By Zach Arnold | January 13, 2007
By Zach Arnold
For a wild rumor, it’s certainly taken on a life of its own on the Internet this week. UFC buying PRIDE. It sounds like every UFC fanboy’s greatest dream and every PRIDE fanboy’s worst nightmare. So, let’s splash some cold water on the rumor. I’ll give you five reasons UFC won’t (and shouldn’t) buy PRIDE.
Hint: Let’s start with the issue of potential criminal implications.
- UFC purchasing PRIDE could bring a bright spotlight from both American (FBI) and Japanese (Tokyo Metropolitan Police & Kanagawa Police) authorities. This is a strong and sobering statement to make, but it is applicable given what has been publicly stated and reported. If, as written, it is believed that PRIDE’s real/virtual owner Mr. I (Ishizaka aka Kim Dok-Soo) is the man behind PRIDE, selling PRIDE to UFC would create some controversy. As noted before by Shukan Gendai, Mr. I (Ishizaka) is still in hiding. The Kanagawa Police received their complaint from admitted yakuza-fixer Seiya Kawamata about his claims of yakuza threats (which he alleges involved Mr. I’s support) and have been reportedly trying to search for Mr. I, but they have not seen him in Japan. Several months ago, Gendai stated that the belief was that he was hiding in South Korea.
If UFC was to make a purchase of PRIDE and Mr. I is the owner of the company, this would give police (whether it’s the FBI or Japanese authorities) a way to trace where the money is going to Mr. I (and could lead to his potential arrest and/or detention for questioning). If an arrest or police action was a result of such a purchase, this news would be fodder for critics and media-types looking to pounce on UFC and taint their image by associating UFC with someone allegedly from the underworld.
The biggest question in regards to any substantiation of rumors about PRIDE trying to sell to UFC would be this… who would be behind it? Sakakibara trying to cash out before his days are numbered? Ken Imai, who is trying to figure out what to do now that Mirko Cro Cop has left Japan and is in UFC? The politics are very complicated and potentially dirty.
- The fight market in Japan is collapsing inch by inch on a monthly basis. Without television, NOAH and K-1 would not be in the positions they are politically in right now. Outside of those two organizations, the bottom has completely fallen off for major-level fighting in Japan. The fight fans didn’t go away, but the business savvy and TV support sure has. While Japan is still potentially a good spot for a quick cash-in on the worldwide MMA market scale, it is no longer the be-all, end-all market to do business in. The politics, along with the issues of organized crime, make Japan a difficult place for a foreign company to do business in (especially in the fight world). In order for UFC to do anything substantial on the ground in Japan, it would have be operated by K-1 management. Otherwise, UFC attempting to do business on their own or simply with a TV network in Japan would be disastrous (PRIDE brand, UFC brand, or whatever brand of show they wanted to promote there). The salad days of Japan’s riches are fading away pretty quickly.
- Owning another separate company would stretch resources and potentially hurt UFC in the long-run. If UFC was to create a Japanese company or buy PRIDE out, it would require them to keep massive amounts of overhead in terms of staffing and resources to have an effective ground campaign in Japan. Japan is still one of, if not the most, expensive places in the world to do business. If it is currently costing PRIDE anywhere from $2-3 million USD a year in just administrative overhead (not counting other business expenditures), UFC could find themselves financing a money pit and losing a ton of cash quickly. When business goes bad in Japan, it goes bad in a big way. In addition, UFC would have to allow their Japanese subsidiary to have a Japanese face as the main image of the company. Dana White cannot be the main marketing image in Japan. Such a Japanese product presented by UFC would have to be presented with Japanese flavor, as opposed to the Vince McMahon way to doing business (which is shove your style of product down people’s throats and do business on your own terms).
If UFC decided to buy the PRIDE name, they would be purchasing damaged goods. The PRIDE name value is tarnished right now in Japan due to Shukan Gendai’s negative campaign. In addition, the TV networks would not do business with UFC under the PRIDE name because of its connotation. UFC would have to do business in Japan under a different name and different management. Therefore, what is the point of buying PRIDE rather than just creating your own subsidiary company in Tokyo? The logical answer is that there is no business point in UFC buying PRIDE other than for egotistical reasons.
- PRIDE’s VTR (video tape) library has very limited value in the American marketplace. Fox Sports Net has been airing a ton of old PRIDE footage for the past couple of years. What has the result been? Very little name recognition for many of the PRIDE fighters in the American marketplace. The PRIDE footage is only valuable if UFC itself decides to market who they want and when they want to. Otherwise, the stock footage itself has little value (so much so that the best PRIDE has been able to do with it in terms of cashing on via ancilliary means is to do video-on-demand through DMM.com). There was not a large reaction to the name droppings of Mirko Cro Cop, Quinton Jackson, or Vanderlei Silva to the UFC audience.
- There is little value left in buying PRIDE simply for fighter contracts. UFC is the company right now with the financial resources to buy who they want, when they want as far as talent is concerned. If they want to pay Josh Barnett $200,000 USD a fight, they will pay him that directly. They do not need to spend millions of USD on buying PRIDE in order to get Josh Barnett to sign a contract with them to fight in America. The majority of fighters left under contract in PRIDE are not popular with the casual American fight audience. No one is screaming or clamoring to see Antonio Rodrigo Nogueira in America (on a wide fan scale) any time soon. Unlike the WFA contracts with Quinton Jackson and Heath Herring, the PRIDE contracts make little financial or marketing sense to purchase.