline the past several months.
The future of the team’s ownership remains unclear, but Mr. Yamauchi’s baseball legacy is black and white: The Seattle Mariners would no longer exist without him.
“Mr. Yamauchi deserves unending thanks for his key role in saving baseball for Seattle,’’ said Raymond “Buck’’ Ferguson, one of the local investors who bought into the Mariners alongside Mr. Yamauchi.
Fellow minority owner Jeff Raikes added: “The idea that Mr. Yamauchi would spend that amount of money essentially as a thank you to Seattle for hosting his Nintendo headquarters in America is nothing short of extraordinary.’’
The Mariners ownership group under Mr. Yamauchi paid $100 million to buy the team from former owner Jeff Smulyan in 1992. Owners later put in an additional $112 million to cover Safeco Field construction costs.
The Mariners are thought to be worth $1 billion or more, given their April purchase of a controlling interest in the ROOT Sports regional television network.
Former Mariners general manager Pat Gillick said Thursday that Mr. Yamauchi was instrumental in bringing Japanese star Ichiro to Seattle in 2001. The Orix Blue Wave owned Ichiro’s rights and Mr. Yamauchi freed up the additional $13 million posting fee the Mariners needed to pay before they could even negotiate with Ichiro.
“Anytime I needed funds, he stepped forward and I got the money,’’ said Gillick, adding that Mr. Yamauchi supplied similar cash to bring relief pitcher Kazuhiro Sasaki to the team in 2000. “He always gave me the tools to work with.’’
The Mariners issued a statement Thursday stating: “His decision in 1992 to purchase the Mariners franchise and keep Major League Baseball in Seattle as a ‘gesture of goodwill to the citizens of the Pacific Northwest’ is legendary in this region.
“Mr. Yamauchi will be remembered for his role in moving forward the opportunity for Japanese baseball players to play in the United States. He will forever be a significant figure in Mariners Baseball history.’’
King County Councilmember Pete von Reichbauer said in a statement: “When you think of Edgar Martinez, Ken Griffey Jr., Randy Johnson and other Seattle Mariners, remember that we would not have those memories without Hiroshi Yamauchi’s commitment to keep baseball in Seattle.
“Hiroshi Yamauchi has benefited generations of Pacific Northwest families by his generous purchase of the Mariners in 1992 ... Thousands of young boys and girls are playing today on Little League fields funded by the Mariners.’’
Mr. Yamauchi’s role in the franchise beyond money remains shrouded in mystery. He famously never attended a game, declining to even travel from his Kyoto home to Tokyo in March 2012 when the Mariners opened their season there against the Oakland Athletics.
In 2004, Mr. Yamauchi transferred control of his shares in the team — by then up to 55 percent — to Redmond-based Nintendo of America, the U.S. subsidiary of parent Nintendo Corp. The move was said to be for estate-planning purposes, but Mr. Yamauchi retained “titular control’’ of the franchise, giving him the same powers as before.
What happens now is also somewhat of a mystery, given the team’s complicated ownership structure. It’s not yet known what Mr. Yamauchi’s estate plan was and whether his immediate heirs would have sway over his stake. Mr. Yamauchi’s fortune, estimated at $7.8 billion before the 2008 economic meltdown, was said by Forbes this year to have dropped to $2.1 billion. Nintendo sales had slumped in recent years and Mr. Yamauchi — who owned an estimated 10 percent of the company’s stock — took a financial hit.
His stake in the Mariners — if still subject to inheritance — would form a sizable piece of his estate. But it’s been reported over the years that he gave the Mariners shares to Nintendo of America in order to prevent them from being subject to family inheritance.
Mariners CEO Howard Lincoln is longtime friends with Mr. Yamauchi’s son-in-law Minoru Arakawa, and both represent Nintendo of America on the Mariners’ board of directors.
Arakawa is a past president of Nintendo of America and married to Mr. Yamauchi’s daughter, Yoko.
Lincoln is a former Nintendo of America vice president and in-house legal counsel to its parent company, who first approached Mr. Yamauchi — with former U.S. Sen. Slade Gorton — more than 20 years ago to gauge interest in buying the Mariners after a longstanding professional relationship with him.
Sources say Lincoln remained the team’s conduit to Mr. Yamauchi and had the closest relationship to him of any Mariners official — including other owners.
They say Lincoln has been the most powerful Mariners official since taking over as CEO in 1999 and oversees the bulk of day-to-day decision making by the ballclub.
The Mariners face key times ahead, with the team having declined to comment on whether it will retain manager Eric Wedge and general manager Jack Zduriencik.
The Mariners fell to 67-86 with a loss in Detroit on Thursday and are already assured of a fourth consecutive losing season amid steep attendance declines.
That’s prompted calls by impatient fans for the Mariners to replace absentee owner Mr. Yamauchi with full local ownership. Despite the losing, payroll cuts and declining attendance, the Mariners remain profitable due to Safeco Field and television revenue, and analysts estimate their value has more than doubled the past five years.
Lincoln was on a 10-day fishing trip with his son Thursday in a remote part of Alaska. Sources said as of Thursday afternoon he had not been reached and told of Mr. Yamauchi’s death. The funeral is expected to be this weekend in Japan.
The Mariners have internal bylaws requiring any sale of a controlling stake in the team to first be offered to minority owners and then any local group before it could be put on the open market.
Minority team owner John Stanton, a Bellevue billionaire who made his fortune in wireless communications, is thought to be the person most capable of buying a controlling stake.
Stanton bought his minority share in 2000 from John McCaw for a reported $5 million. It is not known exactly how big the share was, but McCaw had once owned 10 percent before parceling some of it off to other owners.
Three years ago, Stanton attempted to purchase an additional 10 percent in the team from top minority owner Chris Larson, who needed money to cover mounting debts. The sale was aborted when Larson found the value he’d get for the stake to be too low.
Larson retains 30.6 percent of the club, but a recent divorce and his financial struggles make him unlikely to acquire a controlling stake.
Sources say that Stanton has continued to try to increase his stake in the ballclub.
Other potential players on the team’s ownership front include minority stakeholder Raikes, 55, who announced last week he’d be stepping down as CEO of the Bill & Melinda Gates Foundation.
Raikes, a former Microsoft executive, said Thursday he plans to devote the bulk of his time to other philanthropic endeavors.
He dismissed any question of increasing his ownership stake as “rumors” and said he remains just one minority owner among many.
Geoff Baker: 206-464-8286 or firstname.lastname@example.org. On Twitter @gbakermariners. Read his daily blog at www.seattletimes.com/Mariners.