Korean Baseball Faces Increasing Expenses, Falling Revenues

The Korean Professional Baseball League is undergoing a renaissance by attracting more than three million spectators for the first time in six years. The deep-rooted structural problems of Korean baseball since its launch in 1982 remain unsolved, however. In particular, the management of baseball teams is getting worse.

The richest baseball team in Korea is the Samsung Lions, which is often compared to the New York Yankees in Major League Baseball in the U.S. in many ways. Last winter, when the team brought in Shim Jeong-su and Park Jin-man, the most popular free agent players, the rich team was even called the “Samsung Yankees.”

A comparison of the two richest teams in Korea and the U.S. clearly reveals the weaknesses of Korea’s professional baseball.

According to statistics submitted on September 21 by the Ministry of Culture and Tourism to the National Assembly’s Culture and Tourism Committee for inspection, Samsung’s expenditures in 2004 stood at as much as 40.7 billion Korean won, most of which was spent managing the team. While Samsung saw its average attendance rise 54 percent from a year earlier, revenues from admission fees were only 1.2 billion won.

The total revenues of the team last year stood at only 15.2 billion won, so the team covered the deficit with financial assistance from the Samsung Group. Other baseball teams have the same story.

In contrast, the Yankees sold more than four million tickets this year alone. Last year, 3,775,292 spectators watched a game at the stadium, so the team raked in 143 million dollars (about 143 billion won) in revenues from admission fees alone.

The Yankees spent 197 million dollars (about 197 billion won) on annual salaries for players, yet at the same time it earned about 50 billion won for the rights to broadcast games and 264 million dollars (about 264 billion won) from a variety of events on top of the revenues from admission fees. Forbes, a business magazine, estimates the value of the New York Yankees at 950 million dollars (about 950 billion won).

Korean Baseball, which was not born out of demand from the market, has no choice but to depend solely on assistance from mother companies that own baseball teams.

Despite a deficit of more than 10 billion won, companies have invested a huge sum of money for any publicity effect. Yet, the poor performance or disgraceful scandals of players have had a bad impact on corporate images. Unless Korean professional baseball becomes self-supporting, its existence will be like “shoveling sand against the tide” just to get by.

A marketing official advised, “Each team, for its part, should work harder to reduce their deficits by holding various events. Still, players are lacking a sense of crisis, and they should also make more efforts to continue to be loved by fans.”

uni@donga.com