Monday, February 04, 2008

Dmedia first to own baseball, basketball pro teams

It's not official yet, but Dmedia is set to become the first Taiwanese business to own both a professional basketball and a professional baseball team in history.

Local media reported that Dmedia -- a company that manufactures GPS devices -- has signed the agreement to purchase Makoto Cobras, one of six teams in Taiwan's domestic pro baseball league Chinese Professional Baseball League (CPBL). The purchase is pending as it requires approvals from the other five team owners.

The interesting part is why dmedia, a company with the captialization of NT$1.1 billion, wants to do this. Owning a pro baseball team is not a safe investment in Taiwan since there has been no profitable team, and the game-fixing rumor just won't go away.

Approximately the annual budget of a SBL team is around NT$10-15 million with Yulon, whose annual budget surpassed NT$30 million, the exception. Owning a baseball team is expected to cost dmedia ten times of that amount, which will be more than NT$100 million.

For any company, the expense on a SBL team could be easily seen as spending on advertisement. And it's an year-round ad at a cheap price of NT$15 million. The company name and logo will be mentioned or appear on television, radio, newspapers and magazines all year long.

That said, owning a SBL team makes sense for any local company with ambitious promotion plans.

But a baseball team? At a price tag of over NT$100 million? Plus the potential image damage of game-fixing? I'm not sure about that. Looks to me it's not worth it. There must be other reasons that dmedia wants to be actively involved in the sports business in the span of less than one year.

A reasonable guess is Taiwan's first ever sports lottery, which will be launched as soon as May. But I'll leave it at that for now and talk about it later, maybe after the lunar new year break.