(Bloomberg) -- Move over, Taylor Swift. The economic might of baseball star Shohei Ohtani is bringing some big winners, and also some losers to the Japanese corporate world.
Ohtani, known for his rare ability to both pitch and hit at an elite level, surprised the world by reaching the previously almost unimaginable record of 50 home runs and 50 stolen bases in a single season. His popularity this year has created an economic impact in the US and Japan of around ¥87 billion yen ($594 million), according to estimates by emeritus professor Katsuhiro Miyamoto at Kansai University. By way of comparison, Swift’s The Eras Tour is estimated to have brought about $230 million to Japan over four days.
While many companies with ties to Ohtani have benefited from the immense publicity the baseball genius brings, some have suffered from costly ad fees that pressured profits. That carves out opportunities for stock-pickers in the Japanese market, which has been buffeted by huge swings in the yen in recent months.
Here’s a look at the Ohtani Economy:
Dip Corp: Stellar Quarter
One of the top performers among sponsors was dip Corp., which runs a job-seekers site. An ad campaign with Ohtani, including a commercial of the athlete gazing at a row of skyscrapers, brought a flood of publicity to the little-known company and lifted its shares 8.7% since the Major League Baseball season started on March 20. That compares with a 2.4% drop in the Topix.
The firm’s operating profit rose 20% in the first quarter from a year earlier, marking the best performance for that period since the company was founded in 1997. Chief Executive Officer Hideki Tomita said during an earnings call in July that the publicity effect was already greater than the signing fee for Ohtani.
Ads featuring the baseball star have played on the big screen near the Shibuya ‘Scramble’ Crossing, Tokyo’s equivalent of Times Square. On YouTube, one commercial reached 5.7 million views.
Ito En: Ad Fees
One notable loser, at least in the short-term, is Ito En Ltd., a maker of bottled beverages. Ohtani was named a global ambassador in April for its signature green tea Oi Ocha, and advertisement costs surged 20% in the May-July period. This in part dragged down operating profit by 29%, according to Ito En’s investor relations department.
“Consumers aren’t going to be inclined to drink Ito En’s tea just because Ohtani loves it,” said Shoichi Arisawa, an analyst at Iwai Cosmo Securities Co. in Osaka. “It will have an effect in terms of improving Ito En’s corporate image, but the impact on the business performance may be limited.”
Ito En’s shares have fallen 8.6% since the start of the season, more than triple the Topix’s decline. The ad fee is a strategic cost, and the company expects to see a positive impact on US sales in the coming quarters, an investor relations official said.
Hotland: Takoyaki Craze
Ohtani is in the first year of his record $700 million 10-year contract with the Los Angeles Dodgers. This led to some companies making partnerships with the second-most valuable MLB team to expand operations there.
That includes Hotland Co., the owner of takoyaki chain Gindaco, which announced sponsorship of the Dodgers in May and launched a store to sell the much-loved Japanese octopus fritters at its LA baseball park.
Hotland shares surged 22% since the season began.
“Selling at stadiums is a good way to improve brand recognition, or rather, of the Japanese dish itself,” said Iwai Cosmo’s Arisawa. “Their partnership will have some meaningful effect as they make a foray into the US market.”
Asics: Business Refocus
Asics Corp. is winding down its baseball equipment business and will stop selling gloves, bats and other gear in September 2025.
The sporting goods maker parted ways with Ohtani in 2022 after eight years of partnership as the company shifted away from the baseball business. Conversely, the move to cut the costly partnership and focus on cult sneakers has helped Asics, analysts said.
Its shares have rallied a whopping 155% this year.
Kose: China Offset
Japanese cosmetics giant Kose Corp. signed a global partnership with Ohtani in 2022. The surprise move to hire a male athlete for its beauty line allowed the company to broaden its customer base, helping to offset a slump in its stock as the sector was hit by China’s economic downturn.
JAL - Weak Yen
An Ohtani endorsement, whose face is splashed over the fuselage of a Japan Airlines Co. plane, hasn’t been enough to lift the carrier’s shares. Its stock is down 14% since March 20, as rising costs in dollar terms due to the weak yen dragged on earnings.
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