Tony Grotjan
Mr. Reuter
Economics
10 February 2015
The Economics of Ping Pong
It isn’t a secret that professional athletes like the ones in the NFL, MLB, and NBA make a ridiculous amount of money here and America. The talents of players such as Aaron Rodgers, Giancarlo Stanton, and Kobe Bryant hardly go unrewarded. Players such as these make more money in a single game than many Americans make in an entire year. The demand for players with the necessary skills to excel in professional sports is extremely high, and the supply is scarce. This is all common knowledge, but what about other sports markets? Markets here and around the world are radically different. From examining differences in these markets, we can learn how one man’s trash is another man’s treasure, and the importance of selling goods and services on the proper platform.
Most of you reading this have probably never heard of YiYong Fan, a man who recently was the American champion of the sport he played. Why has nobody heard of him? Because he plays Ping Pong. And nobody, unfortunately, in this country cares about Ping Pong. Yong, as he is called, was born in China, where Ping Pong is highly valued like football is here. At the age of 16, he was the Junior Champion of China, but there is such a high supply of talented players in China that there is a maximum age to play on the national team. Once Yong passed that age, he could no longer compete in the Olympics for China and moved to America, where he easily became the champion.
Because of the low value of Ping Pong in the American sports market, Yong wasn’t even able to make enough money to sustain himself as a professional athlete. This is outrageous considering amount of money other professional athletes of comparable status make. In many countries around the world, the Ping Pong champion is considered a national hero. This can only be explained through economic principals.
Imagine two restaurants, a barbeque place in Dallas, and a seafood place in Boston. There are a multitude of other barbeque restaurants in Dallas, as well as a multitude of other seafood restaurants in Boston. The competition for these restaurants is much higher in their current respective cities, but the values of these restaurant types in their cities are also much higher. Our hypothetical seafood restaurant makes great food, but it is only the tenth best in its category in Boston, so it moves to Dallas where it is the top in the area. Unfortunately for them, the people in Dallas don’t value seafood enough to ever eat there instead of barbeque, so this restaurant goes out of business.
This is Yong’s story. He started in a highly competitive Chinese Ping Pong market, and was fairly successful, but the competition increased so he moved to the less competitive, and less valued American market. While he rose to the top amongst a lower supply, the demand was just too low, and poor Yong was unable to sell his services and make enough profit. Fortunately, he was able to make a living coaching , so the story isn’t completely tragic.
- "Golden Dragon Table Tennis Campus (Phase II)." Golden Dragon. Web. 9 Feb. 2015. <http://www.dragonrus.com/golden-dragon-table-tennis-campus-phase-ii/>.
- "Table Tennis Champ Is out to Make Success of New Training Center."Seattlepi.com. Web. 9 Feb. 2015. <http://www.seattlepi.com/lifestyle/article/Table-tennis-champ-is-out-to-make-success-of-new-1173990.php>.
- "Yiyong Fan vs Yahao Zhang Men's RR Group A." YouTube. YouTube. Web. 9 Feb. 2015. <https://www.youtube.com/watch?v=KlG80uXQPzE>.
Other professional sports bring in the constant revenue to be paying players millions of dollars. The New York Yankee's are worth just short of 2 billion dollars so they can pay players the big money. Ping pong, at least here in the United States does not have the kind of money involved like other sports like baseball, football, basketball. If there was a bigger audience, I'm sure there would be more money involved. The day that a ping pong player makes 325 million over 12 years is the day i start playing ping pong.
ReplyDeleteTony, relating economics to professional athletics was a great idea, and I found it surprising that this topic isn't nearly as common as others. You had a great analysis, and the restaurant analogy can easily clarify the situation for someone unfamiliar with sports. I, too, find that certain sports go unappreciated, and am glad that you were able to make your opinion known, and to do so in a manner that relates to what we are learning in class makes it even better. I thoroughly enjoyed reading this post, and I think it would be beneficial to see a comparison between income among ping pong players by what country they play in.
ReplyDeleteSeems like what you said about no one in America caring about pro Ping Pong is true, because I didn't know this was even a thing! It's interesting to see how you put a sport into economic terms without it actually being relevant to a countries economy. It goes to show that economics can play into everyday occurrences and not just finances; it can be used to describe someones career. Perhaps bringing in some more information about the sport as it's valued in China and whether or not it would have been financially better for Yong to continue to play there or come to American would shed some light on just how much of a profit (or lack thereof) he'd be making.
ReplyDeleteI love the analogy that you made between the two restaurants in Dallas and Boston. The idea of going to different parts of the world to turn the competition down a notch seems almost genius in a perfect world. You mentioned that he wasn't able to sustain himself as he came to America due to the low paying situations. Did he then make a decision to get a regular job to be able to help himself? Also is the supply and demand for coaching pin pong enough for him to become a coach and supply himself? Also how much does he charge for each lesson? It would have to be maybe a hundred dollars if not more if he wants to sustain himself while being a ping pong coach.
ReplyDeleteJohn, I'm not sure exactly how much he charges, but I know of a guy who used to coach in Milwaukee that charges $50 dollars for a half an hour lesson. I'm sure the top player in the country would charge more. Coaching is really the only way to make money from Ping Pong in America.
ReplyDeleteI think that professional sports has simply become a marketing and advertising medium. Sports arenas, TV broadcasts, etc. are laden with advertisements and product endorsements. Players all have sponsorships with foods and stuff. It's not about the games anymore, it's about ticket sales, merchandise, and advertising. Ping pong doesn't sell well in America.
ReplyDeleteIt is completely ridiculous how much emphasis is put on the common professional sports anymore. It brings in an outstanding amount of revenue and causes athletes to be very overpaid. Why not put forth some of this money to expanding our horizons and promoting less popular sports and hobbies? With everything from ping pong to bowling, more funding needs to be transferred from the big name sports to these much smaller ones in order to increase their popularity and distribute the revenue more evenly. I completely agree Tony, the demand for smaller sports markets must be increased as it is a completely unfair advantage.
ReplyDelete