The 'distribution rivals' Lotte and Shinsegae baseball teams received conflicting management report cards last year. While the standings favored Shinsegae, the performance improvement trend was more pronounced for Lotte.

According to the Financial Supervisory Service on the 6th, the Lotte Giants recorded a revenue of 72.2 billion won last year, a 27% increase from the previous year. During the same period, operating profit jumped from 560 million won to 11.8 billion won. Founded in 1975, the Lotte Giants are 98% owned by LOTTE Corporation and 2% by LOTTE Aluminum. Last year, they ranked 7th.

Graphic=Jeong Seo-hee

The revenue of the Shinsegae baseball team, which operates the SSG Landers, was 61 billion won last year, a 4% increase from the previous year. Operating profit dropped by 55% to 2 billion won. The SSG Landers are 100% owned by Emart. In January 2021, Emart acquired 100% of the equity in the SK Wyverns, which were previously held by SK Telecom, for 135.3 billion won, changing the brand. Last year, they ranked 6th.

The increase in audience numbers was the key differentiator in the performance of both teams. According to the Korea Baseball Organization (KBO), the total attendance for the 10 professional baseball teams last year was about 10.89 million, a 34% increase from the previous year, surpassing 10 million for the first time in history. During the same period, the Lotte Giants' attendance rose by 38% to approximately 1.23 million, while the SSG Landers' attendance increased by 7% to about 1.14 million.

As the audience numbers increased, so did performance. Last year, the Lotte Giants' ticket sales increased by 32%, advertising revenue by 20%, and merchandise sales by 80%. Since the team's operating costs were not significantly different from previous years, these gains were converted directly into profits. A Lotte Giants official noted, 'As audience numbers grew, ticket, merchandise, and food and beverage (F&B) store sales all increased, driving overall revenue.'

In contrast, the SSG Landers, which had already drawn 1 million spectators in 2023, saw a relatively modest increase in attendance, and their revenue only increased slightly.

On Mar. 23, the game between the Lotte Giants and LG Twins took place at the Jamsil Baseball Stadium in Songpa-gu, Seoul, as part of the 2025 Shinhan SOL Bank KBO League. The 23,750 tickets sold out for the second consecutive game following the opening match the day before. /News1

Professional baseball teams are often dismissed as 'money-losing businesses.' Each team generates annual revenues between 60 billion and 80 billion won, but most are operated with financial support from their parent companies, and many are in the red. Last year, the Kia Tigers, KT Wiz, and Hanwha Eagles reported losses.

However, as professional baseball becomes more popular, the dependence on parent companies is decreasing. Last year, the Lotte Giants earned about 29.1 billion won from subsidiaries, including LOTTE Corporation (4.3 billion won), LOTTE Chilsung Beverage (3.2 billion won), and Lotte Shopping (3.2 billion won). This accounts for about 40% of their total revenue. The share of subsidiary revenue for the Lotte Giants has been decreasing from 58% in 2021 to 53% in 2022, and to 46% in 2023.

The revenue the SSG Landers earned from Shinsegae subsidiaries last year was 21.6 billion won, accounting for 35% of the total. Considering that the share of subsidiary revenue was 42% since 2021, this indicates a reduced reliance on subsidiaries.

In the industry, there are analyses suggesting that as baseball becomes more popular, dependence on parent companies has decreased, but there are also interpretations indicating that contributions have declined due to poor revenue from distribution subsidiaries. In fact, for SSG Landers, revenue from subsidiaries last year dropped by about 3 billion won compared to the previous year (26.1 billion won).

Shinsegae Group conducts the largest scale discount event in the first half of the year known as 'Landers Day' every April, which marks the start of the professional baseball season. All retail affiliates, including Emart, Shinsegae Department Store, and Starfield, participate. The photo shows the view of Emart during the 2023 Landers Day period. /Courtesy of Shinsegae Group

An official from a baseball team stated, 'Most professional baseball teams are operated with revenues from their parent companies' support funds,' and added, 'Even if profits improve, they would still be in the red without the support funds from subsidiaries.' They continued, 'While we are gradually reducing dependence, continuous new investments are ongoing, making it difficult to achieve complete self-sustainability.'

Samil Accounting Corporation, which conducted the external audit of the SSG Landers, pointed out uncertainties related to going concern for two consecutive years until last year. In last year's audit report of the SSG Landers, Samil stated, 'Current liabilities exceed current assets by 15.1 billion won, raising doubts about its ability to operate as a going concern.' This instability is not unique to this team. The Kia Tigers, Samsung Lions, and Hanwha Eagles are in a state of complete capital erosion with negative total capital.

Nevertheless, corporations are determined to continue related investments in the future. Although the performance of the baseball team appears modest, there is a belief that, given the ongoing popularity among younger generations, they can create a synergy effect by linking it to other businesses of the group. The Lotte Group plans to invest 234.4 billion won to reconstruct Busan Sajik Stadium, aiming for reopening in 2029. Shinsegae Group is set to unveil Starfield Cheongna, combining a dome stadium, shopping mall, and accommodation facilities, at the end of 2027 with an investment of about 2 trillion won.