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The chicken & the egg: UFC’s Japanese TV deal with WOWOW was never going to work

By Zach Arnold | April 6, 2016

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What do you get when you pair:

You get the UFC marriage with WOWOW in Japan. It was destined for failure from the start.

IT Media/Business Online in Japan confirmed on Thursday morning local time the end of the UFC/WOWOW television marriage. With no major Japanese stars, there simply wasn’t a financial interest for WOWOW to continue doing business. Why pay a premium for a sports product behind a TV pay wall with no real ties to Japan?

This is less about UFC failing in the Japanese marketplace as it is simply a matter of fact that this was a business relationship that was never going to succeed. UFC was the antithesis of PRIDE. They bought the PRIDE assets out and found out the hard way how hostile the lay of the land was for doing business in Japan. UFC partnered up with Dentsu for a reported sold-show deal that is still on-going but has not really gone anywhere in terms of business growth. At this point in time, UFC’s once-a-year Japanese event is simply perfunctory. UFC was hot for one Saitama Super Arena event… and then it went flat.

Combat sports, more than traditional sports, is entirely built on a cultural & emotional connection. UFC’s marketing of their product was often built on reason and logic. We’re the best fighters in the world. We beat PRIDE. The cage is safer than the ring. Come and watch us. It was a rational argument. Rational arguments in combat sports never work. Tribal identity & analogies always trump reason & logic on the persuasion scale. Japan, more than any other major sports economy, is built on the staying power of nationalism. The UFC was not a Japanese company and was not a company with Japanese stars.

With the WOWOW TV deal behind them, look for UFC to strike a deal with an entity like Softbank which would allow for some sort of streaming/multimedia video play. In the long run, it will make more business sense for UFC and be a better fit. WOWOW was not a natural fit for UFC. The pay TV channel has a real history in investing cash into combat sports but not succeeding.

SWS & RINGS were precursors as to what was about to happen with UFC. Companies stuck behind a TV pay wall with mostly foreign draws do not last in the Japanese marketplace. Airing UFC events on WOWOW was the equivalent of Fox Sports 1 airing UEFA Champions League games. Looks great on paper, has some prestige, but it’s not going to build up your network to the masses. Impresses a few people but not the general fan you need for ratings.

It is very interesting to compare & contrast the Japanese strategies between UFC & WWE. WWE has been raiding talent from Japan in order to build up their WWE Network and the J-Sky Sports RAW broadcasts. With names like Shinsuke Nakamura & Kota Ibushi, they have a chance. They’d have a better chance if their track record of matchmaking Japanese wrestlers wasn’t so damn awful, but maybe that will change. Unlikely, but never say never. WWE benefits from the success of New Japan Pro-Wrestling. UFC has no such partner or rival in Japan. The ceiling for greatness has and always will be higher for UFC than WWE but they have no desire to alter their identity or their product to fit the emotional & identity plays needed to work in Japan.

The whole combat sports scene in Japan has greatly changed since the government has cracked down on the yakuza with banking laws. The gangs are still active and shifting their money into the financial sector. It’s not just foreign golf courses & Panama Papers offshore accounts. More money into “legitimate businesses.” It doesn’t mask that the numbers are starting to dwindle but the gangs are still powerful. Without gang money, combat sports has greatly suffered in Japan. You can’t promote a con without a con man’s money. When the con man distributed your tickets through extortion, took “rent” money to funnel into production dummy companies, demanded protection money to prevent rival gangs from turf invasions at events, placed bets on fights, and “sponsored” your nights out after matches, life was good. The cost of doing business. It was even better when broadcast TV networks were also paying some of the bills.

The business climate has changed now. It’s hard enough for a Japanese combat sports entity to consistently make a profit and it’s even more challenging for a foreign entity to do so as well.

Topics: Japan, MMA, Media, PRIDE, UFC, Zach Arnold | No Comments » | Permalink | Trackback |

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