The Economics of Ichiro

Jeff · February 2, 2005 at 12:37 am · Filed Under Mariners 

A host of articles from 2000 and 2001 talked about how Ichiro’s arrival would give a shot in the arm to regional tourism. So how’s that worked out?

Japan Today has a piece from Kyodo News this morning that says it’s gone about as well as can be expected. Ichiro’s presence has been impactful not just for the Mariners, but for Seattle at large and the rest of Washington. [Japan Today’s server seems to be up-and-down, so I’ve quoted the two most relevant bits.]

According to the story, “Ichiro’s arrival in the city further increased the number of Japanese visitors by 30 percent in the first year of his major league baseball career.” Obviously, that increase was not all Ichiro — there has been a multipronged marketing effort at work for a while now — but the thrust of the article is that the brilliant right fielder piqued peoples’ interest, they came to see him, and then stayed for the wine, the mountains and, um, the scenery from “Brother Bear.” No, really.

But what about team revenue specifically? Is anybody buying those hellaciously expensive signed Ichiro baseballs in the team store? Darren Rovell said yup in 2002, and today’s story goes a bit further.

“[Miki] Harada [of Azumano International Inc, the official travel partner of the Mariners] quoted a veteran freelance tour guide as saying proceeds from the goods have skyrocketed 150 times since Ichiro’s addition to the team.”

Okay, this statistic can’t be right, and my guess is that it is intended to mean that merchandise sales are 150 percent of what they were before Ichiro came west. Take the unofficial stats from a “veteran freelance tour guide” (?) with a grain of salt anyway — but if that’s close to accurate, a time-and-a-half bump in merch sales is pretty unreal.

Just another way the wizard of right field makes his presence felt.

Comments

27 Responses to “The Economics of Ichiro”

  1. Troy on February 2nd, 2005 10:44 am

    Welcome Jeff! Good info, too. I think it’s pretty clear that Ichi’s worth more than just marginal wins/losses. I’d expect that financial impact to continually decrease over time (I’m sure it already has) as more Japanese ballplayers make their way to the states and further divide the rooting interests of thier homeland.

    Nonetheless, Ichiro!’s a steal, and wholly unworthy of all the criticism he receives from some short-sighted analysts. Thanks for helping dispel those myths.

  2. Greg on February 2nd, 2005 10:46 am

    Read this article too, and it affects me directly. I sell second-hand clothing in Seattle. I’m kinda small, (as stores go), so I feel the market first, last, and any shift in customer spending moves my bottom line greatly. Top Ramen vs. T-bone! Japanese buy a large percentage of the vintage clothes I sell. I noticed last year that there is a trend in the frequency of visits which corresponds with home games. There is a language barrier, but I managed to elicit from a twenty-one year-old or-so, who was grabbing piles of Women’s clothing, that he was going to watch Ichiro. I didn’t find it completely odd that he was cross-shopping, because after all it is Capitol Hill. He said that some efficient boutique owners in Tokyo are paying for these guys to come here and scour Thrift stores picking treasures, in turn they get a free ride on the Mariner Line. I gotta tell you all that I, for one, am looking forward to the new season for reasons more Buck than Bucky!

    On a side note, I have been reading for couple of months. Thanks for getting me through the off-season. I’m only happy 162 games out of the year, but you have brought some smiles! I look for more optimism however. The promise of a lost game is sweeter than no game at all. (see NHL…) Thank You USS Mariner

  3. Jeremy on February 2nd, 2005 10:53 am

    From a business standpoint, Ichiro brings in more revenue than he costs. While we can debate from a baseball side whether he’d be worth $20M+ per year, there is no question from a financial standpoint that he is worth that. Many British bands have come to the US, but there is only one Beattles.

  4. IgnatiusReilly on February 2nd, 2005 11:14 am

    150X might not be wholly unreasonable – 2001 was our crazy good year after all. Heck, my dad bought a M’s cap that year, and he probably watches two or three games a year.

  5. Gabriel on February 2nd, 2005 11:15 am

    This is terrific that you and Peter will be featured here now, Jeff. I have enjoyed your work since San Shin and you write with great humor and intelligence.

    I couldn’t help but think of a certain Harper’s article when you used the word ‘impactful’; maybe some others have read it. I couldn’t find the original, but here is a link that tells the story:
    http://books.guardian.co.uk/news/articles/0,,996943,00.html

  6. Evan on February 2nd, 2005 11:36 am

    For 2001, a 50% gain in sales seems low, but a 150% increase is entirely plausible.

    So, I expect that while the claim of a 15000% increase were incorrect, a 150% increase seems about right. Which means that sales post-Ichiro were 250% the pre-Ichiro sales.

  7. paul mocker on February 2nd, 2005 12:48 pm

    The wizard of right field! I like it! It links Ichiro to the original Wizard and that is simply good for baseball.

  8. Chris Begley on February 2nd, 2005 1:26 pm

    I think you should deduct the “increase” over an average player an Ichiro makes for the team from his salary when calculating if he is worth it. For example, say he earns the team an extra $10 million. Well, lets say Ichiro is worth 8 million a year, this would justify paying hime 10-12 if that is what it took to keep him in town – from a business perspective of course, and as long as you only subtract 8 million from your real, operational payroll (as opposed to the payroll that Bob Finnigan makes up every month or so)

  9. Jim Thomsen on February 2nd, 2005 2:27 pm

    So the big question is, as Ichiro heads into the second year of his four-year deal … is how soon do you start talking contract extension? Or at what point? The market is sky-high right now, as is Ichiro’s perceived value on and off the field … but do you wait till the last year and hope for a market correction, or do you decide at some point around the midlife of his contract that emotionally, financially and performance-wise, the idea of Ichiro retiring as anything other than a Mariner is a prospect the fans and front office are unwilling to face … and, as such, hand Ichiro the team checkbook and let him fill in his own amount?

    What, strategically, makes sense here at this point?

  10. devil's advocate on February 2nd, 2005 2:29 pm

    Well, you see, Chris, that extra $10 million wouldn’t really be $10 million, because after expenses like printing up “#5 Adrian Beltre” posters, repainting the lines on the parking lot, a new batter’s eye at Safeco, and keeping a few million in profits for the owners… Well, obviously there’s nothing left to put back into payroll, silly! OK, maybe $1 or $2 million – hey, that could let us resign Ron Villone!

  11. devil's advocate on February 2nd, 2005 2:34 pm

    Re: the strategy of resigning Ichiro, I think you pretty much ask him whether he wants a contract extension now or later, and you do whatever comes out of his mouth. Same thing I wouldn’ve done for Edgar to keep him in Seattle – “So, Gar, you feel like hashing out a new contract this year? No? OK, come talk to me when you’re ready.”

  12. Jeff in Fremont on February 2nd, 2005 3:11 pm

    I work at a nice hotel downtown. I can tell you about the busloads of Japanese tour groups that came in for a few days for the sole purpose of seeing Ichiro play. They would come back to the hotel loaded up with souveniers from the Mariners Team Store. Many would bring an extra suitcase just to pack all their goodies.

    I think it is safe to say that Ichiro has an economic impact that is huge in comparison to his salary. Probably more so than any other player in the game. I think the only player that would even come close is Bonds.

    I think there’s an unwritten agreement between Yamauchi and Ichiro so I’m not worried about him going anywhere, but if they were to go and sign him to a ten year/$130 million deal it wouldn’t be a bad thing. At the very least we continue to enjoy the economic impact, at the very best we get to see him challenge for 3,000 career hits…and, hopefully, a couple of championships.

  13. Adam T on February 2nd, 2005 3:22 pm

    Re: #12

    My old college roommate purchased an Ichiro! jersey before he headed back over to Japan.

    He also drove up a couple years ago so I could take him to a Mariners game (and his first MLB game). This was also done several times from the less than 50 Japanese exchange students that went to my small school in Portland. I can imagine how this could be reproduced on a greater level from more highly populated areas.

    Ichiro! is a cash cow for Mariners (and the Northwest).

  14. Tim K. on February 2nd, 2005 4:08 pm

    Re: #9. That’s an interesting question. My guess is that waiting for a market correction would be an exercise in futility. Witness the current offseason — I think most of us were surprised by the number of irrational contracts handed out. Either a correction is not coming anytime soon or, arguably, this is a correction — I mean, it’s not like Beltran got ARod or ManRam years or money.

    But I digress. Even if you assume a general market correction at some point, it would still seem likely that there will always be at least one team with a new owner/new GM/highly disgruntled fan base that will be willing to overpay for a name player to make a splash and send a message to the fans/media/rest of league. Why risk having Ichiro be that guy for some other team?

  15. Evan on February 2nd, 2005 4:24 pm

    It could also be that teams think that next year’s free agents will be lousy as a group, so they planned to spend money this year rather than next year.

  16. andy on February 2nd, 2005 4:32 pm

    I remember during the off-season, I commented that perhaps this higher pricing WAS a correction (or just regular inflationary/increasing prices), and not just an off-year. This was quickly shot down by DMZ (or was it Dave) for “reasons that are too lengthy to go into in the comment,” or something to that effect. Do you still feel this is the case, and if so, would you care to get into it now, during these slow news days?

  17. Jim Thomsen on February 2nd, 2005 5:15 pm

    I agree that Ichiro should be a Mariner for as long as he plays, and I think that everybody involved agees as well. I’m simply interested in the strategic details of how that might get done — and when.

  18. Steve Thornton on February 2nd, 2005 6:35 pm

    I wonder. After all, Japanese tourism in more usual places like Hawai’i has picked up too, with no Ichiro. I think it has more to do with the improvement in the Japanese economy than a baseball player.

    That said, one key to Ichiromania that’s not true of any other player is that the increase in fans comes from overseas, not other parts of the country. I don’t think second-and-later-generation Japanese-Americans are particularly ga-ga over him, at least not more than any other kind of Americans. Bringing in tourists from another country certainly helps the balance of trade, which is a good thing.

    Another thing I’d like to know is, what is the increase in sales of non-Ichiro-related Mariner souvenirs, and baseball souvenirs in general? The Mariners in particular have introduced a LOT of new lines of expensive goods, like the pink hats, the old 70s logo stuff, and on and on. Other teams have done likewise.

    Some of that is probably in response to Ichiromania — the Japanese I’ve seen at the ballpark tend to be seen in anything BUT straight current regalia (except for jerseys); they love the pink and powder blue stuff. The M’s are definitely picking up on modern merchandising style, which is a very Japanese thing — everything looks like Hello Kitty (ventually EVERYTHING will look like Hello Kitty).

    But there’s a lot that ain’t. The explosion in sports regalia in the last few years has been insane. I’m thinking mostly of the super-sized basketball, football and hockey (huh?) jerseys you see on rap stars and their followers down at the mall, but there’s baseball stuff in the mix as well. And needless to say the prices are astronomical.

    I know that in terms of return on investment for stadiums, professional sports is probably the worst imaginable thing a municipality could do with their money, as there essentially is none. And, for a related reason (because they pay for only a portion of the cost), the return for the team on the investment in the player is tremendous. The M’s are surely making out like bandits on Ichiro. The economy in general? I would think dramatically less so.

  19. greenlaw9 on February 2nd, 2005 7:06 pm

    This is off-topic, so feel free to delete it, but I just wanted to get some feed-back…

    I know that ESPN has hitting charts for each player, but I was wondering if there is such a thing as hitting charts for a given park during a year, broken down by home and visiting teams if possible.

    If you’re wondering why I’m asking this, I was just sitting in class today (really boring lecture) and I got thinking about how much it would help the M’s to possibly move in the fences a bit given such things as:

    How many more home runs would we hit? vs how much would ‘they’ hit?

    What distance would be optimal for bringing them in?

    Might it be beneficial to just shorten the fence in one area of the park (like maybe bringing in the wall in left twenty feet in front of the scoreboard and creating some sort of outdoor patio – since they seem determined to ruin the one in center – and reducing the wall to eight feet)?

    As a bit of a side question to this, but still relavent, how can a team could move home plate closer to the walls (instead of moving the walls in) and keep the same foul poles in the same place? Is that even possible? How do they compensate for that?

    I think you can see where I’m going with this. If any of you have the time and the interest I would love to see you put your touches on this and give your thoughts.

    Or, if you’re limited for time, I would greatly appreciate a little hint as to where I could find this sort of stuff out…

    Thanks!

  20. Vin on February 2nd, 2005 7:14 pm

    Jeff Shaw is the greatest writer in the history of the internet. Seriously, have you people read his story about disc golf? Amazing. I <3 Jeff Shaw.

    This isn’t that suprising to me though. Afterall the Mariners turned in their worst season since (I think) they had a pitcher named Boskie, yet the team still managed to make money. There was only one reason to be excited about this team in 2004 and it was Ichiro (with apologies to the Edgar retirement tour and Bucky). Some things can’t be calculated or measured. Those things are love and Ichiro.

  21. Jeremy on February 2nd, 2005 7:57 pm

    Speaking from experience as a former Mariners retail worker, I can attest to the power of Ichiro in terms of retail.

    Ichiro shirts, Ichiro hats, Ichiro bats, Ichiro balls (or Ichi-Balls, as I like to refer to them), Ichiro posters, you name it, anything with Ichiro’s likeness was (still is) popular. It was never surprising to me to see some of these tourists drop down 500 bucks on Ichiro merchandise alone.

    The power of Ichiro. To mock Tom Paciorek,

    “Wow”

  22. Matt on February 2nd, 2005 8:03 pm

    I’ve often considered your questions, Greenlaw, regarding moving the fences in, and I’d be interested in hearing what others have to say. I think an intern could spend a couple hours on MLB.com and figure out how the Mariners tend to hit compared to division and other AL opponents, in that order.

    One thing, though … I don’t really know how to explain this one, but trust me, there’s no way you can keep the foul poles in the same geographic spot and move home plate up (unless we’re playing logic games here, and someone says that they could do so if they were able to stick in new foul poles as well).

  23. Noriko J. on February 2nd, 2005 11:53 pm

    RE #12 I agreed with you that there is a secret agreement between Mr. Yamauchi and Ichiro. I have read in a Japanese article that Mr. Yamauchi gave Ichiro 5,000 shares of Nintendo for his achievement in 2004. It said that the shares, which were worth about $500,000 belonged to Mr. Yamauchi personally and Ichiro “gladly received” them.

  24. Jeff in Fremont on February 3rd, 2005 12:18 am

    23, yeah let’s face it, Ichiro is an M for life. And that is not a bad thing. I don’t expect the M’s to take it all next year, but given that Moyer and Boone come off the books next year, that’s another $17 million that I expect Bavasi to spend well. Hopefully on pitchers. Man, I can’t wait for spring training people, this is going to be an awesome year!

    Get excited people, this year is gonna rock! Go M’s!

  25. ray on February 3rd, 2005 1:57 am

    Jeff in Fremont: Are you from Fremont California? Me too. Sorry for the stupid comment, now back to Ichiro. I have been living in Japan for many years. Ichiro is Elvis here, thus the first name only bases. I’m sure you know that already. His father is just as famous and is also refered to with one name: “chichiro”. It is a mix of “chichi” (means father) and “Ichiro”. Anytime one of my students says he is going to Seattle, he says he will also go see Ichiro. I never ask if that is the main reason, but it is always on their itinerary.

  26. Tim K. on February 3rd, 2005 11:58 am

    Re: #9 and 17. Sorry, JT, didn’t mean to be non-responsive. I thought the question of a future market correction was an interesting one, but I guess that wasn’t your point.

  27. Tangotiger on February 4th, 2005 9:21 am

    There some interesting work being done by David Pinto on fielding, and he’s spotlighting Ichiro. I apologize if this is considered spam/hijacking.

    http://www.baseballmusings.com/archives/008318.php