Comment on “A Business Analysis of Asian Baseball Leagues”

• Published date: 01 January 2016
• DOI: http://doi.org/10.1111/aepr.12122
• Author: Takanobu Nakajima
• Date: 01 January 2016

Comment on “A Business Analysis of Asian

Baseball Leagues”

Takanobu NAKAJIMA†

Keio University

JEL codes: Z20, L83

The purpose of Jang and Lee (2016) is to make a comparison of the baseball business

environment among American Major League Baseball (MLB), NipponProfessional Base-

ball League (NPB), and KBO (Korean Baseball Organization) and to derive some policy

implications for the future development of the Asian baseball business.

Table 1 provides a summary of the results of Jang and Lee’s comparison.

The fundamental difference between MLB and NPB/KBO is in the governance

system. This factor leads to a difference in their objectives:MLB t ries to maximizeprofits

as much as possible and share them among its member teams, whereas NPB/KBO attach

great importance to winning to maintain the parent company’s brand image.

Jang and Lee derive six policy implications. First, NPB and KBO should shift their

objectives from winning to profit maximization. Second, NPB and KBO should enhance

their “competitive balance” by introducing a salary cap, luxury tax, and draft system as

exists in MLB. Third, KBO should increase fan loyalty through international competi-

tions like WBC and the Olympic Games. Fourth, when considering the risk of players

moving to MLB, no excess apprehension is needed about the outflow of star playersfrom

NPB and KBO to MLB. Fifth, NPB and KBO teams should become business units that

are more independent of their parent companies. Sixth, it is beneficial to create an inter-

national competition within the Northeast Asian leagues.

Jang and Lee’s proposals for the future development of NPB/KBO are substantial and

worth listening to. However, considering the uniqueness of the Japanese baseball indus-

try, there are some obstacles to realizing Jangand Lee’s proposals in the following senses.

First, NPB puts priority on each team’s (and its parent company’s) optimization over

the success of the entire baseball business. The commissioner is a mere figurehead and

has no power to coordinate the team’s interests for overall optimization. Namiki (2013)

provides comprehensive explanations of the problems that NPB currently holds.

Second, NPB could expand fandom by utilizing the Internet, although the two

leading Central League teams (the Yomiuri Giants and Chunichi Dragons) are subsidiar-

ies of large newspaper companies that are cautious about the invasion of the Internet to

news business. In particular, the Giants, which has the longest history and is the most

influential team in NPB, is too conservative to change the current business model.

Third, a close relationship between a youth league and professional baseball organi-

zations is absolutely necessary for the development of the baseball business. In Japan,

†Correspondence: Takanobu Nakajima, Keio University, 2-15-45 Mita, Minato-ku, Tokyo 108-

8345, Japan. Email: nakajima@fbc.keio.ac.jp

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doi: 10.1111/aepr.12122 Asian Economic Policy Review (2016) 11, 113–114

© 2016 Japan Center for Economic Research 113