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SEP 21, 2016

Giving Back: Bill Gates, Andrew Carnegie, and Basketball

By Yoshito Hori

Nineteenth-century steel magnate Andrew Carnegie’s first act of charity was to build a swimming pool in Dumfermline, his Scottish birthplace. He was 43 years old.

Bill Gates was 45 when he established the Bill and Melinda Gates Foundation. While addressing big global challenges, Gates’s foundation also maintains a geographic focus on the US Pacific Northwestーhis home region.

Giving back is something most people only get around to in middle age. But even philanthropists who operate on a grand scale keep a place in their hearts for their hometowns.

Not long ago, I began exploring ways to give something back to my hometown of Mito, a city of several hundred thousand people, located seventy miles northeast of Tokyo.

It all started in August 2015 when I went back for a high school swim team reunion. It was my first time to attend in thirty-five years.

Unfortunately, the pleasure I got from seeing my old swim buddies was offset by my shock at the state of the city. Mito’s once bustling town center of department stores, clothing shops, and restaurants was a miserable parade of shuttered shops, derelict buildings, and vacant lots.

What was behind this transformation?

As it turned out, not the deindustrialization that hit Detroit, but basic changes in lifestyle. As car ownership rose, more people moved to the suburbs, and suburbanites tend to shop and eat at places with easy parking.

The result? A hollowed-out city center.

Mito’s decline made me angry, but I also felt somehow responsible. Since leaving decades earlier to live in Kyoto, Boston, and then Tokyo, I’d seldom gone back to the city and now contributed nothing to it.

Mito is the capital of Ibaraki Prefecture. If Mito looks shabby and rundown, it reflects badly on the prefecture as a whole. I went to see the city mayor and, after some discussion, we—together with around 50 other people—initiated the Downtown Mito Revival Project.

At one of the gatherings of this group, I bumped into the owner of the local basketball team, the Ibaraki Robots.

The team was, if you’ll excuse the pun, a complete basket case. Rescued from bankruptcy in 2014, the Robots finished at the bottom of the league the following season, playing to an average crowd of just eight hundred.

So what did I do?

I bought the team.

Or rather, a 50% share in it. A successful sports franchise can contribute in a big way to urban renewal both psychologically and economically. It can boost civic pride and attract crowds to the downtown area.

For all the Robots’ disastrous track record, there was some hope. Basketball has the second-biggest player population of any sport in Japan after baseball. At the local level, Ibaraki Prefecture, as home to Japan’s high school and university champion teams, has a rich talent base. And Mito was currently constructing a new 5,000-seat sports arena.

The only way was up!

Or so I naively thought until I went to watch the Robots play. Every game I attended, my team was thrashed.

Of course, winning victories on the court was the coach’s responsibility, not mine. As team owner, I’m involved with the business side of things.

Sometimes, though, there is overlap. Our players’ salaries, for example, were by far the league’s lowest. As a result, existing players had low motivation, and promising players had zero incentive to join our team.

To improve motivation, I committed to raising all the players’ salaries by 50% annually for the foreseeable future. The plan was to increase revenue from ticket sales, merchandising, and sponsorship to cover the rising wage bill. The plan was to set up a positive revenue/motivation feedback loop!

This year has seen “hopeless” teams from smaller cities like Leicester (soccer) and the Cleveland Cavaliers (basketball) crowned champions. But in Japanese basketball, the last championship was fought between Japan’s No. 1 city, Tokyo, and its No. 2 city, Yokohama.

Mito is of a similar size to Cleveland and Leicester, so I’m hoping that the Robots will pull off a similar upset, win the championship, and become an inspiration for Mito as it embarks on the road to economic renewal.