Investment Firm Purchases Hyundai Unicorns

The choice of the Korea Baseball Organization (KBO) was not a conglomerate but a startup investment company. The baseball governing body held a ceremony yesterday to mark the establishment of the 8th baseball team after concluding a contract with Centennial Investment in southern Seoul.

With this deal, the Seattle-based investment firm has become the new owner of the Hyundai Unicorns. The KBO has been trying to negotiate with a number of other baseball teams over the takeover deal but failed. The Hyundai Unicorns has been mired in financial difficulty since early last year and was on the verge of disbandment.

KBO commissioner Shin Sang-woo announced early Wednesday that the investment firm would take over the four-time league champion. The firm agreed to pay 12 billion won (about $12.5 million) as an admission fee to move the team to Seoul and to use Mokdong Baseball Stadium as its ballpark.

Centennial Investment will keep the Unicorns` former coaching staff and players, but plans to finance its team by using the largest sponsor’s name as its team name, also known as naming marketing. Under the plan, the main sponsor who provides 9 to 12 billion won a year will have its name displayed on players’ uniforms, and small-scale sponsors providing 0.5 to 1 billion won can use its corporate logo on the team’s helmets.

However, the company is going to seek multiple year contracts with its sponsor to prevent the team’s name from changing frequently.

Lee Jang-seok, the CEO of Centennial Investment, said, “We will create a new business model of the sports industry. We have secured three to four would-be sponsors and I am confident to yield surplus by differentiating management with the existing team.” The name of the new baseball team will be decided in March.

The investment company appointed Park Roh-joon, an SBS commentator and KBO committee member, as its new CEO of the team. Park said, “I am considering three plans. One is to have the current coaches including Kim Shi-jin remain in their posts. Number two is to strengthen the team play by introducing veteran coaches from outside. The last is to change the entire staff members.”

The KBO established a security measure for smooth operation of the new team. “The memorandum with Centennial includes new clauses such as banning the sell-off of the team for the next five years and having prior a consultation with the KBO when trading players.” said KBO Director-General Ha Il-seong.

Existing baseball teams welcomed maintaining the eight-team system, but raised a question over whether the investment firm would take responsibility for faithfully maintaining the team.

LG Twins President Kim Young-soo expressed concerns, saying, “It is desirable for the investment firm to attempt to bring about changes to the pro-baseball league. However, it remains to be seen if it could run the team smoothly only with sponsors.