Ownership - an analysis

This started off as a comment but got so long I thought it better as a fanpost. I’d like to start off by saying that I don’t share much of the angst about the team that has been expressed here over the last week; being a long time season ticket holder, I feel so much better about this team than most of our past teams, and I am not attracted by these long term deals that could potentially cripple us, albeit in the future when I still plan to be a season ticket holder. That said, where it makes sense, I want the team to spend money.

I have been trying to reconcile John Stanton’s past words with his current actions, and so I did a bit of research. This is just some quick google searches nothing in depth but I’m probably better at this type of thing than pure Sabermetrics so I thought I’d share.

Being a season ticket holder, (at times a "Premium" season ticket holder) I have been in rooms multiple times where John Stanton has spoken, and when he bought the team he emphasized that he hated losing as much or more than any of us, and that he would do "whatever it takes" to take Seattle to the World Series. The "whatever it takes" was repeated, and obviously somewhat hyperbolic, but even through the "step back" I had no reason to doubt his intentions.

Now however, Jerry appears to have a strict, not whatever-it-takes budget according to reports. So, what’s changed? The obvious place to look was to see how Stanton’s finances are doing.

John Stanton made his money in wireless, and it appears that most of his investments are in that space, his main holdings appear to be a company called Trilogy International Partners (listed via SPAC on the Toronto Exchange in 2017), a venture firm called Trilogy Equity Partners, and the Seattle Mariners.

I have no idea what his current net worth is, but changes in values of his investments will obviously affect it. Let’s look at the value of Trilogy International Partners (TIP) since his Mariners purchase. Some caveats, I haven’t found what percentage of the company he owns over time so how this directly affects him I’m not sure. News reports of TIP’s listing in 2017 mention its valuation at $875 million. This also approximately lines up with shares outstanding and share price at the time. I believe this is CAD so in USD it would be around $675 million. At the time of listing the price of the stock was about CAD $10. Currently the price of the stock is CAD $.23. This is after 4 cents in dividends in years past and a special dividend of CAD $1.69 This means that one share that used to be worth $10 is now effectively $1.96 – An implied overall value of CAD $171 million or USD $128 million, a decline of around 80%.

Next, Trilogy Equity Partners is a private venture capital firm. Looking at its list of investments, it is active in the high tech / wireless space. All of these types of venture firms are idiosyncratic based on their current portfolios and successful exits, however it’s probably safe to say that the value of the firm has risen since Stanton’s acquisition of the M’s. What can also probably can be said is that the value has declined significantly since the start of this year, with the cost of money increasing rapidly, and investor risk appetite declining. Even if things were going swimmingly, venture capital is notoriously illiquid, meaning that it is not easy to take money out to use it for something else (like a Correa)

The third company is the Seattle Mariners. I’m sure the value of the franchise has risen. But keeping payroll lower if you can still win is obviously the best outcome for an owner. We fans want owners to pony up other money to inject into our favorite teams.

So, what can we conclude from this: John Stanton is probably not more flush with money than he was when he bought the M’s. He’s also probably feeling significantly more squeezed than he was last offseason due to the decline of venture capital. He was already towards the bottom of MLB owner net worth, and the M’s at this point may be the biggest part of his portfolio. Unlike some owners, paying someone some fraction of a billion dollars even over time may be a significant event to him. Don’t get me wrong I don’t think we need to be passing a collection plate for him, but looking at this Trilogy of companies, when Stanton reaches deep into his pockets there may only be lint rather than a ring.