State of the Mariners: Q&A with team CEO Lincoln

SEATTLE — It was an odd week to yet another disappointing season for the Seattle Mariners. They finished the 2013 season with 91 losses — their fourth-consecutive losing campaign. And in the final days of the season, manager Eric Wedge decided not to return to the organization citing a difference of philosophy.

With total attendance under 2 million for the third straight year, and ranking second worst in the American League, the organization is far from its glory days of the late 1990s and early 2000s. On Tuesday, Mariners Chief Executive Officer Howard Lincoln sat down for one-on-one interviews from three news outlets: The News Tribune, the Seattle Times and MLB.com

Here’s an excerpt of his 44 minute interview with the News Tribune.

You’ve had a few days now to look back, what were your thoughts on the 2013 season?

This was the most disappointing and frustrating season I’ve ever endured without any question.

Worse than 2008?

Yeah, really. I don’t judge it just by wins and losses. And the reason I say that, at spring training our expectations were very high. And I think that was justified. You were there. This looked really good. I didn’t expect we were going to go the World Series, but I thought we were going to be very, very competitive. And things looked really good. I’m really disappointed and frustrated of what happened in the season, given the fact that these expectations on our part, on my part were so high.

Having said that, I feel good about some of the things that did happen during the season. I liked the young talent we brought up. If I go around the infield (Kyle) Seager, (Brad) Miller, (Nick) Franklin, (Justin) Smoak, (Mike) Zunino – I think that’s our future. As I look at the starting pitching, not only Felix (Hernandez), but (Hisashi) Iwakuma had a fabulous year. And we’ve got guys like (James) Paxton, Taijuan Walker and (Brandon) Maurer and (Erasmo) Ramirez – we’ve got a solid foundation there. So I think I’m very optimistic about the future. I think there were some good things. For one thing, I just realized today that we hit more home runs than other team in the league, except Baltimore. That’s unbelievable. I actually had to check that statistic.

So I was very disappointed, probably more disappointed than any season than I’ve gone through, but there were good things that happened. And I think our fans see that too. They see that young talent and we just have to be – patient is not a good word because our fans have been more than patient – but we certainly have to stay the course. We have to work with this young talent and develop it. So that’s where I am at.

Do you have faith in this plan, right now, the way it is?

Yeah, I do. When we hired Jack Zduriencik, we hired him primarily as a talent evaluator. He did not have any experience as a general manager, so he’s had to learn on the job. But as a talent evaluator, I think he’s done a superb job in the area of scouting, both professional and amateur scouting, there were a lot of changes there for the good. He’s done an excellent job in the amateur draft and the international draft and when I say that, you have to rate the first-round picks but the subsequent rounds. I think he’s done a really good job reorganizing and strengthening the player development side of this operation and that’s a huge, huge component. We have 250 baseball players that are employees, 25 of which are at the major league level. So that’s good.

I think he’s done a fair job, OK job, in the composition of the major-league roster. I think he’s made his share of mistakes, but no general manager bats a thousand. I think he learns from his mistakes, which is positive. I think you have to be fair when you recognize general managers are going to make mistakes. And even decisions that are not mistakes turn out to be bad because the player gets injured, or the players doesn’t perform up to expectations, based on history and what not. So overall, I continue to have confidence in Jack going forward. And that is the test of whether Jack will stay here?

With you regards to Jack and the one-year extension, if you have faith in the plan, why not three years? Why just one?

Contract extensions are a distraction. They are a distraction for the fans, for the media, for everyone. … At the end of the day, you can have a contract extension, and if you aren’t performing, we are going to let you go and we’ll eat that contract. I think focusing on these contract extensions and their terms misses the point. The point is “Do you have confidence in this employee? And if you do, then he remains an employee. If you don’t, he is not an employee, regardless of what his contract says.”

How frustrating was this last week with Eric Wedge deciding to leave and the perception of a manager quit on you?

I don’t think frustration is a good word. I think disappointment and surprise. Surprise because of what Eric told me when we met in my office in September. Disappointing because I full expected, as did Jack and Chuck, that we would fully be able to resolve these issues and retain Eric going forward. Eric’s moved on to greener pastures and that didn’t have to happen. But I do believe that the process we used was the correct process and Eric put the cart before the horse. We can’t have a contract extension until we have a talk about how things have gone. It’s a simple as that.

Where do you think this organization is at right now?

I think we’ve got really an outstanding front office. Let’s separate baseball out. All of the other parts of organization are running at full speed and doing a great job. Our front office employees are great. Our day of game staff provides a level of customer service at Safeco Field that beats any team in Major League Baseball. We get letters and emails from fans about their experience at Safeco Field. And uniformly, the customer service level is off the charts. So I’m very happy about that.

I’m very pleased with how we’ve gotten into this regional sports network. That’s going very well. The baseball side of the business, as I’ve said, is in I think good hands with Jack and I think he’s done a really good job in scouting and player development. I have confidence in him going forward in terms of setting up the major-league roster. Certainly, the young talent is coming up or is already up. I’m very confident about the organization going forward. I think it’s regarded in Major League Baseball as a really good organization. And I think if you were to ask Bud Selig, he would tell you that. So that’s how I feel.

The attendance for this season is up about 40,000 people, but this is the third year you have had less than 2 million fans. What are your thoughts of where you are at?

The attendance is a reflection of the losing seasons. I’m a fan as well as the Mariners CEO. I think of this the same way of other fans do — “Why can’t these guys start winning?” That’s reality. As you said, the attendance is up a little bit from 2012 to 2013 and our television ratings were actually higher this year than they were last year, but I’m cognizant as a fan of the frustrations of our fans out there and the need to get this going in a different direction. But I do have confidence that the program Jack is working on is going to work. It’s simply taking a lot more time than I ever thought when I sat down with Jack the day we hired him.

How do you sell this team to fans? If two fans were standing here right now and asked why should we spend our money to go see your product, what do you tell them?

First I’d tell them that when you get to Safeco Field you are going to have a safe, friendly environment. You are going to be sitting in a first-class ballpark. You are going to get great entertainment. It’s a great place to come whether it’s at the Pen or at Edgar’s or wherever. So there’s a lot of things going on at Safeco Field for the fans to enjoy besides watching Major League Baseball. And I would point that out to them many of our fans are thinking about things other than just what’s on the field, so we have to provide a really good entertainment experience across the board as well as getting that major league team to perform.

The second thing I’d tell them is that you are looking at talent that we have brought up. Young talent that we are going to control for many years. And we are going to grow this talent and you are going to watch it grow.

The third thing I’d tell them is you are having the opportunity to see an individual who is one of the best pitchers in baseball today, and is historically going to down as one of the great pitchers of all time in Felix Hernandez. And that our ownership group, by investing that 175 million dollars, made sure that great pitcher is here for the duration.

So I would tell them those things. And then I would tell them, as a fan, I feel their frustration. I feel how upset they are. I get it. I get it in spades. My neighbors are fans. I hear it from them. My fishing buddies are fans. I hear it from them. That’s all I heard on that trip to Alaska. “Why don’t you fix this? Why don’t you fix that?” It’s kind of a little joke because I think they actually support me. I do hear what the fans are saying and if they were sitting across from me, that’s what I’d say.

Do you ever worry that the fans might not come back? We’ve seen it in Cleveland. And while Cleveland is a different economic market, do you worry they won’t come back with winning?

I think we are in a different situation than in Cleveland. Over half of our fans come from outside of King County. And with that roof, this is a regional place to come. I think that when we starts seeing wins and winning seasons, yeah there could be some delay, but I don’t think it would be anything like Cleveland. I really don’t. I think our fans are really ready to jump back on board once we can get this young talent to start winning baseball games.

There’s a phrase that’s thrown around a lot — public trust — in terms of what a pro sports franchise is doing. Do you believe you have the public trust? Do you believe it’s been diminished at all?

Let’s go back to 1992 when the Mariners were about to head to Florida. This ownership group, which is the same ownership group, other than John Stanton coming in a little bit later and buying John McCaw’s interests and Mr. Yamauchi transferring his interest to Nintendo of America — it’s the same ownership group, if not for the fact that they stepped up, the Mariners would not be here and we would not be having this conversation. It’s the same ownership group going forward. There really haven’t been any changes. There’s a stable ownership group that is committed to keeping Major League Baseball here in the Pacific Northwest for the foreseeable future. That is entitled to a lot of credibility.

We are going to have situations where the team has losing seasons as well as winning seasons. But whether they are losing seasons or winning seasons, this ownership group is going to provide the stability to make sure Major League Baseball survives here and flourishes.

So I think that while fans are frustrated by losing and certainly while our credibility no doubt has suffered, I think if fans will step back and say, wait a second what did these people do, they kept it here so that we could enjoy Major League Baseball, our kids could enjoy Major League Baseball and our grandkids can enjoy Major League Baseball. And that’s entitled to a lot creditability, forgetting about the losses for just a moment.

It’s been brought up before, you famously told a reporter that you put yourself on “the hot seat” when things aren’t going right.

I actually didn’t do that. I went down on the field — and this was some years ago — and there was kind of a media scrum and I happened to say, something like “so and so is on the hot seat and I’m on the hot seat.” And then I thought to myself, “Should I have said that?” And I realized that I might have put my foot in it. If I had it to do over again, I might have come up with some different expression. Certainly do I perceive that I’m on the hot seat and Jack’s on the hot seat and Chuck’s on the hot seat, we are all on the hot seat. In hindsight, I wish I’d used a different expression because it’s come back to haunt me.

Using a cliche, the buck stops with you, you are the CEO. People are wondering in this run of losing and this negative perception, who do you answer to?

I answer to Nintendo of America — the majority owner, which is wholly owned by Nintendo Company Limited of Japan. If Mr. Yamauchi, Mr. Iwada or Mr. Kimashima didn’t have confidence in me, I wouldn’t be here. I answer to the board of directors of Seattle Baseball Inc., the managing general partner of baseball of Seattle LLP — limited partnership. If that board didn’t have confidence in me going forward, I wouldn’t be here. If any of our members of our ownership group, or a sizable a group of our owners, didn’t have confidence in me going forward, I wouldn’t be here. But right now, I retain that confidence.

The times we’ve talked, you’ve seemed very confident that you are the person to lead this organization back to where it once was. Why do you believe that you are the man to lead this group?

I’ve been very successful in everything that I’ve done in my life. I’ve enjoyed great success certainly at Nintendo and in the home video game business. And this has been a humbling experience for me. In the first two years that I was CEO, we went to the American League Championship and we’ve had other winning seasons. But these last few years have been a very humbling experience. And I know that my legacy is going to be determined is by how this team ultimately comes out under my leadership. And I am determined to get this thing turned around.

You and Chuck (Armstrong) have been the constant in most of this losing run, do you believe you are perceived fairly, or unfairly, by not just the media, but the fans and the local community?

Oh you know, when you have losing seasons, someone has to be the target. That’s the nature of the beast. I don’t think that it’s unfair or unjust. I recognize when you are in a position like this — any major-league CEO — where you have losing seasons is going to be rightfully the target. Somebody has to be the target. That just comes with the territory. If you don’t have a thick skin, you shouldn’t be doing this. But I think, in fairness, my record of service in this community is pretty well known. And I’m hopeful that fans, while they may be disappointed in how the team has performed, will understand that I have made huge commitments over many years to making our community a better place to live.

Does it bother you when people accuse this organization of simply trying to make money and not caring about wins?

None of our owners when we got into this back in ‘92, got into it with the idea that the objective was to make money. Certainly the value of the franchise has gone up. All Major League Baseball franchises’ value has gone up. When this group was assembled, the primary objective was to do whatever was necessary to keep Major League Baseball in Seattle for the foreseeable future and that’s why we pushed so hard for Safeco Field. And everything that we’ve done over the years has been with that objective in mind.

The second objective has been if we can make a little bit of money, that’s fine. But if we lose a little bit of money, that’s fine, too. We’re not in the business to make money. Some years we have losing seasons and we make money. Some years we have a winning season we may lose money. But the overriding objective is not to make money, it’s to have winning baseball teams. That’s what all of these owners want. These owners hear the same things I’m hearing from their neighbors, too: “What the heck is going on? Why can’t you get this thing going in the right direction?” So we are all cognizant of that. This idea that we are only interested in making money is pure nonsense.

As far as money, there was a time when you reduced payroll. You had a $100 million payroll in 2008 — that money wasn’t probably spent ideally. People wonder what the payroll is going to be. There is a fear amongst fans that payroll may go down, but where will it be?

We don’t know what the payroll will be for 2014. Jack is still working on his needs and we are at least a month away before we make that decision. Last year, our payroll was a little over $91 million which is not chump change. But as you said, we’ve had instances where were up to $110 million and we had a losing season. At that point, clearly we didn’t spend our money wisely. It is true that with all of this young talent, some of your major commitments are coming off the books so Jack will have a lot more flexibility. But I can’t tell you what that payroll is yet, and I can’t tell you where it’s going to end up because I haven’t heard from Jack.

Not many people understand how adding your own regional sports network will benefit your payroll exactly. There is the thought that money is going to be flowing in. How much will it help your payroll?

Over the period of the rights fee we get from Root Sports, which goes from now to 2030, over that period, that money, plus the cash flow we receive in Root Sports over the lifetime from now till 2030, it will be comparable to the cash flow and the rights fees that the Angels and Rangers get, even though they are in larger television markets. So we’ve negotiated a very good deal. But the money isn’t going to fall out of the sky in 2014.