Declining attendance contributed to a loss of more than $7 million in 2011 for the Mariners. Attendance and player payroll are projected to be down from 2011 this season.
After a last-place season with record-low attendance, the Mariners have reported an operating loss for just the second time since Safeco Field opened in 1999.
The Mariners are required to make an annual financial report to the Washington State Public Facilities District (PDF), which owns and oversees the stadium for the state of Washington.
According to the report, the Mariners’ net loss from business operations for fiscal year 2011 was $7,344,000. Rebecca Hale, the Mariners’ director of public information, said the club anticipated the loss because of flagging attendance, among other factors.
The Mariners drew 1,896,936 fans in 2011, a season in which they lost 95 games and finished last in the American League West for the sixth time in the past eight years. Mariners attendance has declined 1.64 million since its peak at 3,540,482 in 2002.
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“It’s never a good thing to have an operating loss, but in this case, based on revenue projections and our decision to exceed our major-league payroll budget, we ended up with a loss for 2011,” Hale said. “But it was something we had planned for and budgeted for.”
Mariners president Chuck Armstrong was not available for comment.
The Mariners won’t release season-ticket sales for 2012 until April or May, but Hale said attendance estimates “probably will be adjusted downward from last year.” Player payroll is likely to decline as well.
Hale said the team also made a “fairly substantial” capital investment in ballpark improvements. She was referring to $9 million spent for new LED scoreboards and renovations to the Bullpen Market area.
The Mariners’ only other operating loss occurred in 2008, a $4.5 million deficit. However, the Mariners and the PFD have an agreed-upon “special calculation” to determine the annual amount to be paid toward lowering the team’s net loss of $200 million from the time the current ownership group purchased the team in 1995 until Safeco Field opened in the middle of the 1999 season. If that loss is wiped out before the lease expires in 2018, the Mariners will share 10 percent of their annual profits with the PFD.
In 2008, according to the “special calculation” formula, the Mariners’ $4.5 million deficit was actually a $1.9 million profit. This time, however, the special calculation was similar to the Mariners’ figure — a negative $7,356,000. That means that for the first time, the Mariners’ cumulative net loss figure increased, to $45,431,000. Since 1999, the cumulative net loss has been reduced almost 78 percent.
According to the lease, the special calculation is determined by making certain adjustments to the generally accepted accounting principles: add depreciation/amortization of $23,915,000; subtract player signing bonuses of $14,369,000; subtract non-ballpark capital expenditures of $495,000; subtract ballpark capital expenditures of $9,063,000.
After the operating loss of 2008, the Mariners earned profits in 2009 ($3.2 million) and 2010 ($1.7 million). Even in profitable years, they say they have never made a distribution to ownership.
Larry Stone: 206-464-3146 or email@example.com