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By Zach Arnold | January 2, 2011

Quietly, the ratings number came out for the 2010 K-1 Dynamite show on Tokyo Broadcasting System and it was a 9.8% rating. A sub-10% rating was the very last thing K-1 needed. (Though it was nice to know that they ended up giving an attendance for the show — 26,729.)

In the here-and-now, it feels inevitable that the relationship between K-1 and TBS will either significantly change or lead to a divorce. The World MAX, DREAM, and Dynamite shows are in decline on the network. Should TBS divorce itself from K-1, the big question is whether or not Fuji TV will help save the company. While ratings aren’t hot on Fuji TV for K-1 programming, they are steadier than on TBS. The relationship between Kazuyoshi Ishii and Fuji TV is also a much longer one as well.

All of this is important for K-1’s survival. The entire business plan that Mr. Ishii laid out for the business after the PRIDE collapse was to control the television pipeline in Japan. By controlling it, he could cash in on the broadcasting fees and also control what programming was on which network. If somebody wanted to promote a foreign show under his banner (think: the Holland shows) and get on Japanese TV in exchange for absorbing the live show costs and getting a % of the TV money, that sounded great. Now with the TBS relationship in serious decline, suddenly the plan becomes a lot less viable.

In a good public relations (and perhaps business) move, Mr. Ishii’s front man Sadaharu Tanigawa told the press that FEG was going to spend the next three months restructuring and getting money from both American and Chinese companies. One company named was Shanghai Media Group. I say it was a good PR move because it was a classic “turn the page before the bad news comes out” tactic. It sounds great to say that FEG will restructure and that there will be a ‘renewal’ for both K-1 and DREAM, but all the concrete facts right now say that the problems facing the company will require a lot more than just three months of restructuring.

The biggest issue facing K-1 is the financial model. The writing is likely on the wall with TBS, so I can understand why the economic realities are going to force K-1 to change. However, there’s a reason that K-1 has always been most concerned about the Japanese marketplace — because that’s where the money is (in television). Without that money, you’re asking K-1 to become a live house business model. That has never been the strength of the company. Well, you might ask, didn’t K-1 used to run a lot of foreign shows in the 90s and early part of the 2000s? Yes, but the man who was responsible for foreign business affairs for Mr. Ishii was Ken Imai. Imai turned on Ishii and ended up going to PRIDE with Nobuyuki Sakakibara right as the whole Mike Tyson fake contract & tax evasion scandal broke out. Mr. Ishii is a conceptual guy and a charmer, not a nitty-gritty numbers guy working behind a desk all the time. Unless Mr. Imai and Mr. Ishii miraculously work together again (which in the fight business is always a possibility), it’s hard to see how K-1 comes up with the right networking structure to make running foreign shows profitable on a big scale. Simon Rutz of It’s Showtime would only be part of the puzzle, not the whole puzzle itself.

And let’s address the idea of K-1 changing it’s economic model in order to get money from outside investors, if you want to call them that. If the money coming in is not due to money laundering or tax write-off purposes, how can you say with a straight face that the investors can expect a 30-50% return on their investment based on all the business data you’ve seen over the last five years? Especially in an industry where there are few tangible assets and the intellectual & video property at stake is largely controlled by the Japanese television networks…

There’s no question that significant change is needed for K-1 to survive in the fight game. However, nothing that I’ve heard as of right now convinces me that there is going to be major change. The situation reminds me a lot of when PRIDE made a deal to work with Ed Fishman and become ‘a casino play.’ Ed Fishman was and is a real, legitimate business man who did his job well. However, as he told the story to us multiple times, Sakakibara was looking to sell the PRIDE assets to UFC while working with Ed. Who’s to say the same situation won’t happen here with K-1?

There are many problems that Mr. Ishii is facing. The biggest problem is that his biggest strength is also his biggest weakness right now. His biggest strength is building up foreign aces. He’s very good at it. He’s taken the best foreign fighters in the world and made them into stars (the Alistair Overeems, the Peter Aerts, the Andy Hugs of the world). The problem is that when your business model is so dependent on Japanese television, you need strong Japanese stars. Yes, fighters like Masato and Kid Yamamoto were strong drawing cards, but the biggest problem K-1 faces is that with the heavyweight class of foreign fighters, they need legitimate heavyweight native stars and it’s just not there. Without the big heavyweight aces, you can’t consistently book the mega fights for the casual fans.

Which leads us to Satoshi Ishii, the man who was supposed to be the great savior of the Japanese fight business. In the history of the modern fight game in Japan (since the Reconstruction period after World War II), there is one sure-fire pattern that you must follow in order for a Japanese ace to become a major star in the eyes of the public. The first step requires that this fighter must have a highly regarded track record in Japan. Meaning, they may have a mixed win/loss record, but the public buys into the fact that they have talent and will become a somebody some day. Think of all the pro-wrestlers like Nobuhiko Takada and Mitsuharu Misawa who did ‘foreign excursions’ to other countries when they were young pups and ended up coming back to Japan after they spent time in Mexico or the States. Once they came back, they were pushed hard and given the chance to succeed. They did. The same case applies here to Japanese MMA. A prospective ace needs to be taken seriously by the public.

Once you get to that point, there are one of two traditional paths to stardom:

a) The fighter goes overseas and plays the nationalism card by dethroning foreign fighters so they can come back home as a conqueror

b) Foreign fighters are brought to Japan and end up getting vanquished. This plays off of the Japanese mentality that the world is on the Japanese stage and that it’s an honor to be in Japan. It also plays off of the race card of ‘the foreign invasion’ angle.

In the case of Satoshi Ishii, none of these attributes apply. This is why he is floundering in Japan and receiving ‘go away’ heat from the fans. I cannot recall a native fighter getting buried so hard in such a universal fashion in the media the days after a big fighting event like this. I know quite a bit about how the Japanese media works and the media there is motivated largely by two factors:

a) fear of the promoters or those connected to the promoters

or b) pay-for-play access, meaning promoters pay off the photographers and writers to cover a show a certain way.

In order for such a critical mass to be reached in the media there to bury someone like Ishii, there are likely one of two reasons:

a) The promotion, with a shrug, doesn’t protest the public burial. Think about what happened to Kid Yamamoto in Shukan Gendai with the ‘marijuana parties’ story.

b) The media no longer looks at K-1 as powerful and therefore isn’t scared so they’ll write whatever they want to because the repercussions are light.

Given Satoshi Ishii’s weird statements before and after every fight, I’d probably guess that A is the correct answer. After all, this is a man who said he was going to fight Tito Ortiz after his November squash against Katsuyori Shibata and do so in the States. Then, before his fight with Jerome Le Banner at Dynamite, there was discussion of him wanting to get into Hollywood. Between the public displays of protest and goofy behavior, I’m sure no one was shedding a tear for the public burial he received in the media. And let me tell you, it was a hell of a burial. Daily Sports ran an English text headline saying “Booooo” next to Ishii’s name. Every other major paper (from Sports Nippon to Nikkan Sports) all ran with “Fans booing at Ishii” headlines.

Tim Leidecker, a wonderful friend and a great writer at Sherdog, asked me after the Dynamite show if there was some way that Satoshi Ishii would be able to turn the public heat against him and become a dominant heel with the fans. I said no. I base that on the fact that he’s an awkward goof socially and the fact that the Japanese public just doesn’t take him seriously now. After the 9.8% rating for Dynamite 2010, it’s clear that the public is just not that into him. Will they ever get into him? It’s hard to say, but fighting in Strikeforce won’t give him credibility when he goes back to Japan. Nobody knows about Strikeforce in Japan. When Aoki lost to Gilbert Melendez last April in Nashville, few if any saw that fight in Japan. Out of sight, out of mind.

Going back to the tenets of building an ace that I laid out earlier in the article, Ishii needs to be taken seriously first in Japan before he starts thinking about fighting in organizations outside the country.

I know that this is largely an exhaustive read for you and you’re probably wondering what the point of all of this is. Here’s the point. The point is that there are so many moving parts and so many obstacles for K-1 to overcome in 2011 and in the future that it’s going to take a lot of work, a lot of determination, and a lot of street & book smarts to pull this off. While it is never wise to underestimate Kazuyoshi Ishii, he is not a fellow who strikes me as someone who has all the answers to win this battle. He’s a tough guy, a charmer, and has a lot of street smarts. What the tax evasion scandal and the loss of Ken Imai proved, however, is that he’s not necessarily a book smart guy. In the predicament he’s in now, he needs all the weapons he can use at his disposal to try to revitalize the industry on a large scale.

Topics: Japan, K-1, Media, MMA, Zach Arnold | 26 Comments » | Permalink | Trackback |