The Hidden Reason Why the 'Sports Empire' USA Bought KBO League Broadcasting Rights

The opening game of the 2020 professional baseball season between Doosan and LG was held without spectators, with LG cheerleaders cheering on./Photo by Hyunmin Kim kimhyun81@

[Asia Economy Reporter Kim Heung-soon] The Korea Baseball Organization (KBO) League attracted global attention by starting its new season without spectators on the 5th of last month amid the spread of the novel coronavirus disease (COVID-19). The American sports media outlet ESPN purchased the broadcasting rights for the KBO League and has been broadcasting one game live daily across the United States as of the 21st. The intention was to provide sports fans with content from Korean professional baseball to fill the void left by the suspension of sports leagues both domestically and worldwide. As a result, the NC Dinos gained significant popularity in North Carolina, USA, and major domestic players were introduced in local media, increasing interest in Korean baseball.

There is also another reason behind the purchase of KBO broadcasting rights in the United States, known as a sports empire. It is to operate the sports gambling market where betting is conducted based on real-time game data. One example is 'Daily Fantasy Sports (DFS),' which allows betting and rewards based on game results over a short period ranging from a day to a week. According to the gaming and broadcasting industries, the demand from the DFS market was partially reflected in ESPN’s decision to broadcast the KBO League.

The 2020 season opening game between Doosan and LG in professional baseball is being held without spectators. Photo by Hyunmin Kim kimhyun81@

◆ A 10 trillion won market? ... What is 'DFS'? DFS is based on 'fantasy sports,' which originated among American sports fans in the 1950s and 1960s. Fantasy sports involve users acting as scouts for real games. Users bet a certain amount online, purchase players, form a virtual team, and then convert the actual game statistics of those players into points. The prize pool is distributed to the participant with the highest score. While traditional fantasy sports usually aggregate results over a season to determine rankings, DFS shortens this to a per-game or weekly basis, allowing bets of up to $1,000 to be placed and distributed accordingly.

Although unfamiliar in Korea, the fantasy sports market is rapidly growing in the United States. According to the Fantasy Sports Trade Association (FSTA), the fantasy sports market size in North America was estimated at $26 billion (approximately 28.6 trillion won) as of 2016. The market soared after the U.S. Supreme Court legalized sports gambling in May 2018.

According to the Korea Institute of Sport Science and Policy, the fantasy sports market has grown at an average annual rate of 10.16% until recently. The DFS market alone is predicted to have expanded to over $8 billion (approximately 9.7 trillion won). The two leading companies in the U.S. DFS industry, FanDuel and DraftKings, have joined the ranks of 'unicorn companies,' startups valued at over $1 billion.

DFS company FanDuel homepage capture

◆ COVID-19: A crisis turned opportunity... What about Korea? The prolonged COVID-19 pandemic has also impacted the DFS market. Since the game relies on data from players active in leagues, actual games must be held. However, with the global suspension of professional sports due to infection concerns, service operation became impossible. Recently, as major soccer leagues in Germany, Spain, and England reopened and the U.S. Major League Baseball considered resuming, expectations for market recovery have grown in regions like North America and Europe where DFS is active. Even if leagues resume without spectators like in Korea, teams can still secure data necessary to operate DFS, despite revenue losses.

In Korea, it is currently impossible to operate a system that converts actual game data into points and distributes prize money in the form of fantasy sports. Under the National Sports Promotion Act, only the Sports Toto system, which legally allows betting and payout of dividends in cash, is permitted. There is no legal basis for operating DFS or similar systems.

Some voices suggest that, amid the prolonged COVID-19 pandemic and contraction of the sports industry, it is necessary to consider introducing fantasy sports to leverage their positive functions. This is because there are no reliable means to guarantee safety such as vaccines or treatments, and repeated suspensions or reductions in professional sports operations make it difficult to secure funding for the National Sports Promotion Fund through sports promotion lottery tickets.

An industry insider stated, "Developing fantasy sports games and analyzing and utilizing sports data could foster the industry and increase interest in professional sports." They added, "If gambling factors are analyzed and regulations on rewards and participation methods are established, institutionalization could be possible." Furthermore, they noted, "If soundness is guaranteed, a DFS system where participants pay entry fees and receive prizes could also be used as a project to raise funds for the National Sports Promotion Fund."

This content was produced with the assistance of AI translation services.