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A generation after PRIDE’s death, Japan remains the elusive golden goose of MMA

By Zach Arnold | September 29, 2020

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There is a new generation of Japanese fighters and fans who never watched PRIDE or know who MMA legends like Quinton “Rampage” Jackson are.

My personal and professional life was defined by the rise and fall of PRIDE. I can’t tell my own story without telling the story of PRIDE. Read Lee Daly’s book on the history of PRIDE.

The ghost of PRIDE (and K-1) fading into oblivion is a cautionary tale of how fast things can change. Was the whole scene a giant mirage? Were these promotions once-in-a-lifetime anomalies?

Top combat sports business manager Shu Hirata (On The Road MMA management) recently wrote an article series reminding all of us that not a lot has changed in Japan and, in many respects, business pratices remain as restrictive as ever.

Japan is still the dream prize

You can’t tell the story of Mixed Martial Arts without discussing the parallel evolution periods in Japan and America. There is too much history in Japan to dismiss the market as a one-hit wonder. It’s Japan.

A realistic assessment of the current combat sports scene is that Japan, Germany, and Texas are the golden gooses that have never been fully cultivated.

China is a different story. UFC and One are in an arms race to win over the mainland. UFC has their $13 million USD Performance Institute in Shanghai and recently signed a deal to train athletes with the Chinese Olympic team. UFC also has Strawweight women’s champion Zhang Weili. One has Hawaiian-Singaporean Angela Lee and backing from the Singaporean government.

Everyone’s gamble on China, rather than reigniting what once existed in Japan, is an interesting business decision.

What the Japanese want

The business formula for success in the Japanese combat sports space remains remarkably the same as it was a generation ago.

  1. A ring, not a cage. The cage is safer for fighters but it is not palatable for societal tastes. The ring is also better for the arena and wide camera views by the broadcast television networks. Sponsors don’t like the cage and neither does the general population. It makes the fighters look like animals.
  2. Broadcasting TV networks want matchmaking influence. They want a focus on Japanese talent put in positions of winning fights. There is a reason UFC and WWE have failed to consistently make it big in the world’s third biggest economy. You won’t get a broadcast television deal if you’re not booking a Japanese product.
  3. Ditch the tattoos. In 2005, you would have been asked to wear a tattoo sleeve so you weren’t viewed as a gang member. This attitude has softened somewhat in 2020 but still remains a cultural bug-a-boo.
  4. Japanese management, Japanese presentation, Japanese values. A company perceived as “foreign” won’t sell long-term. A company whose leader doesn’t act Japanese isn’t going to play well. It never has and it never will. It’s debatable what is a worse stigma: public yakuza association or a stereotypical foreigner?
  5. Japan is to Asia as New York is to America. If you make it in Japan, you can export your product overseas to the rest of Asia, Europe, and America. Trying to build a product outside of Japan and then introducing it into the Japanese marketplace is a fool’s errand.

These are the rules. The rules really haven’t dramatically changed since the era of Reconstruction in post-World War II Japan. So why is Japan on the sidelines while the rest of the world is showing growth in Mixed Martial Arts?

Nobody wants to play by the rules

Top international MMA manager Shu Hirata recently wrote an article series detailing the challenges facing fighters in an industry where it’s UFC and then basically everyone else.

Many of the challenges are often self-inflicted wounds. Mr. Hirata’s message? In order for Japanese athletes to succeed in Mixed Martial Arts and other combat sports, they must adapt to the real climate of contract business. Fighters have a right to speak up and challenge the proposed terms of negotiation but in order to get to that stage, fighters also have to act in the right manner and stop screwing up when it comes to unethical behavior.

Managers vs. talent agencies

It has been long-standing practice for many young Japanese athletes to sign with entertainment talent agencies rather than hiring their own manager, which also entails hiring trainers, attorneys, and accountants. Young talent is often overwhelmed and not fully prepared with real-life experience to handle their own business decisions. So, those choices are often outsourced to talent agencies.

Many entertainment talent agencies are notoriously predatory.

These talent agencies allegedly use a tactic of putting potential clients on the spot. They may bring their own in-house attorney and request the young fighter to sign the contract immediately. The fighter often doesn’t have their own legal representation present. The attitude that ultimately prevails in Japanese culture is signing a contract without fully reading it, with the expectation that everyone will come back at some point and renegotiate. The contract is just a formality.

Meanwhile, the talent agencies are reportedly loading the contracts with explosive options clauses.

For example, some talent agencies in Japan insert automatic extender clauses. Let’s say a contract is set to expire at the end of a calendar year. The contract may contain an clause that states that if the talent does not give notice of termination before August 31st, the contract will automatically be extended after the end of the calendar year. Fighters preparing to terminate the contract either are unaware of the clause or forget about it, don’t provide notice, and then find themselves legally stuck in a fight they can’t win with the entertainment agency.

How about a talent’s individual rights? The majority of talent agencies may require their talent to sign away not only the rights to a ring name but also the rights to their own personal name for the duration of the agreement or in perpetuity. This business practice resembles something you might see in WWE.

What about fees? Japanese talent agencies can charge very large deductions from talent salary in the name of promotion — advertising, booking, training, clothing, feeding, TV commercial filming. You name the expense, the talent agency can deduct money from their clients. The process is not always transparent. Talent is often not in a position to go to war, either in a courtroom or outside a courtroom, with the agency. They’re at the mercy of the operation.

For example: UFC offers fighters an insurance policy to cover training-related injuries. The deductible is $1,500 USD. There is no such training insurance in Japan. You can’t get it. The insurance companies there simply will not underwrite athletes participating in MMA training because it is legally considered ultrahazardous and no one is going to underwrite a policy. Additionally, when a fighter gets injured in Japan, they are at the mercy of the event promoter when it comes to whether or not a medical bill is paid for. This isn’t fully guaranteed. If the promoter can’t protect a fighter, then it’s up to the talent to trust the agency they’ve contracted with to take care of them.

But who knows?

In America, we often talk about the lack of quality fighter representation and pontificate on what mega agencies might be able to change once they get into the negotiation space with a UFC or Bellator. What Mr. Hirata questions is the conventional Japanese wisdom of talent signing with entertainment agencies that often have their own power sourcing and own agenda.

The passive-aggressive screwing-each-other approach

The conditions created by many young Japanese athletes signing away all of their rights to entertainment talent agencies makes it very difficult to maintain a consistent business relationship.

The end result is that both sides start screwing with each other, which often results in business deals that die or unfulfilled promises with constant threats to make good on what wasn’t delivered.

What happens when those talent agencies negotiate with fight promoters? As Mr. Hirata recently noted, these agencies call all the shots. They tell the fighter where they are going to fight. The fighter doesn’t have any voice in the decision making process.

If past is prologue, talent agencies can double dip. They can get a percentage from the fight promoter for negotiating to acquire a desired talent and the talent agency will extract a percentage from the talent’s salary as well.

The end result of this business practice is fighters signing contracts with promoters that have incredibly one-sided terms.

Penalties

Penalties clauses in Japanese fighter contracts are terribly punishing.

Let’s say a Japanese fighter gets hurt the week of a scheduled fight and cannot participate. Their contract could stipulate that the fighter not only has to pay back all of the money they sold in tickets but also the money for tickets sold by their opponent. Meaning, if your fight purse is only a small amount but you were selling tickets for the fight to get a percentage, you could be severely damaged financially.

But how much is the penalty? If the ticket distribution system used by promoters to give tickets to fighters to sell isn’t modern, then pocketing the ticket money is very easy for fighters to do. How does the promoter know what is an accurate amount of tickets sold?

Then there are penalties for an actual fight. If a Japanese fighter commits a foul or is disqualified, they could lose all of their fight money.

In the PRIDE era, everyone used to joke about the use of yellow and red cards by referees as the “yakuza vacation fund.” Fight penalties remain harsh in 2020.

Payment dates

If you’ve even written anything in the publishing industry, you understand the delay in getting a paycheck for previous work. Sometimes the wait is 30 days, but often it can be 60 days before you receive money.

Unfortunately, the same holds true for Japanese fighters. According to Mr. Hirata, fighters who fight in a certain month do not receive any fight money until the end of the next month.

What happens if the fight promoter is short on cash? The fighters not getting paid may be asked to keep fighting basically for IOUs. Would a regular manager allow his fighter to fight three or four times without getting paid?

Health and safety

When UFC and Bellator run events, they have their own doctors who work alongside doctors that athletic commissions appoint. If a fighter gets sick, the fight gets canceled.

In Japan, the promoters hire their own doctors. The doctors will do everything in their power to make sure a fight happens. Remember when Stefan Leko got injected with pain killers for a bad back?

If fighters get sick or injured and can’t fight, there are demands for the fighters to undergo full medicals and write apology letters for screwing over the promoters.

Get sick the night before a show and can’t fight? Expect to be made to apologize to the promoter and to the fans for wrecking everything before you can make your trip to the hospital.

Japanese promoters stuck in their old ways

Unlike UFC contracts which require global exclusivity, many Japanese fight agreements do not. They require “regional” exclusivity.

The result of this clause is that foreign fighters are no long scared to breach their Japanese bout agreements if they decide to fight outside of Asia.

In the PRIDE era, the promotion could call up an attorney like Michael Connette and file a lawsuit in Los Angeles. Now? Many Japanese promoters can’t afford to go to court in America, so they allow the gaijin to breach the agreements and move on. This makes it very difficult for promoters to build trust with foreign fighters, which is why the rigid enforceability of the agreements between Japanese entertainment talent agencies and Japanese fighters becomes so important.

Remember the automatic extenders talent agencies use in their contracts with talent? Japanese fight promoters don’t include auto-extenders in their agreements, so the promoters are heavily wedded to the talent agencies in maintaining control of fighters. If the talent doesn’t go along, they could get screwed by both the promoter and the business entity representing the fighter.

The sports society refuses to cooperate with MMA

It may come as little surprise to you that many athletic institutions in Japan want no part of the chaotic MMA scene. What is regrettably crippling towards the development of a new generation of Mixed Martial Arts fighters in Japan is the outright hostility towards the sport by other athletic institutions.

Either you’re committed to a specific sport or you’re out.

For many decades, Sumo fighters would retire out and go into professional wrestling or other athletic endeavors. If it was a departure on good terms, there would be a ceremonial display to demonstrate a conversion.

You’re either part of the family or you’re not. It’s always been kind of accepted practice.

In 2020, the battle lines remain the same but with a higher level of hostility.

The powers-that-be in boxing, judo, karate, amateur wrestling, and other forms of martial arts see MMA as a bastard child. If you train in one of those disciplines, you are expected to maintain loyalty to that discipline.

It is like the debate amongst American parents about what sports their children should play. Should they only be able to play baseball or football? Or should the kids be able to play multiple sports, learn from each sport, and determine what is the best path of course for success?

There is a stubbornness and honor code in Japan that ultimately is discipline-first. K-1 was about kickboxing. Hidehiko Yoshida was representing Judo in PRIDE. Royce Gracie was Brazilian Jiu-Jitsu. Everyone is boxed in by a label. Today’s MMA athletes must have a talent stack and be good-to-very-good in all martial art disciplines. How is this possible to obtain if the battle lines are drawn in Japan to discourage or punish MMA cross-training as young athletes?

Then there is the financial challenge of paying for a young athlete to train in multiple sports. This is where the talent agencies can get their claws into the action.

The old era of Mixed Martial Arts in Japan was built on the backs of professional wrestlers. A new era will have to build on the backs of Japanese athletes who are skilled in multiple disciplines. Unfortunately, the business conditions in Japan prevent young Japanese athletes from achieving success at home. They are being forced to obtain success outside of the country, which then hurts their ability to build and increase a marketing profile inside Japan. It’s a formula for market failure.

The problem is that the old formula was originally built on fans caring about style vs. style fights: the kickboxer vs. judoka, the professional wrestler vs. sumo champion. That is now an impossible format to sell today because that is not how MMA talent is developed. This is why managers like Shu Hirata are sounding the alarm about the changes needed to make MMA successful in Japan. Will there be a truly dominant Japanese champion in the UFC?

Without proper corrections, Japan will forever remain a ghost in the fight business and a giant “What If?” story for generations to come.

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

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