The Mystery Behind the UFC's Goals in Japan

On Sunday morning, MMAFighting.com's Dan Herbertson broke news that former PRIDE FC President Nobuyuki Sakakibara, a man tainted by yakuza mafia ties that eventually sunk PRIDE, was planning on stepping back into the sport of mixed martial arts to promote a small event in the spring with DREAM head Hiroyuki Kato and J-Rock boss Takahiro Kokuho. For most fans, a shrug of the shoulders demonstrated their waning interest in the happenings on the tiny archipelago nation across the Pacific. Why should we care if some tainted yakuza-connected figurehead plans to try to save the sport in Japan?

As Mike Fagan pointed out in a piece that ran on Sunday night, desperation often precedes the final collapse, and this may be Japan's final attempt to inject interest in a sport that is on its final legs. While Sakakibara's name bears a stench that will likely never be cleansed, he has a number of advantages over the incoming foreign competition. Zach Arnold has taken the stance that while Sakakibara's name is tarnished, stranger things have happened. He talks in great detail about the fight scene and the impact of this news over at FightOpinion.com, going so far as to theorize that Sakakibara could have an impact despite his history.

The UFC's entry into the Japanese market is rumored for late this year, possibly December. As Arnold points out, Sakakibara could prove to be a "more impactful player" in Japan than the UFC, even with the lingering baggage he carries around as the man responsible for PRIDE's demise. The greater question is how can Sakakibara be more relevant that the world's premier mixed martial arts' promotion. Because the UFC will be entering a culture that has historically crushed American competition on their home turf:

I've written this before and I'll write it here again for reference. There are major strikes against UFC doing long-term consistent business in Japan that the promotion will unlikely be able to overcome.

They are not a Japanese company. I don't care how big UFC is worldwide, they are not nor will they ever be viewed as a Japanese company. This is a huge hurdle. Even if Zuffa was able to get a Japanese front man, it would be a challenge. Their front man happens to be a white guy. That's a strike against the organization. I'm not racist, but I am telling you how things operate in the country. It's very difficult for Zuffa to get a network TV deal on a big-money scale because they are not Japanese.

They are not viewed as a Japanese product. By that I mean the following - they do not use a pro-wrestling ring. They do not use a PRIDE-style production set-up. The visuals are a legitimate strike against the company. Jordan Breen mocks online fans who say that MMA just ‘isn't the same any more' without PRIDE around and I think he misses the boat when he does so. I completely understand that fan mentality and it exists in Japan.

UFC needs a major Japanese MMA promotion to produce stars. This sounds like a very obtuse idea, but I'll point out what I've learned over many, many years with the fight scene in Japan. There's two ways to cash in big in Japan with native athletes. The first method is that a Japanese promotion has to produce the anointed crop of uber-rookies and then those rookies are 'sent overseas' to conquer the foreigners so they can come back home to fight... for their home Japanese promotion. The second method is that the major Japanese promotion brings over foreigners and pays them a lot and hopes that they lose to the natives. This plays off of the fans' psyche that Japan is the world stage and therefore if you want to be legitimate, you have to come to Japan. If you're noticing already, both methods of producing Japanese stars are almost impossible for UFC to pull off. This is why WWE has not been able to make it in Japan despite making it everywhere else in the world, including vanquishing some popularity of Lucha Libre in vaunted Mexico.

I'm not an expert in Japanese culture by any stretch of the imagination. My understanding of the business practices in the region stems from four international business classes and a class on marketing in Asia. While I learned the basic lessons of knowing your audience, product placement, etc., there isn't anything that can prepare a company for entry into Japan. 

I have two acquaintances that work in very different industries in Japan, one who teaches Japanese children English and another who programs video games in a typical Japanese corporate environment. My programmer friend isn't a savvy observer of Japanese business, but from all the historical accounts of past failures of American businesses and the first-hand accounts of my friend's discussions with actual MMA fans at his workplace -- Zach Arnold's assessment is spot on. 

One of the overall themes from the three points listed above is that the Japanese are very proud of their country. If it isn't manned by Japanese workers and produced in Japan, the likeliness of success is very low. Large companies like Vodafone, Burger King, Wendy's, Nokia, and Motorola all failed in Japan, and even enormous dot com companies like eBay fell to known Japanese alternatives. Google can't even break into the region, and everyone loves Google, right?

Wrong. Those mishaps all followed a similar path to failure. Vodafone didn't research their market. Google can't catch fire because Yahoo! Japan has a history and local background in the country. eBay had a myriad of problems from a horrible, unchanged American pricing structure to never localizing the product before they made announcements of its launch. In American, we are used to seeing huge billboards and commercials that say "COMING SOON!" and high-res photos of the product. That doesn't seem to work in Japan, or at least not for eBay.

This leads me to the question: What does the UFC hope to gain by entry into the Japanese market? A cultural history, a localized product, a Japanese workforce, and a management team that understands Japanese culture. The UFC doesn't possess any of these qualities with the exception of some homegrown fighters who used to be relevant in Japan.

As Arnold points out, the UFC's figurehead is a man who brought the NBA to China, a completely different market than Japan. They have no history in Japan whatsoever. Their product has no pull in Japan, and the very small distribution deals that they made only reach a minuscule portion of the 127 million people living in the country. The UFC is unwilling to work with another Japanese promotion to help them enter the industry, and to be perfectly honest -- I don't blame them. But it could prove to be a crucial step into successfully turning a profit.

By all accounts, the idea of the UFC running a profitable ship in Japan seems like a waste of time, and it's a mystery to me as to why the UFC is choosing to forgo the burning of cash. Is it some sort of nostalgic way to bring major mixed martial arts' shows back to Japan? Is it a dream that Dana and Lorenzo want to fulfill no matter the cost? How far can a dream go before the large red number at the bottom of the balance sheet screams "Leave the country!"? 

If the UFC proves everyone wrong and turns a profit in Japan, I'll be the first to admit I was wrong. From the topical viewpoint that we all have, the UFC doesn't seem to have the resources or capabilities to run a successful promotion in Japan. Their only advantage is the fact that they do have fighters who are Japanese, and they do have a few fighters who have some pull in Japan. Yushin Okami isn't one of them, but Norifumi Yamamoto, Yoshihiro Akiyama, and Michihiro Omigawa, at the very least, can pull some fans to the arena. Unfortunately, the UFC isn't  a known product in Japan, and they will be hard pressed to sell it as one without the ability to produce stars and resonate with a very different fanbase. Good luck to you, Zuffa. You're going to need it.