A demand analysis for the Chinese Professional Baseball League 1990-2008.(RESEARCH PAPER)(Report)

Executive summary

Baseball is popular in many countries around the world and is undoubtedly the most popular professional sport in Taiwan. The Chinese Professional Baseball League (CPBL) grew consistently since being founded in 1990, with a 9% average annual growth rate of attendance until 1996. A rapid decline in attendance occurred, however, during the late 1990s and early 2000s. The regular season attendance peaked at 1.65 million in 1995 but fell to just 0.3 million in 2000. The CPBL reached its lowest attendance in 2000 with the average of 1,676 spectators per game. Although the demand for Major League Baseball (MLB) has been investigated, few researchers have focused on the Asian professional sports market (e.g. Lee, 2006). This paper is the first to investigate attendance in the CPBL using annual league data from 1990 to 2008 along with demand analysis. More specifically, a demand model is used to investigate the causes of variations in CPBL attendance.

A variety of factors could affect the demand for a professional sport. The dependent variable in the present study was annual league attendance data to specify market demand for CPBL attendance. From the perspective of model parsimony, however, four factors that affected professional sports attendance were included in the current study based on previous literature: real income; a homogenous sport substitute (Taiwan Major League, TML vs CPBL); talent migration (Taiwanese baseball players in MLB); and game-fixing scandals. Results demonstrate that a homogenous sport substitute (TML), the MLB effect and game-fixing scandals in the CPBL negatively influence CPBL attendance. Additionally, real income was found to negatively affect CPBL attendance, making these games an inferior product. These exogenous variables accounted for approximately 91% of variation in the demand of CPBL.

Originally, the authorities of CPBL blamed the decline of league attendance on the existence of TML and game-fixing scandals. This study confirms the argument empirically; the existence of a sport substitute for CPBL and the bribery of players and coaches did have a detrimental impact on the leagues' attendance. The market size for baseball in Taiwan cannot sustain two professional baseball leagues. Additionally, game-fixing scandals seemed to undermine the quality of the CPBL games as well as the fans' trust in the league.

In addition to the existence of a sport substitute for CPBL and bribery of players and coaches, the MLB effect also led to a decrease in league attendance. This finding reveals that talent migration reduces interest among CPBL fans regarding their home-nation baseball league. The MLB effect in the Korean context presented by Lee (2006) was confirmed in this study.

The current empirical study demonstrates that Asian countries, including Korea and Taiwan, face decreasing interest in their home-nation baseball leagues due to the MLB effect. Finally, the current study identified CPBL games as an inferior product. Although it is still unclear in the literature if baseball is a normal or an inferior product, the current findings add to the discussion.

Introduction

Baseball is popular in most places in the world and is undoubtedly the most popular professional sport in Taiwan. The Chinese Professional Baseball League (CPBL) grew consistently since being founded in 1990, with a 9% average annual attendance growth rate until 1996. However, during the late 1990s and early 2000s, a rapid decline in attendance occurred. The regular season attendance peaked at 1.65 million in 1995 but fell to only 0.3 million in 2000. The CPBL reached its lowest attendance in 2000 with an average of just 1,676 spectators per game. Game attendance provides one of the major sales revenues for professional sports (Chen, Stotlar & Lin, 2009). Fluctuations in game attendance imply variations in ticket sales, which warrants the attention of professional franchises.

Understanding attendance variation also has business and academic implications. From the business perspective, understanding the factors that drive the variations in game attendance provides valuable information for more effective decision-making in terms of developing sport management and marketing plans. Additionally, most previous studies regarding game attendance have concentrated on individual characteristics along with cross-sectional data to analyse game attendance (Wells, Southall & Peng, 2000; Zapalac, Zhang & Pease, 2010). The current study, however, explores the market-level or aggregate-level variables that influence game attendance, employing time-series data based on economic theory. From the academic point of view, this is worthy of sports management and marketing researchers' efforts. Although the demand for Major League Baseball (MLB) has been investigated, few researchers have focused on the Asian professional sports market. Accordingly, the need for the present study is justified not only for adding literature to the domain of sports management but also for deepening sports managers' understanding of why game attendance fluctuates from an economic standpoint.

A greater understanding of the market demand for CPBL tickets may come from a critical look at five variables impacting attendance levels. Among the aggregate-level variables associated with MLB attendance levels, ticket price and real income are the most common economic variables. Moreover, homogenous substitutes may …