Opinion: Cracking the Japan Code

By Zach Arnold Jul 17, 2014

Are America’s two most imperialistic fight promoters, the Ultimate Fighting Championship and World Wrestling Entertainment, about to finally make a major dent in the Japanese marketplace?

WWE CEO Vince McMahon has always had visions of sugar plums dancing in his head when it comes to his company taking over the Japanese landscape. He worked with two different Japanese promotions on three Tokyo Dome events in 1990 and 1991. Eventually, McMahon renewed his efforts to conquer Japan in 2003 by running shows at Yokohama Arena. More than a decade later, McMahon is staging annual events in Japan and now has signed one of the country’s top professional wrestlers: Kenta Kobayashi. According to Wrestling Observer Newsletter Editor Dave Meltzer, the WWE hopes KENTA can become a player for the company so it can sell a lot of subscriptions to its online WWE Network platform.

UFC President Dana White, meanwhile, continues to work with Japanese ad agency Dentsu on running annual fighting events at Saitama Super Arena. There will be a UFC Fight Night event on Sept. 20 featuring Roy Nelson against Mark Hunt along with Rin Nakai and her princess dress against Miesha Tate. Given the UFC’s inability to score a major broadcast television deal in the country, it is just as important for the organization to land Japanese subscribers for UFC Fight Pass as it is for World Wrestling Entertainment to score subscribers for the WWE Network. If you listened to the recent Sherdog Rewind show with Jack Encarnacao interviewing Meltzer on the latest business trends in MMA, you fully understand and appreciate that there is an ongoing rat race of sorts between the UFC and the WWE.

Part of that rat race involves the Japanese market as a flashpoint. For so many years, the Japanese scene was impossible to penetrate, and the market still isn’t willing to embrace a foreign company as a number one promotion. You need significant network television backing, like UFC has with Fox, to make an impact. Plus, organized crime had long been a major financial backbone for various events in Japan. However, the situation has changed. Anti-yakuza laws on the book have made it more of a challenge for the gangs to make money, so their efforts are focused less on industries like professional wrestling and MMA. Organized crime used to embrace combat sports in Japan as a recruiting tool and an outlet to gamble on fights. With the black money drying up, you don’t see as many major events in the country. Plus, there has been pressure applied by the various police agencies on network television outlets to not do business with shady characters.

As the old axiom goes, nature abhors a vacuum; and there has been a substantial vacuum in the Japanese marketplace since Pride Fighting Championships closed its doors. There isn’t a major Japanese MMA promoter, and there’s only one major pro-wrestling promotion in the country: New Japan Pro-Wrestling. Pride was built on pro-wrestling’s star power, and those days are long gone in Japan. If there ever was a time a foreign power was going to finally get a foot in the door in Japan, it’s now. The UFC and the WWE know this. As long as they compromise somewhat on the way they do business, they can attract business partners.

The UFC appears ready to make some slight compromises if it means spreading its message in Japan. We saw the press conference with White in late June where he revealed the UFC would be working with Shooto (Vale Tudo Japan) on a two-tournament, round-robin format reality show. The UFC playbook has always been to use “The Ultimate Fighter” format in a country. This time around, it will take a substantial risk by taping 30 episodes of a reality double tournament series in which fighters will have to participate in seven fights to win a UFC contract. Plus, there’s no crazy frat house where guys are getting drunk or smashing doors or applying questionable substances on each other. The tournaments will feature bantamweights and featherweights. Even with White’s recent comments that fighters in the smaller weight classes draw less than their heavier counterparts, he can use all the star power he can get right now to promote UFC shows. Making Japanese stars is critical. No one else is doing it, so he has to.

There are some major risks involved in having fighters competing in seven different fights. There’s no athletic commission in Japan, meaning the UFC will in essence be acting as its own regulatory body, along with Shooto. Injuries can and will happen. The toll of cutting weight for seven fights in a short time span sounds like an absolutely unhealthy and brutal proposition, not to mention how unsafe it will be for fighters to be so active if they suffer head trauma. Will there be alternates? Will the tournament get derailed like Showtime’s Super Six boxing format? Going with a round-robin tournament is a very intriguing and very Japanese idea, but it comes with a substantial amount of risk.

A critical component to this new reality show is the promise that Dentsu will be able to get the reality series on national broadcast television. For previous UFC events, the Japanese cable partner has been WOWOW and its one network TV partner has been TV-Tokyo. TV-Tokyo is the smallest of the major networks, and past UFC shows have aired at 4 a.m. The UFC Fight Night “Hunt vs. Nelson” event will air on WOWOW. It seems likely that TV-Tokyo will be the UFC’s network partner for the double tournament reality series.

When the announcement of a new Japanese reality show was made, many people scoffed at the UFC’s chance of succeeding; and the odds are certainly against it. However, what does it have to lose at this point? No one else is making stars in Japanese MMA with mass appeal. It was only a decade ago that the Japanese MMA scene was flush with cash and generating monster profits.

For a foreign power like the UFC to succeed, it is going to have to carefully and meticulously navigate the waters. The UFC is not a Japanese company, so running a heavy schedule in Japan will not work. The next best thing is trying to export its television product into Japan like Major League Baseball has done. The key factor in MLB’s success is the fact that many teams have paid dearly to bring in top Japanese pitchers through the posting system. For the UFC to emulate MLB’s success, it will have to find a way to construct a television platform on which to make its own Japanese stars and then hope those stars can succeed on UFC cards and become champions. It’s a tall order but not entirely impossible to accomplish. The WWE is looking to do the same with KENTA, as is Top Rank Boxing with 2012 Olympic gold medalist Ryota Murata.

The market is wide open for someone -- anyone -- to succeed in Japan because no native promoters have managed to fill the vacuum since Pride’s demise. Someone has to succeed, and the UFC thinks it may have a shot here to pull off the unthinkable. If it’s going to accomplish this dream, it’s now or never; and there will be plenty of foreign promoters challenging it along the way.


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