The Sports Business in The Pacific Rim

This chapter considers the creation and growth of professional sport leagues throughout East Asia. In this, the different leagues and sport are examined, and noted for their hybrid use of both North American and European methods of business and regulation of sport leagues. Notably, prominent Japanese, Chinese, South Korean, and Taiwanese sport organizations are covered in their emergence as the top sport businesses within the region. The creation of these leagues varies from the old (Japanese baseball) to the new (Chinese football). As the dynamics of political and economic power has shifted in East Asia in the last several decades, so has the popularity and importance of many of the sport leagues in the region. At the same time, as these leagues have grown, many of the top stars have begun to leave for more popular and competitive leagues in North America and Europe. This chapter concludes in considering the future potential of sport leagues in Asia, and whether the teams and leagues will be able to continue to survive in their current formats.

This chapter examines the impact of the 2002 World Cup held in Japan and Korea on the domestic soccer league of Japan, the J. League. We first consider the impact of World Cups on league attendance in some European countries and then compare with the Japanese case. We find that demand increased substantially in the years just before and after the World Cup. These effects seem to be associated with new stadiums built for the event.

This chapter investigates the Korean Basketball League (KBL). We first review the history of the KBL, and compare its features with those of its predecessor amateur league as well as those of the US professional league National Basketball Association (NBA). In particular, we examine comprehensively the effect of employing foreign players on the business of the KBL. The introduction of foreign players improved not only the absolute athletic level but also the competitive balance of the league. In fact, we found that more stringent regulation of the participation rate of foreign players in individual games resulted in reduced competitive balance for the league. Moreover, fans reacted negatively and immediately to deteriorating competitive balance across the KBL. Fans’ potential preferences for player nationalities were not statistically confirmed.

This chapter reviews the evolution of the sports broadcast market in Korea. It explores the sports broadcast market from the perspectives of the supply- and the demand-sides, estimates the size of sports broadcast market, and examines the mechanisms adopted in the transactions of sports broadcast rights. It shows that the Korean sports broadcasting market has followed a similar trajectory of the international sports broadcasting market in that a relatively small number of sports contents have obtained dominant position, and the competition among the broadcast channels has rapidly increased. This chapter also presents several features of the sports broadcast market that are very unique in the Korean context; these include how the listed-event rule was enacted and how the conception of televising international sports events has changed.

This chapter investigates the effects of customer discrimination and outcome uncertainty on Taiwanese television viewers by using World Baseball Classic (WBC) match data. The micro data of TV ratings per minute provide comprehensive insights into the behavior of viewers. After controlling for players’ performance on the field and the contemporaneous errors associated with the dependent variables, the results show that TV ratings were higher when Taiwanese and Asian players played. Taiwanese TV viewers exhibited customer discrimination favoring Taiwanese and Asian players but against players of other nationality; the largest effect of Taiwanese customer discrimination of this variety was against South Africa. Moreover, total points scored are significantly positively related to TV ratings in the analysis. Coefficients of pitch-by-pitch uncertainty close to the end of a game are positively related to TV ratings. The evidence supports the hypothesis of outcome uncertainty.

We provide a brief economic characterization of the professional domestic league currently known as the Chinese Basketball Association (CBA). Our focus is on tracking competitive balance, interesting in other leagues worldwide, for insight into interesting institutional change. Game uncertainty, playoff uncertainty, and consecutive season uncertainty all pose the same type of challenge as in other leagues worldwide. In addition, an experiment with promotion and relegation offers insight into current research and policy questions worldwide.

There exists diverse research examining the attendance at professional sporting events from a North American and European perspective (Watanabe, Int J Sport Finance 7:309–323, 2012). However, there are a limited number of studies that have considered attendance for sporting leagues and events in Asia, with most of these studies focused on the Nippon Professional Baseball League (Leeds and Sakata, J Sports Econ 13:34–52, 2012; Yamamura and Shin, J Socio-Econ 37:1412–1426, 2008; Appl Econ 41:3257–3265, 2009). This research examines attendance for professional soccer in the Chinese Super League (CSL) over an entire season. Analysis of this league is of great interest because of the unique pricing structures employed by various franchises that belong to the CSL. Specifically, several CSL franchises employ only a single price point for a ticket to their match, while major professional sport leagues in North America and Europe offer multiple prices at which to enter matches. The practice of price dispersion, the selling of tickets to a single event at different price levels, in the CSL provides researchers with the chance to examine how teams employing different pricing practices in a league may affect attendance. Price dispersion theory indicates that the use of multiple prices for a product should allow a firm to capture more consumer surplus, and previous empirical examinations have found evidence of increased demand or revenues for organizations using price dispersion (Humphreys and Soebbing, Econ Lett 114:304–307, 2012; Huntington, J Cult Econ 17:71–87, 1993). This chapter will thus test whether price dispersion has a positive relationship with attendance in the CSL.

Many firms advertise by sponsoring sports activities. Team names, however, remain off-limits in the major North American sports. While teams serve owners’ outside interests, they are not a part of that outside interest. In contrast, most Nippon Professional Baseball (NPB) teams are subsidiaries of larger corporations that treat them as a form of advertising. We study whether owning a sports team is a profitable investment for a Japanese corporation by evaluating the impact of the purchase and sale of NPB teams on the profits of their parent companies. To do so, we perform an event analysis using stock-market data for the five NPB teams that changed hands after the 2004 season. Our findings show that the purchase or sale of an NPB franchise has little long-run effect on the profits of the parent companies.

We provide an overview of the economic and business evolution of professional baseball in Korea. We map out the state of Korean Baseball Organization (KBO) revenues, costs, profits, team values, and regulations in the player market, and the state of competitive balance compared to Major League Baseball (MLB). After that, we go ahead and speculate on the major issues facing KBO if it were to choose to move Korean baseball toward a different business model, profits rather than advertising subsidiaries.

The Australian National Basketball League (NBL) first tipped off in 1979, as the product of far-sighted club officials and Basketball Australia (national governing body) administrators who desired national club competition in a sport that was to boom as part of a global social trend. By the early 1990s, basketball was Australia’s fourth most popular spectator sport behind Australian football, rugby league and cricket. Yet the NBL was struggling soon thereafter and today it rarely rises above the level of niche spectator sport, in spite of high grassroots basketball participation and strong national teams. We review the evolution of NBL governance, especially the creation of a league competition organiser controlled by the NBL clubs and Basketball Australia in 1989; the merger of that entity, NBL Management Limited, and Basketball Australia in 2009, followed by the subsequent 2013 ‘de-merger’ and formation of a new competition organiser, NBL Pty Ltd, owned by the NBL clubs and private investors. Along the way, the NBL has experienced regular cycles of expansion and contraction. More than 30 clubs came and went in 35 seasons. The current eight-club competition includes a challenging mix of large- and very small-market clubs, private owners and public ­membership-based entities. Continual financial instability and power struggles between Basketball Australia and the NBL club owners/managers have resulted in a failure to devise a governance model that was a long-term, stable, efficient and profitable agreement between either the NBL clubs themselves, or between the NBL competition organiser and Basketball Australia.

This chapter discusses how generic governance models may influence sporting organisations in Australia to improve their prospects for utility and sustainability. It draws on a research study that focused on the sports of bowls, hockey and swimming which examined how governance, and management structures and practices affected a sport’s capacities in revenue generation and sustainability. (The Project Team comprised the authors and Dr. Robert Kidston (Senior Consultant, Governance and Management Improvement, Innovation and Best Practice Program, Australian Sports Commission), Mr. Rob Clement (General Manager, Innovation and Best Practice, Australian Sports Commission), Mr. Stephen Fox (Senior Consultant, Australian Sports Commission). The Project Team acknowledges with gratitude research assistance, literature review, interviews with participants and a report entitled, The Influence of Governance and Management on the Capacity for Revenue Raising by Sporting Organisations, Preliminary Report, unpublished (copy on file with authors), conducted and/or provided by Mr. J A (Jim) Ferguson (Consultant, former Executive Director of the Australian Sports Commission)). The results of the study are considered within the context of two broad questions on sport governance:

The conclusion is that the answer is no to question 1, although sport does have particular special characteristics (some of which may apply to other sectors), and a qualified yes to question 2. This chapter considers the extent to which three generic governance models: traditional model (TM), policy governance model (PGM) and executive led model (ELM) apply to each of the three sports.

This chapter analyzes whether players’ educational background affect their salary, performance, and second career using Japanese professional baseball player. First, the results obtained from an estimation of a Mincer-type annual salary function showed that the coefficients of educational background and school record are significant and positive, even when other factors were controlled. Second, the results of our probit or OLS (ordinary least squares) show that players who graduate or drop out of the university have higher probability of success as player than high school graduates after controlling for their ability. Last, it is found that players who graduate or drop out of the university tend to be coaches of professional baseball team after retiring.

In match-play sports, the best players seem to be both versatile and unpredictable in their use of techniques during play. Our analysis extends empirical work on player versatility and unpredictability to the Japanese sport of sumo wrestling. While earlier studies of tennis serves and football penalty kicks were motivated by game-theoretic analysis of choices made by players to start a match, our study is motivated by labor market theories that tie the success of workers to their portfolio of skills and its application to particular situations. We analyze panel data on tournament records of top sumo wrestlers participating in Japan’s grand sumo tournaments over the 1995–2004 time period to test whether players with better physical attributes and a balanced, unpredictable portfolio of winning techniques are more likely to win matches. Our econometric results show that better physical attributes, a diverse portfolio of techniques to finish a match, and unpredictable use of techniques are all associated with more wins per tournament.

Our research examines the causal relationship between children’s experiences in sports and their subsequent outcomes later on in life. Using the sample of Japanese twins that the authors collected through web-monitoring survey, we will look at the difference in children’s sports experiences at school between twin pairs. Our main research task is to examine, after controlling for the innate ability and family environments where the children were growing up, whether sports can help your life better.

This chapter provides an examination of the income, employment status and employment conditions of jockeys and offers a number of policy recommendations to overcome various problems they experience. Jockeys receive average incomes lower than the Australian full-time workforce and those of other leading Australian sports, and receive a low percentage of the income they generate. They have been employed as independent contractors. An examination of their employment reveals they should be regarded as employees and would receive the same entitlements available to the workforce as a whole, under Australian law. Their working life is dominated by the constant use of “wasting” to reduce and maintain their weight that has detrimental physical and psychological effects.

This chapter employs Arthur M. Ross’s notion of ‘orbits of coercive comparison’ to explain recent developments in collective bargaining in Australian professional team sports. It focuses on how the Rugby League Players’ Association based its negotiations for an agreement with the National Rugby League on an earlier agreement negotiated in the Australian Football League. The chapter provides basic information on broader developments within both codes, accounts of the negotiation and major features of both agreements and post collective bargaining developments in the respective sports.

The Japanese Professional Football League (JPFL) was established in 1993 in an attempt to enhance social interaction within teams’ home cities through football. In contrast, the Japan Professional Baseball League (JPBL) was created prior to World War II and has been supported mainly by corporate sponsorship. Using individual-level data from 1996, this paper contains over 250,000 observations to investigate how the JPFL enhanced social capital formation in comparison with the JPBL. A bivariate probit estimation showed that in those areas in which a JPFL team home city was located, people were more likely to play football with their neighbors. In contrast, the presence of a JPBL team did not lead people to play baseball with their neighbors.