The SK Wyverns baseball team will be sold to E-Mart. SK Group decided to hand over the club to Shinsegae Group after 21 years of acquiring and operating Ssangbangwool Raiders in 2000.
According to management and investment banking (IB) industry on the 25th, E-Mart plans to conclude negotiations with SK Telecom, the largest shareholder of SK Wyverns, to acquire SK Wyverns, and sign a memorandum of understanding (MOU) soon. E-Mart plans to hold the board of directors as early as the 26th to confirm the acquisition plan of SK Wyverns.
An official from E-Mart said, “We have been pursuing the acquisition of the baseball team a few years ago,” and “We decided to acquire the SK Wyverns baseball team, which is popular with young people, to strengthen contact points with E-Mart and Shinsegae Group customers.” SK Telecom also said, “We are discussing with Shinsegae Group on the direction of professional baseball development.”
The specific acquisition method and price are unknown. In the market, if Doosan creditors sold the Doosan Bears baseball team, the fair price is estimated to be around 200 billion won.
It is analyzed that E-Mart’s acquisition of SK Wyverns reflects the strong will of Shinsegae Group Vice Chairman Jeong Yong-jin. Vice-Chairman Chung has expressed his will to provide an experience-type space that can only be enjoyed offline even when the central axis of shopping is shifting to online. When this acquisition is completed, attention will be paid to the direction of the stake in the Samsung Lions baseball team held by Shinsegae Group. Shinsegae is the 3rd largest shareholder with a 14.5% stake in Samsung Lions.
SK Group did not disclose the reason for selling the SK Wyverns club. SK Wyverns is 100% owned by SK Telecom, but the owner is Choi Chang-won, a cousin of SK Group Chairman and SK Discovery Vice Chairman Choi Chang-won.
SK Wyverns has established itself as a strong team in the league by advancing to the postseason 12 times and winning the Korean Series 4 times. SK Wyverns did not stand out in terms of profits, crossing the break-even point every year.
E-mart’all-line strategy’ speed
Shinsegae Vice Chairman Jeong Yong-jin (photo) used to emphasize “Expand the area of distribution” for years. In 2015, in a special lecture for executives and employees, he ordered’Transformation to Break the Frame’ and said, “Competitors of Shinsegae Group are not only companies such as food, clothing, and home appliances, but also baseball fields and amusement parks that attract our potential customers on weekends.” . In this year’s New Year’s speech, a sense of crisis was created by saying, “A company that does not obsess over customer’s changed demands is bound to be eliminated.” E-Mart’s acquisition of SK Wyverns is interpreted as a strategy to cope with the all-round commerce competition across industry boundaries.
E-Mart expands marketing
The business community sees E-Mart’s acquisition as part of an’all-line’ strategy that combines offline and online channels. In particular, SSG.com decided to take over the baseball team to strengthen online distribution. An official from E-Mart predicted, “Young baseball fans are generally active on social media as well.” “If we allow them to experience the various experiential elements of E-Mart at the baseball field, the synergy effect will be significant.”
Some say that this year is the right time to take over the baseball team. If the novel coronavirus infection (Corona 19) is alleviated, it is expected that millions of spectators will return to the baseball field. In 2017, the annual number of professional baseball spectators reached 8.4 million. In 2019, there were 7.29 million. Last year, it plunged to the 330,000 level due to an unattended game. An official from a major sports team predicted, “Considering the brand power of E-Mart as well as Jeong Yong-jin, it will lead to an increase in the number of spectators in terms of popularity of professional baseball. The addition of’Taekjin hyung’ to’Yongjin hyung’ is expected to contribute to the development of domestic professional baseball.
Vice-Chairman Chung is known to be focusing on’digital marketing’ recently. It is famous for being a business person who manages his own account on Facebook and Instagram, and communicates with the public without notice.
Distribution is during the platform war
In the distribution industry, it is interpreted that E-Mart’s decision is not irrelevant to the fact that the distribution industry is evolving into a platform war. It is said that it is difficult to survive without expanding the scope of existing distribution such as hypermarkets, department stores, and convenience stores and expanding the contact point with consumers. Coupang alone surpassed 22 trillion won last year with fast delivery as a weapon. This is a scale that far exceeded E-Mart’s total sales last year (based on a separate basis) of 15 trillion won. Naver Shopping and Kakao Commerce are raging in the e-commerce (e-commerce) market with powerful platforms such as search and chat, respectively.
The emergence of’fan platform’ can be interpreted in the same context. On the 15th, NCsoft announced that it will launch’Universe’, an app that distributes K-pop content, early next year. In the industry, there is even the end that the fan platform will be able to become a strong competitor to the existing distribution industry by attaching the’commerce’ function to content distribution. It is for this reason that Naver is eager to secure Hallyu content by alliing with SM Entertainment after entering shopping.
Meanwhile, regarding the sale of the SK Group’s baseball team, there are interpretations that SK is taking steps to organize the entire sports team. Aside from the handball, which Chairman Tae-won Choi is the chairman of the association, baseball and basketball teams can be sold sequentially.
Reporter Park Donghui/Kyungmin Kang/Junho Cha [email protected]