The CPBL was established in 1989 and started its first season on March 17, 1990, with Wei Chuan Foods Corp, Uni-President Enterprises Corp, Mercuries Corp and the Brother Hotel the first four big companies to operate professional baseball teams, namely the Wei Chuan Dragons, Uni-President Lions, Mercuries Tigers and Brother Elephants.
It was thus the first year of professional baseball in Taiwan. Following these first four teams, China Times Group, Jungo Construction, Sinon Corp and Koos Group started operating teams one after another, namely the China Times Eagles, the Jungo Bears, the Sinon Bulls and the Koos Group Whales.
Later, in the wake of scandals over illegal betting and game-fixing and a dispute over broadcasting rights, the Taiwan Major League (TML) was established in 1996 as a potential rival to the CPBL.
The TML held its inaugural games in February 1997, ushering in a new era of coexistence and competition between two leagues in Taiwan. Following changes in the market, the TML was merged into the CPBL in 2003. The changes in market conditions and the rise and fall of teams and their corporate sponsors over the past few decades give rise to the question of how the optimal number of Taiwan’s professional baseball teams can be decided.
For this, the changing scale of the four biggest professional sports leagues in North America need to be taken into consideration. Since 1960, the US’ Major League Baseball has expanded from 16 to 30 teams, the National Hockey League from six to 32, the National Basketball Association from eight to 30 and the National Football League from 13 to 32.
The total number of teams in the four major professional leagues increased from 43 in 1960 to 124 in 2007. This nearly threefold increase in less than 50 years reflects a growth in interest in professional sports in North America, but from a business perspective, it raises the questions of why the leagues decided upon these numbers and how the numbers grew.
Now consider the numbers of professional baseball teams in Taiwan, Japan and South Korea. The number of teams in Japan has remained almost constant at 12 since the Nippon Professional Baseball league was established in 1951.
The only changes took place in 1953, when the Taiyo Whales merged with the Shochiku Robins to become the Taiyo Shochiku Robins, which was renamed as the Yokohama DeNA BayStars in 2012, and the establishment of the Tohoku Rakuten Golden Eagles in 2005.
As for South Korea, the number of teams in the Korean Basketball Organization grew steadily from its establishment on Dec. 11, 1981, until the NC Dinos and KT Wiz joined in 2013 and 2015 respectively.
Since then, it has remained at its current size of 10 teams. Taiwan’s CPBL, for its part, expanded from four teams in 1990 to a peak of seven in 1997, but later shrank to four teams, due to the dwindling size of the professional baseball betting market. Although the number of teams in the CPBL later increased due to its merger with the TML, the combined league still failed to maintain steady growth.
Academic studies of sports economics have determined that because such leagues operate to maximize profits, each team is treated as a monopoly business on its home territory, so the issue of maximizing profits for a single team is considered in terms of monopoly pricing.
That is, assuming that all teams are the same, the league’s decision regarding the number of teams amounts to maximizing the profit of all teams combined. The league must therefore decide upon an optimal number of teams.
Factors that influence the optimal number include consumer income, the number of players (who need to be cultivated), the type of game schedule, league division ranking, whether the league is closed or open and the league’s mode of governance (either joint venture or single entity).
To answer the question of what is the most appropriate number of teams for the professional baseball business in Taiwan, it is necessary to use estimates based on theoretical models and quantitative techniques, along with the unprecedented spectator mode adopted during the COVID-19 pandemic, which has quietly changed the organization’s profit model.
According to estimates by Shih Hsin University’s Entertainment and Sports Economics Laboratory, the optimum number of teams would probably be one more team than the current number.
The CPBL should consider allowing companies to join the league, with due consideration for regional monopoly, to generate revenue by expanding the development of the professional sports business on the one hand, while increasing employment opportunities by hiring more outstanding athletes on the other.
Jane Wen-jhan is a professor in Shih Hsin University’s Department of Economics and chief secretary of the Taiwan Association of Input-Output Studies.
Translated by Julian Clegg
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