Seattle Tells Nintendo: Let’s Play Ball

Wall Street Journal; New York; Jan 29, 1992; Chapman, Bruce;

Edition: Eastern edition
Start Page: PAGE A12
ISSN: 00999660
Subject Terms: Syndicates & syndication
Professional baseball
Prejudice

Companies: Seattle Mariners
Nintendo of America Inc
Nintendo Co Ltd

Abstract:
Bruce Chapman chastizes the hasty reactions of some in Seattle to the offer by a syndicate that includes the family that owns Nintendo to purchase the Seattle Mariners baseball team. Chapman argues that such “anti-Japan” antics have no place in Seattle, nor elsewhere.

Full Text:
Copyright Dow Jones & Company Inc Jan 29, 1992

Correction

A Jan. 29 editorial page story (“Seattle Tells Nintendo: Let’s Play Ball”) on the proposed purchase of the Seattle Mariners by a group led by the family that owns Nintendo reported that the Mariners’ present owner, Jeff Smulyan, borrowed $77 million to buy the team. A spokesman says that Mr. Smulyan borrowed $57 million — the balance was an investment by the investment bank, Morgan Stanley. The spokesman also denies that Mr. Smulyan has received an offer from anyone in Tampa to buy the Mariners. (WSJ Feb. 7, 1992) 920129-0161

The hostility to the proposed purchase of the Seattle Mariners by a syndicate that includes the family that owns Nintendo is the most embarrassing moment in baseball history since the protests against the Brooklyn Dodgers’ decision to take Jackie Robinson into the major leagues.

Xenophobes are muttering that the new owners will turn the team into the “Seattle Marios” and move them to Japan. Baseball commissioner Fay Vincent predicted rejection of the bid last week: “Baseball . . . has developed a strong policy against approving investors from outside the U.S. and Canada.” If so, this policy has never before been announced.

In any event, Nintendo of America is headquartered in Redmond, a suburb of Seattle, and employs 1,400 Americans. The company’s president, Minoru Arakawa, and his father-in-law, Hiroshi Yamauchi, president of Nintendo’s Japanese parent company, were approached by Sen. Slade Gorton to help prevent the Mariner’s current owner, Jeff Smuylan, an Indiana radio and television station owner, from moving the team. Mr. Arakawa and Mr. Yamauchi decided that they wanted to “express their gratitude” to the community in which they had been doing business, and offered $75 million for 60% of the team.

To those who have tut-tutted that such an offer at this tense period in U.S.-Japan relations was “unfortunate,” Mindy Cameron, the editorial page editor of the Seattle Times replied on Jan. 19: “Wrong. The timing is exquisite. . . . {The proposal} was a dramatic portrait of what it means to be a major player in the emergent Pacific Rim. It was a powerful lesson from the Puget Sound region to a confused nation about successful collaboration across national and international borders.”

Seattle port commissioner Paul Schell points out, “American baseball has players from Latin America and teams in Canada. Why shouldn’t we have fans in Japan?”

One justification that Commissioner Vincent and the owners’ cartel he speaks for has offered for the veto of the Seattle group offer is a 1985 major league policy of “local control.” But at least four other teams have principal owners who do not live in the community: the New York Yankees, the San Diego Padres, the Houston Astros and the Baltimore Orioles. Mr. Smuylan himself lives in Indianapolis. None of the Mariners’ previous owners have lived in Seattle either.

In fact, since Mr. Yamauchi (who lives in Kyoto) has given Mr. Arakawa an irrevocable proxy, the Nintendo family’s 60% share of the Mariners would be vested in a man who has lived in the Northwest for 15 years, has located his business here and has raised a family here. The remaining 40% would come from other major local businessmen: Christopher R. Larson of Microsoft, John McCaw Jr. of McCaw Cellular Communications, Frank Shrontz of Boeing and John W. Ellis of Puget Sound Power and Light.

Seattle, whose lumber and aerospace economy is one of the most export-oriented in America, is unperturbed by the Japanese origins of Mr. Arakawa. A former governor and U.S. senator, Daniel J. Evans, termed the instant opposition to the bid “clearly racist and . . . abominable” in a commentary on local television.

Although Mr. Smuylan has been telling everyone who will listen what a poor baseball town Seattle is — because outdoorsy Northwesterners supposedly would rather spend their summers camping than cheering the home team in the Kingdome — attendance last season was more than two million, higher than that of the pennant-winning Atlanta Braves’ regular season. This year, businessman Herman Sarkowsky has led a campaign that so far has raised $10 million in new advance ticket sales, television rights and advertising. When fans heard of the Seattle group’s bid, they swamped the ticket office with a record-breaking number of season orders.

If the local ownership argument is silly, and if Seattle is able to support a team, why would Commissioner Vincent oppose the sale? It’s clear why Mr. Smuylan would. He borrowed $77 million to buy the Mariners, and has been running the team at a loss. He has an offer of $125 million from a Tampa, Fla., syndicate for the team. But under the present terms of his lease of the Kingdome, he must accept an offer of $100 million from owners willing to keep the team in Seattle. The Seattle group’s offer threatens to cost him $25 million in forgone profit.

And it’s also beginning to be clear why the owners of baseball’s other teams oppose the purchase. The Seattle-based group is willing to put up not just the $100 million needed to pay off Mr. Smuylan, but an additional $25 million, for a total of $125 million. The extra $25 million would be plowed into the team. The New York Times reports that other league owners “fear that the Japanese owner {of the Mariners} would gobble up the most attractive free agents with lavish offers and would pay such high salaries that they would escalate the salary scale even . . . higher.”

The other team owners may also fear the possibility, widely discussed in Seattle, that the Mariners will sign a cable TV contract in Japan. Exhibition games might follow, souvenir paraphernalia merchandised, and Japanese “baseball tours” to Seattle arranged.

Both these worries get little sympathy here in Seattle. “What gall!” says Donald Hellman, a Japan expert at the University of Washington. “Here New York and the other rich teams have used their muscles to squeeze our debt-ridden team on salary bids for years, and now they claim that Seattle’s new access to money constitutes unfair competition!”

If argument fails to move the major leagues, Seattle fans expect local and state officials to start playing legal hardball. The leagues are, by virtue of a quirky Supreme Court decision, exempt from federal antitrust legislation, but they are not exempt from state law. Sen. Gorton and Washington’s attorney general, Kenneth Eikenberry, believe that they can make a strong claim to a state court that the league is unlawfully suppressing competition.

Seattle appreciates major league baseball. It also appreciates its global trading partners. The Seattle group’s offer would make the Mariners more of a local team than ever before. In an exporting town like this, part of being local is being international. People here hope that the major leagues can accept that.

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Mr. Chapman is president of the Discovery Institute, in Seattle.