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Japanese sport sets out on the long road back

  • Empty stadiums mean NPB and J-League clubs will struggle to make a profit this season
  • Club-owned digital streaming platforms are keeping fans engaged       
  • The effect of Covid-19 on Japanese sport will be felt well beyond 2020

Japan’s biggest domestic sports league, Nippon Professional Baseball, commenced its 2020 season on June 19 following a three-month delay due to Covid-19.

The country’s professional football league, the J-League, is also set to return to action this month, with second and third division matches kicking off on June 27, and the top division on July 4.

The return of two of the most popular sports is a much-needed boost for Japanese sport. But local industry observers say the pandemic has taken a heavy toll and recovery will take time.

“I would say that NPB clubs will be likely to lose half of their revenues this year,” says Itaru Kobayashi, a professor at J.F. Oberlin University in Tokyo and former baseball professional and director for the Fukuoka SoftBank Hawks. “They will not be bankrupt or in any dire straits as their parent companies are there to help…But as the Japanese corporations are not in great shape, they will cut NPB expenses.”

As in the other domestic professional sports leagues, Japan’s baseball teams are owned by the country’s major corporations.

Martyn Jones, executive vice president of sports OTT platform DAZN, which holds NPB media rights, said of the league’s restart: “It is too early to speculate about the next 6-12 months, but we feel very encouraged to see sports resuming not just in Japan but also globally.

“Clearly, though, sport will not have returned fully until fans can be filling Japanese sports stadiums again, and we very much look forward to the point where that is possible.

Michael Meddle, the managing director of Meddle Sports Marketing in Tokyo, said the NPB had done well to restart, but noted that a large chunk of the season had been wiped out, including some tentpole annual youth matches.

“The number of games was reduced to 120 (usually 143 games per season), there was no All-Star game and I think the Climax Series will be cancelled or reduced, but I guess the NPB is doing better than MLB.

“However, all high school and university sports events have been cancelled and the cancellation of high school baseball (Koshien) was big news.”

The Summer Koshien, the finals of the National High School Baseball Championship of Japan, is a major event in the country’s sporting calendar.

Small crowds allowed

Up to 5,000 fans will be allowed into Japanese baseball and football matches from July 10. Fans will be required to wear masks, wash their hands frequently and avoid shouting.

However, with most baseball and J-League games normally played out in front of full stadiums, the commercial impact of this move will not shift the revenue needle for the sports by much. NPB teams heavily rely on stadium revenue – Kobayashi estimates about half of clubs’ roughly 180bn Yen ($1.68bn/€1.49bn) revenues comes from this source. The rest is generated through sales of media rights, sponsorship and merchandise.

Near-neighbour South Korea was among the first to resume professional baseball during the pandemic, but without gate revenue some clubs there are now facing financial difficulties.

In Japan, the story is similar. Playing in empty or sparsely-populated stadiums for a lengthy period means clubs will struggle to make a profit this season.

Kobayashi says media-rights income is also relatively low in the J-League and basketball’s B-League, too. “Both of them rely heavily on sponsorships, 45 per cent and 51 per cent respectively,” he says. “Broadcasting rights fees are not big in Japan – only 15 per cent of NPB clubs’ revenue come from it while its US counterpart, MLB, gets 51 per cent of its revenue from media rights.”

Digital shift

As in other markets, Japanese professional sports organisations have been attempting to control damage by engaging their fans online as much as possible.

Shusaku Yamashita, general manager of the corporate partnership division at the J-League, told SportBusiness: “We cannot foresee when we can have a stadium packed with people again, but we are planning to provide events for fans through digital platforms. We strongly believe it is important to make this opportunity a chance to reach out to new fans and let more people enjoy our football.”

To generate more revenue from games with no fans, Kobayashi says the NPB should explore a richer digital media offering, perhaps emulating parts of MLB’s highly successful MLBAM digital platform.

Long-term effect

The biggest hit to Japan’s sports industry was, of course, the failure to execute the Summer Olympic Games as planned. Originally scheduled to take place between July 24 and August 9 this year, the Olympics have been postponed to 2021, following an agreement between Japanese prime minister Shinzo Abe and International Olympic Committee president Thomas Bach.

In recent weeks, both the Japanese MotoGP and the Formula One Japanese Grand Prix have been added to the cancellation list.

Covid-19 struck just after Japan had enjoyed one of its greatest sports, and sports business, success stories. The 2019 Rugby World Cup generated nearly $5.37bn (€4.75bn), according to a report published by EY, making it the most economically successful event in Japanese sporting history.

Kobayashi, though, sees the effect of Covid-19 on Japanese sport being felt beyond 2020.

He highlights the fact that Japanese people tend to be cautious and hygiene-conscious, and thinks it is not likely that the country will return to the full stadiums witnessed pre-virus until the public starts to feel secure without social-distancing.

“The Japanese media did a tremendous job to make the great majority of Japanese take social distancing seriously, perhaps more than we needed to.”

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