Professional Baseball Drawing 10 Million Spectators... 100 Billion Won in Broadcast Rights Home Run [Win-Win Game②]

Money is pouring into popular domestic sports associations. The golf association's net profit, which used to be around 2 to 4 billion KRW, surged to 24.1 billion KRW last year, a tenfold increase. The Korea Baseball Organization (KBO) secured about 100 billion KRW in broadcasting rights fees this year. In 2015, when the KBO League was established with the current 10-team structure, the broadcasting rights fees were 44.3 billion KRW. The era when professional baseball teams operated at a loss and were sustained by their corporate owners ends this year. It is highly likely that all teams will turn a profit this year. The entities pouring money into the sport are domestic OTT (Over The Top) companies. Popular sports were chosen as a strategy to compete with global giants like Netflix.

This year, Korean professional baseball has effectively entered the era of 100 billion KRW in broadcasting rights fees. The Korea Baseball Organization (KBO) signed broadcasting rights contracts worth 99 billion KRW this year. Compared to 2002, when KBO launched its subsidiary KBOP to handle marketing and broadcasting rights negotiations, the difference is striking. That year, KBO's exclusive broadcasting rights contract with KBS was 7.7 billion KRW. The current broadcasting rights fees have more than doubled compared to 44.3 billion KRW in 2015, when the KBO League was established with the current 10-team structure.

KBO distributes about 90% of the broadcasting rights fees, excluding various expenses and a portion allocated to the baseball development fund, equally among the 10 teams. A KBO official stated that each team will receive about 9 billion KRW this year. Looking at the audit reports submitted by the 10 professional baseball teams, seven out of ten teams posted profits last year, nearly doubling from four in 2022. With the significant increase in broadcasting rights fees this year, team finances are expected to improve further. This year's broadcasting rights fees increased by 23 billion KRW compared to last year.

[Photo by Yonhap News]

In February, KBO extended its broadcasting rights contract with the three terrestrial broadcasters (KBS, MBC, SBS) for three years at a total of 162 billion KRW, averaging 54 billion KRW annually. Then in April, KBO signed an exclusive wired and wireless broadcasting contract with CJ ENM, which owns the online video service (OTT) platform TVING, for three years totaling 135 billion KRW (45 billion KRW annually). Until last year, KBO had a wired and wireless broadcasting contract with a consortium of telecom and portal companies (Naver, Kakao, KT, LG Uplus, SK Broadband) worth 110 billion KRW over five years, averaging 22 billion KRW annually. This means wired and wireless broadcasting rights fees increased by 23 billion KRW. Consequently, more than 2 billion KRW in broadcasting rights fees will be additionally distributed to each of the 10 teams this year.

Among the three teams that posted operating losses last year, two had losses under 2 billion KRW. In other words, if other business performances remain the same as last year, thanks to the increased wired and wireless broadcasting rights fees, all teams except one are expected to record profits this year.

The team with the largest loss last year was KT Sports, which operates the KT Wiz. It posted a loss of 10.93214 billion KRW. However, since KT Sports operates five teams across professional baseball, professional basketball, esports, shooting, and hockey, the loss attributed solely to KT Wiz is smaller. Industry insiders believe KT Wiz is also likely to turn a profit this year. In other words, it is highly likely that all professional baseball teams will post profits for the first time this year.

Moreover, this year, professional baseball is expected to attract a record-breaking number of spectators, surpassing 10 million for the first time in history. Already, over 9 million fans have visited baseball stadiums this year. Officials expect attendance to approach 11 million, far exceeding the previous record of 8,406,688 spectators set in 2017.

If the current trend continues, attendance this year will increase by about 25% compared to last year (8,100,326). This implies a corresponding increase in ticket revenue. Last year, the LG Twins, which attracted the highest attendance (1,202,637), earned 15.75883 billion KRW in ticket revenue, while the NC Dinos, which had the lowest attendance (557,607), earned 9.23078 billion KRW.

With the 100 billion KRW broadcasting rights fees and the anticipation of surpassing 10 million spectators for the first time, professional baseball teams are excited this year. Of course, accounting profits do not necessarily mean actual operational profits. Except for the Kiwoom Heroes, domestic professional baseball teams have parent companies, and these teams heavily rely on support from their parent companies, which is often accounted for as advertising expenses. A team official said, "With support from the parent company, the accounting books usually break even. While it is true that revenue from baseball operations has increased significantly, it is still not easy to achieve a true profit."