Mon, Oct 28, 2013 - Page 8 News List

Take teams public to make CPBL sustainable

By Huang Chin-yin 黃欽印

On Oct. 19, the Brother Hotel announced that it intended to sell the Brother Elephants, its Chinese Professional Baseball League (CPBL) team.

This shocking news exposed the difficulties of operating a professional baseball team in Taiwan and signalled that the nation’s gradually reviving baseball league now faces an uncertain future. This uncertainty is harmful not only to the sport’s fans and players, but also to the owners of the teams.

If one analyzes the structure of the nation’s professional baseball operations, one would have to admit that the local market is relatively small compared with that of other countries with professional baseball leagues.

This creates a situation in which, although the revenue generated by local teams is somewhat limited, team owners still have to take international standards into consideration when setting salaries for their players.

The fundamental pressure on professional teams lies in the universally low revenues they bring in and the high operating costs.

As a result, the problem of how to maintain sustainable operations has always been in the background for team owners.

Observations made of the CPBL over the years make it clear that game-fixing is another serious problem that hurts the sport’s development. For baseball fans, this long-term problem may not fade away any time soon.

To strengthen the development of the CPBL and help every team become sustainable, the four teams in the league should be encouraged to go public.

In the next few years, the government could provide the teams with capital. Then, after actuaries assess their assets, the teams could go public. Baseball fans, local governments and domestic and foreign investors could use the teams as investment vehicles. The teams’ worth would then be reflected by the value of their stock based on their lineups and costs.

Taking this approach, each team could be operated as an independent company. Such independently managed companies would not have too much interaction with the major shareholder companies in the background, which would mean that the teams are unlikely to become a burden to the main shareholder firms, and vice versa.

If the companies manage the teams poorly, shareholders could demand a company reconstruction and the major shareholding firms could sell their shares to whoever wants to take over the team. A baseball team run in this manner would be able to become sustainable.

Under this scheme, apart from buying tickets to games, fans would also be able to buy shares to support the sustainable development of their favorite team.

As for local governments, if they want to have their own baseball team and profit from it, they could choose to become major shareholders with the ability to participate in the team operations.

Owners could also develop more affiliations, such as connecting the teams to the tourism and education sectors, instead of always depending on the financial support of advertisers or mother companies.

In addition, the income generated by ticket sales and affiliated businesses would increase, thereby strengthening the sustainable development of Taiwan’s professional baseball league.

Huang Chin-yin is a professor in the Department of Industrial Engineering and Enterprise Information at Tunghai University.

Translated by Eddy Chang

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