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How Sustainable Is Sengoku's "Fight-lanthropy"?

In the aftermath of their featherweight tourney, Jordan Breen makes a point about Sengoku:

Now a year old, Sengoku's matchmaking and product is still every bit as esoteric as it was to begin with. It's no secret that when it comes to MMA, Japan is amidst the latter part of its cultural boom-bust cycle. As with all things that become reinvigorated -- but especially sports -- it takes truly particular and engaging personalities to galvanize the Japanese public, the way that the likes of Bob Sapp, Hidehiko Yoshida, Masato and others played pivotal roles in the kakutougi boom in years past.

WVR have made nominal attempts to snare some casual interest, using popular figures like the aforementioned Yoshida and Josh Barnett, playing into historical storylines with the use of Brazilian jiu-jitsu stars like Roger Gracie and Alexandre "Xande" Ribeiro, and trying to build Japanese aces like Takanori Gomi and Kazuo Misaki. However, it's extremely telling that the first-ever bout the promotion staged was Nick Thompson against Fabricio Monteiro -- two rock-solid welterweights, both virtually unknown to non-hardcore fans.

These sorts of matchups typify Sengoku's product. Despite the fact the promotion has yet to do anything even remotely close to turning a profit, WVR has consistently continued to craft an event that caters mostly to the most ardent cadre of MMA fans, the sorts with accounts to multiple MMA torrent websites, who find joy in live streams of D-level shows from the Midwest, and who are excited by the fact that WVR consistently chooses some of the most deserving-but-overlooked Japanese fighters, and unheralded-but-outstanding foreign talent to populate its card. For casual fans on either side of the Pacific, the charm is lost.

Leland Rolling (like many hardcore fans) is very appreciative:

Nonetheless, the hardcore fanbase appreciates World Victory Road's efforts to bring quality bouts to the fans. The Featherweight Grand Prix alone has some top notch matchups in the making for their next round.

Their philosophy to the fight game truly hits at the constant complaint from many hardcore fans. We want to see the best take on the best, and while WVR wasn't able to lock in all the talent they were absolutely wanting in the Featherweight tournament, they did create some truly golden matchups that produced surprises, great matchups, and quality MMA.

I second this, of course. But one cannot help but scratch their head as well. Sengoku is able to stay afloat essentially with generous corporate backing and for now that seems enough. Those in positions of power at Sengoku and Don Quijote have affirmed their support for WVR and the Sengoku product.

So, is it possible this philanthropic effort will continue as it has been without ever being forced to return anything to financial stakeholders other than the quality MMA they're principally committed to? Perhaps. But even with strong affirmations of support, one has to have some skepticism about this. Japan is facing an economic crisis of their own, which will put downward pressure on corporate coffers (over time, of course) to cut costs. Admittedly, my understanding of Don Quijote is that they're still doing quite well, but we face the obvious issue of how long any corporation is willing to tolerate losses that are likely in the hundreds of thousands of dollars if not outright millions.

I am certainly thankful for Sengoku and do not wish them ill, but we also must reasonably ask ourselves how sustainable this debt financing actually is. I realize the promises of support are strong, but we also live in the real world. And in the latter, the financial bottomline is the final arbiter.

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Honestly, while I love the matchups they’ve produced, we definitely can’t ignore the fact that their backers are basically putting money into a promotion, putting on quality MMA bouts, with little to no money coming back to them in terms of profit.

While they are financially well-backed, in this type of economy, who really knows how long they can go for.

Editor-in-chief of MMA-Analyst.com

by Leland Roling on Mar 23, 2009 2:46 PM EDT reply actions   0 recs

I wouldn’t take the “philanthropy” angle too literally. The whole point of Sengoku is to create a TV Franchise, so everything they’ve done up until now could be considered a means to that end. Developing telegenic stars like Kitaoka and King Mo is on the top of their agenda right now.

I am certainly thankful for Sengoku and do not wish them ill, but we also must reasonably ask ourselves how sustainable this debt financing actually is.

The answer is… nobody knows. Not even Breen. For all we know, Sengoku is just a blip on Don Quijote’s radar.

by smoogy on Mar 23, 2009 3:13 PM EDT reply actions   0 recs

The answer is… nobody knows. Not even Breen. For all we know, Sengoku is just a blip on Don Quijote’s radar.

My thoughts exactly. I’d love to be able to weigh in on this subject, but the reality is that none of us have any clue as to the financial situation of WVR or DQ. All I can do is wish them the best and continue to enjoy and support their product in any way I can.

Unrelated: why doesn’t the MMA Opinion guy post week-to-week ratings for Sengoku-G?

Contributor Emeritus - BloodyElbow.com

by Chris Nelson on Mar 23, 2009 3:20 PM EDT up reply actions   0 recs

There’s links to their financial and investor relations documents in there. I think it’s a bit of a misconception when people talk about large companies, their finances and what is and what isn’t “blips” on their radar. Don Quijote is a publicly traded company and as such, what it’s investing in will likely always be under intense scrutiny. If money’s not being made, you can expect that serious questions will be asked by it’s shareholders. Their stock value alone has lost half of it’s value in the last year. Given the current economic climate, pretty much everyone is in the same boat. Their numbers for the 4th quarter last year where pretty stagnant too.

Anywho, not offering an expert opinion or anything, but suggesting it may be nothing but a blip on the radar is oversimplifying things.

by LiuLang on Mar 23, 2009 3:50 PM EDT up reply actions   0 recs

From what I’ve heard from friends in Japan, Don Quixote is likely going to have a decent year within the boat of economic crisis. From what they’ve told me, they still beat almost everyone on staple goods and foods in price, and as people get strapped for cash, it may turn some decent profits, much like Aldi has done in the U.S.

Editor-in-chief of MMA-Analyst.com

by Leland Roling on Mar 23, 2009 4:09 PM EDT up reply actions   0 recs

While that all makes sense, companies like Don Quijote will always be looking to divest themselves of money losers in times like these. Shareholders are looking for dividend payments, not charity business projects. The FWGP was fun to watch, so hopefully they continue throwing money at it!

by LiuLang on Mar 23, 2009 4:49 PM EDT up reply actions   0 recs

I wasn’t referring the statement to whether Sengoku would be successful, merely giving a financial outlook of the company. Whether or not they are fight fans and want it to succeed it another topic, but I would be more inclined to believe there is a bigger picture in the end, a TV deal or something along those lines. Obviously, they want profit.

Editor-in-chief of MMA-Analyst.com

by Leland Roling on Mar 23, 2009 5:13 PM EDT up reply actions   0 recs

There is no such thing as a blip on the radar as far as losing money in a publicly traded company is concerned. Making a profit off operations is part of their fiduciary duty to their investors and they never just lose money for the heck of it. Don Quijote will only keep this up as long as it fits into their planning and expectations for WVR.

by who me on Mar 23, 2009 11:39 PM EDT up reply actions   1 recs

The “philanthropy” angle is merely a term being used in regards to the actual matchups, I would hope nobody is taking it literally as a philosophy that Sengoku will run with for the course of the promotion. Obviously, they’ll have to make some sort of changes to get ratings at some point.

I’m much more receptive to having somebody like Kitaoka or Lawal as the telegenic stars behind Sengoku. DREAM doesn’t have it bad either with guys like Yamamoto and Aoki, but they don’t seem to be testing them as frequently. Lawal is a project obviously, and Kitaoka dominated Gomi.

I suppose Aoki will be getting his challenges though with Sakurai in the future, and DREAM will have a much better time pulling ratings with that matchup coupled with Yamamoto’s pull.

Editor-in-chief of MMA-Analyst.com

by Leland Roling on Mar 23, 2009 3:43 PM EDT up reply actions   0 recs

"The "philanthropy" angle is merely a term being used in regards to the actual matchups, I would hope nobody is taking it literally as a philosophy that Sengoku will run with for the course of the promotion."

For clarification, that’s not what I’m driving at. Just that as long as they aren’t generating meaningful financial returns, it’s the sort of de facto “fight-lanthropy” Breen is describing. That’s it.

by Luke Thomas on Mar 23, 2009 3:45 PM EDT up reply actions   0 recs

What aren’t you driving at? That the promotion would run its course in this manner? I wouldn’t think anyone would actually believe that. I understand the “philanthropy” angle in that WVR is dumping money into something while not seeing a profit, and yet still giving the fans quality bouts.

Editor-in-chief of MMA-Analyst.com

by Leland Roling on Mar 23, 2009 4:06 PM EDT up reply actions   0 recs

Just for the record, and because I know I’ve mis-stated it on BE in the past, Aoki/Mach is at DREAM.8 which will air on tape delay, and KID will fight on DREAM.9 (mid-May) which is live on TBS.

Contributor Emeritus - BloodyElbow.com

by Chris Nelson on Mar 23, 2009 3:48 PM EDT up reply actions   0 recs

I really haven’t kept up on the time slots, but is the tape delay for DREAM.8 going to be a late slot again? I doubt it with Aoki vs. Mach, but who knows.

Editor-in-chief of MMA-Analyst.com

by Leland Roling on Mar 23, 2009 3:53 PM EDT up reply actions   0 recs

I’m not sure, but it’s on a Sunday night again so they may do what they did for Aoki/Gardner at DREAM.7 and just stick the Aoki/Mach fight at the beginning of the broadcast.

Contributor Emeritus - BloodyElbow.com

by Chris Nelson on Mar 23, 2009 4:18 PM EDT up reply actions   0 recs

I wonder what flavor chump they’ll feed Kid.

by subo on Mar 23, 2009 4:16 PM EDT up reply actions   0 recs

i really hope they last… the events are run wonderful, the staff is very nice, and the fights are great.

by ekc on Mar 23, 2009 3:18 PM EDT reply actions   0 recs

Caught the show Saturday morning off my DVR. It was really good and had way more exciting fights than Dream did.

Mike Goldberg: "You know Joe, When Matt and his brother Mark Hughes were growing up, they would pound each other behind the barn."

by xFenixKnightx on Mar 23, 2009 3:26 PM EDT reply actions   0 recs

Looks like HDNet did the right thing by televising Sengoku FW GP LIVE and DREAM FW GP on tape delay. HDNet is getting these orgs (as well as itself) more and more recognition, which is a really really good thing.

by MMASuPreMaCy on Mar 23, 2009 5:41 PM EDT reply actions   0 recs

As far as Don Quijote's financial situation

My understanding is they are a cross between Dollar Tree and a Walmart supercenter. This economy actually benefits their business model. Can they sustain a small scale MMA production for a while in this? Absolutely. Their expenditures aren’t anything ridiculously high – They’ve probably actually made enough money on their small gates to cover their fighter payrolls. (Anyone that doesn’t have Yoshida on it).

Gimme 1 round!

by ItBurnzWhenIP on Mar 23, 2009 9:22 PM EDT reply actions   0 recs

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