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Comment on “Professional Asian Football Leagues and the Global Market”

2016; Wiley; Volume: 11; Issue: 1 Linguagem: Inglês

10.1111/aepr.12114

1832-8105

Jae Nahm,

Sport and Mega-Event Impacts

Szymanski (2016) provides a good summary of the development of the professional soccer industry. Most soccer leagues are developed at the national level. There are multiple leagues within a country, and these multiple leagues constitute a hierarchy of leagues, so that teams can move up and down the hierarchy of these leagues based on their performances (promotion and relegation). In terms of organization, it is very different from baseball leagues in the USA, which take the closed form of leagues. In soccer, the top teams in the top league take a large share of revenues, and when teams are relegated to a lower tier league they lose much of their revenue. In most of the European leagues, a few teams are dominant in performance. As a result, the majority of teams are experiencing economic difficulties. These characteristics of soccer leagues result from the competitiveness in soccer markets. Each soccer club faces two markets: The first market is the players' “talent” market, in which each clubs “buy and sell” players' talent. The other market is the audience or fan market, in which teams try to sell their club performances to soccer fans. In the players' “talent” market, information on players' talent is very public, and the market is quite close to being perfectly competitive. The performances of the two markets (the talent market and the fan market) are closely related. If a club succeeds in evaluating players' talents and buying “blue chip” players, it would succeed in generating revenues as well. Szymanski shows that expenditure on wages is closely related to team performances; at the same time, a team's revenues are closely related to the team's performances in the league. Teams that produce good results earn a significant amount of profits, and this enables the team to secure good players. A virtuous circle such as this would bring brand values to the teams. These kinds of competition are going on global wide. The games of prestigious clubs are being broadcasted around the globe, and the broadcasting rights for such soccer games are generating important sources of profit. Teams in different leagues and different countries are competing for players and the revenues generated by facing international viewers. On the other hand, the developments of soccer leagues in Asia are relatively slow compared with the European league. According to Szymanski, although the population of Asia is four times larger than Europe's and their total gross domestic product are almost the same, the size of audiences and the number of teams in Asia are significantly lower. Also, the market values of players in Asian teams are low in comparison with the values of players in European clubs. Szymanski (2016) questions the possibility of formulating globally competitive soccer leagues in Asia to the European level, based on Asia's high economic growth in the past 50 years. Szymanski (2016) suggests that teams can generate revenues by collecting talented players, and can afford to buy talented players by spending these revenues. Based on the success formula, let us check what kind of domestic and foreign challenges the Korean soccer league (K league) faces. First, in acquiring talented players, the K league faces challenges from overseas leagues. The most well-known Korean soccer player, Ji Sung Park, started his professional career in Kyoto, Japan. During the World Cup, by showing his ability worldwide, he was able to move to Philips Sport Vereniging NV (PSV) and, at last, entered the England Premier League. This case clearly shows the challenges the K league faces in acquiring talented players. There are currently some outstanding Korean soccer players playing in foreign countries, which is the result of salary gaps between the K league and European leagues. Second, the K league faces challenge in gathering domestic audiences. A sizeable source of revenues comes from the sales of broadcasting rights to TV stations. TV broadcasting is important not only because it is a source of revenue, but because it also broadens the potential base of soccer fans. The K League is currently having difficulties in finding a sufficient number of TV stations or channels to broadcast these games, because of low viewer ratings. In 2013, only one TV channel broadcasted soccer games regularly. In contrast, all baseball games in Korea are broadcast on a daily basis. Then, why does soccer have low viewer ratings? The K League faces not only domestic, but also international competition. Traditionally, the popularity of baseball is strong in Korea, which is similar to the USA and Japan. Currently, KBO (Korean Baseball Organization) attracts much larger audiences compared with the K league. Also, foreign soccer leagues create huge challenges for the Korean league. Several Korean soccer players are playing in foreign leagues, which attract Korean soccer fans. Naver, the largest Internet portal site in Korea, showed the highlights of a match between FC Barcelona and Real Madrid, which took place on March 23, 2015. The highlights recorded 1038 thousand clicks (as of April 5, 2015). Korean soccer league confronts domestic and foreign challenges at the same time, in both acquiring talented players and attracting audiences.