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THE HOT CORNER: As business, NPB slowly goes pro

by Jim Allen / Daily Yomiuri Sportswriter (Jan 31, 2008)

Professional baseball came to Japan in the early 1920s, and the current 12-team system's predecessor, the Japan League, was formed in 1936. Yet while Japan's game has developed on the field, the business side has been hard-pressed to keep pace.

But there is evidence that the business side of Japanese pro baseball is looking less and less like an amateur effort.

Things used to be sweet when flush parent companies were happy to write off baseball losses on their advertising budgets, while low player salaries and strong demand kept those losses at a manageable level. That all changed with the collapse of the bubble economy in 1991 and the introduction of free agency soon after in 1993.

In the late 1980s and early 1990s, one had to fight to get tickets for April weekend games between Pacific League powerhouses. But lower TV ratings and fewer terrestrial broadcasts indicate the demand just isn't what it was, despite the fact that Japan still loves its baseball and the quality of play is higher than ever.

While it is easy to see the current gap in business acumen between Nippon Professional Baseball and its North American cousin Major League Baseball, the majors went through their own age of uncertainty for 18 years following the forced introduction of free agency in 1976.

Major league owners believed the introduction of free agency would destroy their business. Instead, it destroyed their antiquated way of doing business. Free agency eliminated the cheap labor that allowed their industry to prosper with minimal marketing. As soon as players had some right to work where they chose, labor costs not only rose but soared. Teams had to scrounge for new revenue streams and learn--in the most painful way--how to share it with their new partners, the players.

Although one of the most profitable avenues has become the systematic looting of state and local tax money in stadium-construction scams--err, schemes--MLB and its teams have also learned to aggressively market their product.

While Japan's teams have not mastered the art of profiteering from stadiums--this is baseball not the construction industry--they are learning a thing or two about marketing.

"I think the thing they've most improved with is the focus they're putting on the consumers," said MLB Japan Director Jim Small. "They are about where we were in the States 14 or 15 years ago."

He cited the improved treatment fans have received at the parks as part of the change. Yomiuri Giants season-ticket holders get chances to go on the field before and especially after games--when they can shake hands with that day's Giants heroes.

Such things add value to a team's brand and get fans coming back to the park, and all the teams are catching on to this.

The other side of the equation is turning around and marketing your brand in unconventional ways. This is a large part of what Small and his team do, and it's an area where Japan is still playing catchup.

He estimates that 70 to 80 percent of his office's staff hours are spent finding ways to make MLB's brand a profit generator for partner companies. Small's success is measured by whether or not companies write checks to renew sponsorship deals for another year.

Their newest sponsor is computer storage and infrastructure giant EMC.

"It may be cliche, but we are now in the business of selling computer storage," Small said. "With JAL we are in the business of selling seats on their flights."

In return for helping each partner sell its own product, Small's team is bringing in cash as well as increasing MLB's visibility through increased promotions. Although Japanese baseball business used to seem like an oxymoron, Small said teams are beginning to get it.

"The Hawks, Marines, Eagles and Fighters have some very switched-on people that understand the value of their brand," Small said.

"You go to the Giants games. They're making it fun. You do more to remove the distance between the fans and the players. There's lots of things you can do.

"That's why I'm optimistic."


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