The story to date

The owners of the 12 teams in Japanese professional baseball were determined to merge two of the teams with the weakest attendance and also seemed bent on merging two more teams and converting into a single league of 10 teams. The owners’ pushed through their plans despite widespread opposition by fans nationwide, the Japanese baseball players’ union, and the efforts of an entrepreneur to step in and buy the most troubled franchise.

The Japanese players’ union felt so strongly, they threatened to hold a baseball strike, which had never happened in Japan before. They had collected 1.2 million signatures from Japanese baseball fans to prevent the elimination of one team, but were given the cold shoulder by Nippon Professional Baseball (NPB), the organization governing the sport. (The photo shows a protest against the merger of the two teams.)

Finally, early in September, the players’ union set a deadline for the owners to meet their demand that the merger of the Kintetsu and Orix teams be postponed for a year while the players and owners met to hold discussions about the advisability of the merger. The players also wanted to better working conditions for players, liberalized requirements for new team owners, a change to the draft system, and new revenue sharing method.

If the owners failed to meet these conditions, the players decided to strike for all weekend games during the month of September. This was yet another instance of the players’ union outmaneuvering the owners. The partial strike was a means to avoid the problems created by a full-scale strike such as those that took place in the United States and soured fans on the sport for years afterward.

The owners seemed intent on joining hands and walking off the cliff together. They held a meeting two days after the players voted to go on strike and formally approved the Kintetsu-Orix merger. Perhaps they thought they were calling the players’ bluff, but if so they badly misread the situation. The vote was 11-0 in favor of contraction, with the abstention of the Hiroshima Carp. The Hiroshima team thought it stood to lose too much fan support because of local opposition to the owners’ plan to eliminate one team.

The owners also determined that they would go into the 2005 season with 11 teams in two leagues, and they would demand compensation from the players’ union for any revenue lost during the strike. In a concession to the wishes of Pacific League team owners, the owners’ group approved regular season interleague play after they could not devise a feasible plan to merge two more teams and create a single league.

The other Pacific League teams wanted the Fukuoka Daiei Hawks, a successful and popular team with financially struggling owners, to merge with the Chiba Lotte Marines, but Daiei insisted they wanted to retain ownership of the Hawks and to keep it a separate entity.

The players’ union and the owners continued to negotiate to avert a strike, however, and this was accomplished for one week. The owners agreed that the single merger would be the only one, and they even agreed to hold further talks to consider ways to keep the Kintetsu franchise afloat. After the owners made this concession, the players decided it would be better to keep talking than to stage a walkout. The owners also agreed to lower the barriers to new ownership and establish a joint player-management committee to study reform of the draft system.

But the players had one more demand that the owners refused to meet. They wanted a new team to replace the one being eliminated by the merger, and they wanted it in operation for the 2005 season. The players would have relented and played the games if the owners had agreed to make “their best efforts” to create a new team for 2005, but the owners wouldn’t budge. As a result, the players decided to not to play the scheduled weekend games, but return to negotiations with NPB the following week. The owners were incensed and said they would seek compensation for financial losses incurred by the strike.

While the confrontation with the players and the owners continued in the center ring, two other subordinate plots continued to play out. The first involved moves by other parties to create a new 12th team. As we saw before, Takafumi Horie, the president of Internet provider Livedoor early on offered to buy the Kintetsu Buffaloes, but was rebuffed by Japanese baseball. They refused to listen to his proposals and claimed the merger of Kintetsu and Orix was a fait accompli.

Horie did not give up trying to create a new team, however, and kept working during the escalating confrontation between the players’ union and baseball owners. After his offer to buy Kintetsu was rejected, Horie set his sights on forming a new team in Sendai, a city in northern Japan without a professional team, but which had played host to the Lotte Marines for four years in the 70s.

Just two days before the scheduled strike, Livedoor applied to NPB to create a new team in Sendai. Horie said they decided on Sendai because that city had quickly decided they would be willing to host a new franchise. Livedoor also declared it would be ready to play in 2005, and would hire a manager and coaching staff by the end of the following month.

Horie was responsible for creating in the public mind throughout the events of the summer the possibility that a new team could be successfully created from scratch. As a young, self-made entrepreneur in a new industry, he also had captured the public imagination. But his success generated his own competition.

Out of nowhere, Hiroshi Mikitani, the president of Rakuten Inc., Japan’s largest Internet shopping mall operator, stated he intended to establish a baseball team in Kobe. (Kobe had been the home of the Orix Blue Wave.) Mikitani was also young (39) a Harvard graduate and former banker, and an entrepreneur in a new industry. His company, Rakuten, owned a J League professional soccer team. In fact, Mikitani (photo) formally applied for permission to create a new team one day before Horie made his application for a team in Sendai.

It is worth noting that the old guard of Japanese baseball, companies primarily in traditional brick and mortar industries, were not able to move with enough swiftness or imagination to deal with the problems faced by the game, nor were they able to summon the courage to break the stranglehold on the sport by the Yomiuri Giants and their parent company’s owner. In contrast, two younger, energetic entrepreneurs from the Internet industry stepped forward, convinced that they could field a team immediately and bring the sport into the 21st century.

Just when it seemed as if Japanese baseball could not stand any more upheaval, a touch of the bizarre was added when a scandal erupted among the owners over illegal payments to a star college pitcher.

In Japan’s baseball draft system—which the players’ union was anxious to reform—players from university or corporate teams could designate which professional team they wanted to play for. Many of the star prep players designated the Yomiuri Giants, who had established themselves as Japan’s team, played in Tokyo, had the largest media coverage, won the most championships, and provided enough exposure to enable the players to find comfortable careers when their playing days were over. The Giants had snared many talented players this way.

They also were trying to coax Yasuhiro Ichiba, the ace pitcher of Meiji University’s baseball team, to become a Giant. To give him something to think about, the Giants illegally paid him 2 million yen. The payments came to light when anonymous letters detailing the payments were mailed to Takahiko Beppu, the former manager of the Meiji baseball team, other Meiji baseball officials, Ichiba’s family, and Yokohama BayStars owner Yukio Sunahara. As it turned out, both the Yokohama team and the Hanshin Tigers also had slipped money to Ichiba under the table. In Yokohama’s case, a scout had paid Ichiba 600,000 yen for “taxi fares and nutritional expenses”, while Hanshin could only come up with 250,000 yen. (Perhaps that’s one reason why the Tigers seldom enjoy much success on the field.)

Judgement was swift when the affair became public. The wicked witch of Japanese baseball, Yomiuri President Tsuneo Watanabe, stepped down from his job to take responsibility. He was joined in retirement by three other Yomiuri officials, Hanshin Tigers owner Shunjiro Kuma, Tigers’ President Katsuyoshi Nozaki, and Yokohama’s Sunahara. The latter’s contrition extended only to baseball, however, as he said he would remain his post as chairman of Tokyo Broadcasting System, another Japanese TV network.

In addition, the officials of all three teams said they would drop plans to draft Ichiba. For his part, the pitcher said he had “gradually forgotten” that taking under the table payments from three different teams was not the sportsmanlike way to behave, and promised to mend his ways.

As far as I know, it was never revealed who sent the anonymous letters fingering the owners. But the Hanshin team was the first to break with Yomiuri when the latter wanted to recreate Japanese baseball by eliminating more teams and creating a single league.

This was a classic sequence of events in Japanese society, and is not infrequently seen in politics and business. Everyone at the top is assumed to have dirty hands, but they maintain a conspiracy of silence. It is similar to the MAD concept, or mutually assured destruction, in which the American and Soviet nuclear superpowers maintained peace. If one starts a war, they both go down together. In Japan’s case, somebody somewhere has the goods on everyone, so no one wants to be the first to rock the boat. Watanabe’s intransigence seemed as if it would sink Japanese baseball altogether, so the boat was already rocking when the other owners fought back. It was almost predictable that they would walk the plank together.

At the end of a summer full of controversy, Japanese baseball players were about to go on strike because of owner stubbornness and unwillingness to bend, two hungry entrepreneurs were trying to break into the game, and the owners of Japanese baseball had symbolically committed group hara-kiri. Was the game about to self-destruct in Japan?

On deck for tomorrow: The phoenix rises from the ashes