“CEO to CEO” with Mariners Chairman & CEO Howard Lincoln and Chamber President & CEO Phil Bussey
Posted by kims in Articles, Featured
Seattle Mariners Chairman & CEO Howard Lincoln talks with Chamber President & CEO Phil Bussey
- How do you think the sports industry and specifically the Mariners influence our region’s economy?
- What are some growth opportunities for the sports industry and for baseball in this region?
- Reflecting on your years with the Mariners, and before that, with Nintendo of America, what do you see as unique – both positive and challenging aspects – about doing business in the Seattle area?
- How has the economy impacted the sport of baseball, and the Mariners?
- Has Safeco Field made that much of a difference to the success of Mariners baseball?
- The Chamber provides opportunities for businesses to work better, faster and cheaper. In your business, what are you doing as an organization (off the field) to be better, faster and cheaper?
- What’s the strategy for the rest of the season?
1. How do you think the sports industry and specifically the Mariners influence our region’s economy?
The Seattle Mariners are a regional franchise. Our “home territory” covers Washington, Oregon, Idaho, Montana, Alaska, British Columbia and Alberta. With the exception of the Toronto Blue Jays who have all of Canada, it is the biggest geographic territory in Major League Baseball, which means we also have a widely dispersed fan base.
From surveys we do of our fans every other year, we know that the majority of our 2-plus million fans come from Washington state (76%). However, 61% of our fans tell us they are coming from outside King County and they travel up to 3 hours to get to the ballpark. The coverage of our full schedule on FSN Northwest and on the 710 ESPN/Mariners Radio Network throughout the region is a powerful promotion for this area. And because many of our games are seen live on TV in Japan, Seattle has become a vacation destination for Japanese visitors on par with New York, Los Angeles, Las Vegas and other major U.S. tourist cities.
The fans that are traveling here from great distances, whether it’s Spokane, Boise, Anchorage or Tokyo, are not just buying Mariners tickets and souvenirs. They’re staying in hotels and eating meals in restaurants, going to the Space Needle and Pike Place Market. Those fans are bringing new dollars into King County, not just redistributing discretionary income that would have been spent here anyway.
2.What are some growth opportunities for the sports industry and for baseball in this region?
The biggest opportunity for all sports is in the fast changing landscape of unique sports content and how fans receive that content. Rather than just going to the stadium or watching a game at home, technology is making it possible for fans to be consumers of the content when, where and how they choose. Right now, the focus is on mobile technology and the delivery of unique original content and the development of applications to access the content.
The availability of smartphones is exploding, and the technology continues to improve, become faster, easier and more accessible. The move is toward more interactivity, including social media components, that allows fans to participate in and customize the content to their exact preferences.
Of course, the challenge is to stay ahead of the curve in this fast moving arena.
While fans tend to focus on the 25 Major League players in our dugout, we have an additional 259 professional baseball players who are employees of the Mariners. These players are spread around six minor league teams and two baseball academies in the Dominican Republic and Venezuela. In addition, we have 281 full-time employees and 926 day of game staff and 73 part-time employees.
3. Reflecting on your years with the Mariners, and before that, with Nintendo of America, what do you see as unique – both positive and challenging aspects – about doing business in the Seattle area?
Seattle is a great place to take chances. There is a real entrepreneurial spirit here that encourages people to try new things. It may sound cliche, but there is something very special about the people who choose to make Seattle and the Northwest their home. There is a real pride in being from here, and people work hard at succeeding, not just for themselves, but for the benefit of the region. I have been impressed from the moment I arrived here in 1967 that the people and the businesses are community-oriented, always seeking ways to support community efforts.
We also have a highly educated population base and skilled workforce, which opens up all kinds of opportunities for business development and growth that are not necessarily available in all parts of the country.
In terms of challenges, like any other business we face a variety of challenges in doing business in the Seattle area. But one stands out. Transportation. Getting fans to and from Safeco Field is critical to our business. Thus, we are very supportive of our state’s efforts to construct a new 520 bridge and the tunnel to replace the aging viaduct. We hope to see the completion of these projects in a timely fashion.
4. How has the economy impacted the sport of baseball, and the Mariners?
Without a doubt, the Mariners, and professional sports in general, have not been immune to the effects of the economy. Individuals and companies are very deliberate with their discretionary spending. We have a very strong and loyal fan base, and even though our total season ticket numbers are up this year over last year, we have seen some long-standing accounts that have reduced their total tickets or moved into what they see as more affordable locations.
We have certainly been impacted by the great recession.
We have seen many of our revenue sources decline and we have had to adjust our annual operating budget downwards. One thing that has remained constant is the commitment of our ownership group to invest any profits we make back into our business. There have been no distributions of profits to our ownership group since it purchased the Mariners in 1992.
The good news for us is that we are holding steady with attendance this season and the fans who come out to the ballpark are enthusiastic and supportive. We have always made sure that affordable tickets are available for all fans and families. We don’t take our fans for granted. They deserve better and we are working hard to get the product on the field back up to a championship-caliber level. We believe the Mariners are headed in the right direction.
5. Has Safeco Field made that much of a difference to the success of Mariners baseball?
Last season, Safeco Field celebrated its 10th Anniversary. When the process of building a new ballpark began back in the 1990′s, the Mariners and the Public Facilities District (PFD, the public authority created by the legislature to build and oversee the operation of the ballpark) agreed that the goal was to stabilize this franchise and make baseball viable in the Northwest. We also felt it was important for the fans here to see baseball the way it is meant to be played—outdoors and on real grass. While there were no guarantees, Safeco Field has done what it was intended to do—provide the Seattle Mariners with the financial stability the franchise lacked for the majority of its history, and provided the people of the Northwest with a great place to watch baseball. It has become a community gathering place.
The public/private partnership has been extremely successful. The bonds that were sold to build Safeco Field are scheduled to be paid off in 2012, four years early, and the garage bonds were retired last year, eight years ahead of schedule. And in an arrangement that is unique to Major League Baseball, and perhaps all of professional sports, the Mariners agreed to share 10% of annual profits with the Public Facilities District once the $200 million in losses the Mariners owners incurred from June 1995-June 1999 were eliminated. We are now getting closer and closer to reaching the point when profit-sharing will be a reality.
6. The Chamber provides opportunities for businesses to work better, faster and cheaper. In your business, what are you doing as an organization (off the field) to be better, faster and cheaper?
Baseball, like any other industry, is technology dependent. The Mariners have scouts around the world looking for talent wherever they can find it. We have to be able to communicate with our scouts in South Africa, Taiwan or the Czech Republic as quickly and easily as we do with the scouts who are watching high school players in Nebraska or California. The game is also increasingly about the ability to process and interpret information, especially player statistics. We know that statistical analysis can’t replace good old-fashioned talent evaluation, but it certainly gives us tools that we can use to do a better job.
Technology is also changing the fan experience, from the tickets we buy to the access to information that will enrich the fan’s enjoyment of the game. The traditional paper ticket will be replaced by “smart tickets” that are basically barcodes on a smartphone that the purchaser can load with money to buy food or merchandise.
We are also taking advantage of operational savings at Safeco Field with recycling and energy conservation. Since 2006, we have saved over $1 million in natural gas, electricity, water and sewer charges. Beginning this year, we are investing about $3 million in energy-efficient capital projects that will save us an additional $250,000 each year. So far this season, our combined recycling and compostable rate is over 80%, which is tops in Major League Baseball, and maybe even in all sports. These efforts are saving us an estimated $100,000 in waste hauling fees.
The focus on sustainable operations is clearly the right thing to do, not only for the environment, but also to reduce business expenses.
7. What’s the strategy for the rest of the season?
Our goal remains the same: to build the Seattle Mariners into a championship-caliber team that can be a true contender year after year. General Manager Jack Zduriencik has been hard at work building the talent level throughout the organization. He’s doing it through scouting, player evaluation, player development, trades and free agent acquisitions.
Yes, we are all disappointed with the results this season. For a variety of reasons, several players have underperformed. But we have also had some players who have been pleasant surprises, like Jason Vargas, Doug Fister and Michael Saunders. At this point, we are focused on two things. First, we have challenged our team to continue to work even harder to improve its performance and play winning baseball the rest of the season. It is also possible that we could see some of our future at Safeco Field, with products from our farm system – like Dustin Ackley and Michael Pinedato name just two. We have also refocused our plans on the future. Every move we make from here on out has to help make the organization stronger for the long term. We will use the second half of the season as an opportunity to reach our goal of winning a World Series at Safeco Field.
