SEATTLE -- This city of fog and ferryboats may soon lose its Major League Baseball team, and some angry fans are blaming Security Pacific Corp.'s Washington bank.
The Security Pacific unit has demanded that Jeffrey Smulyan, the financially troubled owner of the Seattle Mariners, sell the team if he cannot repay a $39.5 million loan by February. Mr. Smulyan used most of the loan to acquire the Mariners two years ago.
Florida Sharks Circle the Team
Given Mr. Smulyan's precarious financial condition, Mariners fans are concerned that he won't raise the financing to repay. A group in St. Petersburg, Fla., has already declared its eagerness to buy the money-losing American League team.
"Security Pacific could be seen as the bank that drop-kicks the Mariners out of Seattle," said Jay Tejera, Seattle-based bank analyst at Dain Bosworth Inc.
For Security Pacific Bank Washington, already in turmoil from deep staff cutbacks and BankAmerica Corp.'s pending acquisition of its parent, the disclosure of the confidential loan agreement has been a public relations disaster.
Rival bankers claim that dozens, perhaps hundreds, of irate customers have left Security Pacific because of the Mariners furor. It hasn't helped matters that Security Pacific's image in Washington has been that of an outsider controlled by its Los Angeles-based parent company.
Also damaging to Security Pacific was the leak of customer financial secrets. "It's a banker's nightmare that confidential documents get out," said a Settle bank executive.
A spokesman for Security Pacific declined to comment on the Mariners affair, which was first reported in the Seattle Times.
A Defensive Play
But in a full-page advertisement that ran in the Seattle newspapers several weeks ago, Security Pacific published an open letter stressing its $500,000 corporate sponsorship of the Mariners and noting its purchase of 150 season tickets.
The letter pointedly distinguished between "community efforts to support the Mariners and our obligation to our customers and shareholders. Security Pacific has a fiduciary responsibility to maintain prudent lending practices."
Several of Security Pacific's Washington competitors say they privately sympathize with the company's plight. And so far, they have resisted public pressure that they pick up the Smulyan credit out of civic pride.
Tacoma, Wash.-based Puget Sound Bank, the largest independent commercial bank in the state, has received petitions from Security Pacific customers promising to move their accounts if it picks up the loan.
A Radio Rumor
Gordon Piercy, Puget Sound's marketing director, said that, after a local radio station broadcast a rumor that the bank would bail out the Mariners, the bank logged more than 100 telephone calls of support.
Mariners fans have directed much of their rage at Mr. Smulyan.
An Indiana businessman whose debt-ridden radio empire has run into trouble, Mr. Smulyan promised he would keep the Mariners in Seattle after acquiring the team two years ago.
Security PAcific originally loaned Mr. Smulyan $35 million to acquire the Mariners. The bank lent an additional $4.5 million in July to cover the team's operating losses but insisted that Mr. Smulyan refinance the loans, or sell the team, by February. Mr. Smulyan could not be reached for comment.
A perennial cellar-dweller in the American League's western division, the Mariners have slowly wormed their way into the city's heart. This year, the team may post a winning record for the first time in franchise history. The Mariners are led by a talented pitching staff and one of the league's emerging superstars, center fielder Ken Griffey Jr.
Mr. Smulyan has said he will keep the team in town if he can raise $16 million. The team will probably get a better television contract next year, and local business interests are stepping up their support by buying more season tickets.
In any case, Security Pacific Bank Washington will not have to deal with the inevitable uproar if Mr. Smulyan is forced to sell the team. The problem will almost certainly end up in BankAmerica's lap.
Post-Merger Dilemma?
Security Pacific Bank Washington is to be merged into BankAmerica's Seafirst unit next year. Seafirst is already involved in a behind-the-scenes effort to refinance Mr. Smulyan's loans.
Said Seafirst chief executive Luke S. Helms: "We would like to help."
