[비즈한국] NCSoft036570 (NC) recorded its worst-ever financial results last year, with 1.5781 trillion KRW in revenue and an operating loss of 109.2 billion KRW. This is the first time since its listing in 2003 that NC has posted an annual operating loss. Some NC shareholders are criticizing the operation of the professional baseball team 'NC Dinos.' This is because, while NC pours tens of billions of won into the NC Dinos every year, the team's actual performance remains underwhelming.
The founding of the NC Dinos was led by NC CEO Kim Taek-jin. At the team's founding approval ceremony in 2011, CEO Kim said, "I grew to love baseball while watching the baseball manga 'Star of the Giants,'" and added, "I decided to establish the team after feeling how much inspiration baseball can provide." However, there were significant voices of opposition even then, based on the view that professional baseball was merely a personal interest of the CEO and would not contribute to the company's performance.
On the surface, the NC Dinos' performance does not look bad. According to audit reports, the NC Dinos recorded 58.8 billion KRW in revenue and 3.8 billion KRW in operating profit in 2022, and 55.1 billion KRW in revenue and 5 billion KRW in operating profit in 2023. While the 2024 results for the NC Dinos have not been disclosed yet, it is reported that they remained profitable.
Behind these results, however, lies NC's financial support. In 2022 and 2023, the NC Dinos generated 32.5 billion KRW and 24.9 billion KRW in revenue from NC, respectively. Nearly half of their revenue came from NC, mostly in the form of advertising. Analysts suggest that while it is labeled as advertising, it is effectively equivalent to NC providing tens of billions of won in subsidies to the NC Dinos.
NC CEO Park Byung-moo stated in March last year that they "plan to significantly reduce management support for the NC Dinos." According to quarterly reports, NC paid 14 billion KRW to the NC Dinos under the guise of advertising and promotion fees in the first three quarters of last year. However, NC's advertising payments to the team are concentrated in the first and fourth quarters. In 2023, NC paid only 1.2 billion KRW each to the NC Dinos in the second and third quarters.
The business world is keeping a close eye on the scale of NC's support for the team this year. NC is striving to improve its performance through various avenues. However, securities firms expect NC to post an operating loss again this year. Kim Dong-woo, an analyst at Kyobo Securities, stated regarding NC, "With the delay of new releases such as 'TACTAN,' there is a lack of momentum to drive revenue growth in the first half of the year," and added, "The highly anticipated 'AION 2' is scheduled for release in the fourth quarter of this year, and most of its impact is expected to be reflected in 2026." Lim Hee-seok, an analyst at Mirae Asset Securities, pointed out, "While the three main cash cow mobile games (Lineage M, Lineage 2M, and Lineage W) are continuing to stabilize at a lower level, there is a lack of new releases expected to generate significant revenue."
If NC continues to provide tens of billions of won to the NC Dinos this year, it will inevitably have a negative impact on their financial results. It could also affect the morale of NC employees. NC carried out large-scale voluntary retirement last year. During a conference call on February 12, NC reported, "About 1,000 employees were transferred to subsidiaries last year, and about 800 to 900 people left the company through voluntary retirement and other means." In such a situation, providing tens of billions of won to the NC Dinos, which is not performing well financially, is not welcome news for NC employees.
It is not easy for NC to stop supporting the NC Dinos either. Realistically, it is difficult to cover the club's operating expenses solely through ticket sales and merchandise. Furthermore, the NC Dinos' home city of Changwon has a smaller population compared to other cities with professional baseball teams. According to the Korea Baseball Organization (KBO), the NC Dinos' attendance last year was 749,058, the lowest among the 10 professional baseball teams. The team with the highest attendance last year was the LG Twins, which attracted 1,397,499 spectators—nearly double that of the NC Dinos.
Not all outlooks are pessimistic. The NC Dinos are seeing an upward trend in attendance, and their dependence on the parent company is relatively low compared to others. As the popularity of professional baseball continues to rise, the resulting marketing effects cannot be ignored.
Some in the business world have been circulating rumors of an NC Dinos sale for several years. Each time, NC has denied any plans to sell. Even if NC were to pursue a sale of the NC Dinos, the process is unlikely to be easy. Most companies interested in professional baseball prefer teams located in the metropolitan area. The NC Dinos are evaluated as relatively less attractive in that regard. NC has not issued any specific position regarding the NC Dinos.