December 18, 2011 in Sports

Divorce trial puts focus on Mariners’ true worth

Geoff Baker Seattle Times

SEATTLE – Two court-ordered financial appraisals of the Mariners have concluded the team is worth far more than previously believed.

For the past three weeks, the divorce trial of Mariners minority owner Chris Larson has played out in King County Superior Court. At issue is dividing a vast estate of homes, stock, commercial real estate, artwork, luxury cars and other assets, which has put the value of Larson’s 30.6 percent ownership of the team front and center.

An expert put forth by Larson concludes the total value of the Mariners’ franchise is $551 million, while an appraisal done on behalf of his wife, Julia Calhoun, states the team is worth $750 million. Both figures dwarf a $449 million estimate published in March by Forbes magazine – which did not have access to inside financial details – and are far greater than the $212 million invested by Mariners owners to buy the team in 1992 and help build Safeco Field.

Word of the appraisals comes as debate rages throughout Seattle about whether the Mariners can afford to compete for free agent Prince Fielder, seeking a multiyear contract well beyond $100 million. It also comes at a critical time for Mariners ownership, with Larson uncertain of maintaining his team stake while 55 percent majority owner Hiroshi Yamauchi has seen declines to his vast fortune.

A pretrial brief submitted last month by Larson’s lawyer, Thomas Hamerlinck, stated that the retired Microsoft executive hopes the court won’t “order a property award that essentially requires him to sell all or part of his interest in the Mariners.”

Larson has proposed a $104 million property assets settlement with Calhoun that would include a $25 million in cash payouts over the next year and clear her of roughly $232 million in remaining estate debt. He estimates the estate’s net worth at $463 million, but argues that $357 million of that – including the Mariners’ stake – was created by him alone and should not be shared in any settlement.

Calhoun counters that the net worth of their entire estate is $572 million and should be split down the middle. She also wants $105 million of that in cash paid out over four years and her name cleared from all debt. Larson argued that he can’t pay that much cash and would have to sell his stake in the team.

Final arguments were heard Thursday, and a decision by Judge William Downing is expected later this week.

Some of the most interesting testimony in the court battle that will formally end a 25-year marriage involved the Mariners, who were granted a court order sealing their specific financial details from public view. Calhoun hired Don Erickson, founder of Texas-based Erickson Partners Ltd. and a specialist in sports-team valuations, to appraise Larson’s stake in the ballclub. He testified that he arrived at an overall $750 million value for the Mariners because they are on an “up trend” with the same potential to maximize franchise worth as the Texas Rangers and Houston Astros.

Erickson added that the team reaches “one of the largest markets in all of baseball” including Washington, Oregon, Montana, Alaska, Hawaii, Alberta, British Columbia and Asia. He cited the team’s 10-year, $450 million regional television contract with Root Sports and said there is potential for greater revenue later.

In closing arguments, Calhoun’s lawyer, Janet George, said of the Mariners: “We care if they win or lose. But in terms of the balance sheets, they have one of the best balance sheets.”

But in his closing, Hamerlinck countered that Erickson’s appraisal was “pie in the sky” and that the Mariners are closer to a fit between the larger Rangers and the smaller San Diego Padres.

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