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03/13/12 1:29 PM ET

Mariners report $7.3 million loss in 2011

Club attributes deficit to capital improvements at Safeco Field

PEORIA, Ariz. -- For just the second time since Safeco Field opened, the Mariners reported a financial loss for a fiscal year with a $7.3 million deficit for 2011.

The figure was released in the team's annual report to the Washington State Major League Baseball Public Facilities District board, which owns and oversees the stadium for the state.

Rebecca Hale, the Mariners' director of public information, said the loss was expected, given the club's decline in attendance along with a $9 million capital investment in renovations to the Bullpen Market area and new LED scoreboards on the club-level façade.

"You're never happy about having an operating loss, but in our case, based on projections, we're not surprised by this," Hale said.

The only other reported operating loss since Safeco Field opened in mid-1999 was a $4.5 million deficit in 2008. However, that year the "special calculation formula" used by the PFD to determine how soon the club will begin sharing profits from the stadium actually came out as a $1.9 million profit.

This past year, both the generally accepted accounting principles (GAAP) formula and the "special calculation" agreed upon by the club and PFD for profit-sharing purposes resulted in about the same figures. The GAAP calculation showed a $7,344,000 loss, while the "special calculation" came to a $7,356,000 loss.

Because of the profit-sharing provision in the team's 20-year lease with the PFD, the Mariners are required to provide an annual report of the team's financial performance. If the club reaches $200 million in profits before the lease expires in 2018, the team will share 10 percent of its annual profits with the PFD.

Using the special calculation agreed upon in the lease, the team had lowered the remaining balance on profit to $38 million last year, but that figure now grows back to $45 million. The original $200 million is the amount of money lost by the current ownership group from the time it purchased the franchise in 1995 until Safeco Field opened.

Since the current ownership group bought the franchise in 1992, there has never been a distribution to ownership in any year, even when there has been a profit.

The "special calculation" was reached by taking the GAAP net loss of $7,344,000, adding depreciation/amortization of $23,915,000, subtracting player signing bonuses of $14,369,000, subtracting non-ballpark capital expenditures of $495,000 and ballpark capital expenditures of $9,063,000.

That yields the special calculation of negative $7,356,000 for the fiscal year ending Oct. 31.

The Mariners' attendance last season was 1,898,936, an average of 23,419 per game, which is the lowest figure since the Safeco opened, while the team's player payroll increased slightly to just less than $100 million.

Greg Johns is a reporter for MLB.com. Follow him on Twitter @GregJohnsMLB as well as his Mariners Musings blog. This story was not subject to the approval of Major League Baseball or its clubs.