Daniel Herbertson of MMA Fighting is reporting that FEG has reached an agreement with Chinese investment bank PUJI Capital that plans for PUJI to raise nearly $230 million in funds for the beleaguered organization’s newest international expansion plans.
Tanikawa stated that changes should start from 2011 and that Japanese events will continue with K-1 on Fuji TV and DREAM and K-1 MAX on TBS. PUJI will not be involved with the day to day operations regarding the actual promotions but will instead be in charge of fund raising and leading the global expansion and have forecast that they will gather 20 billion yen ($230 million).
Payout Perspective:
This is not an announcement of an immediate capital injection; FEG has not yet secured the $230 million in funding. PUJI Capital is forecasting that it will be able to raise $230 million for FEG, but that is anything but a foregone conclusion.
Normally, you don’t make an announcement like this unless you’re sure you can get the money, but I wouldn’t be surprised if this announcement is more of a PR stunt than anything else. The news has been well-received by the entire MMA community – many of whom long for the “glory” days of Pride and more competition in a landscape dominated by the UFC – and FEG is definitely looking to generate some renewed interest in its fight brands to help it raise new money.
However, FEG has yet to prove that it can manage its assets with any sort of fiscal responsibility. I’m skeptical that PUJI can raise $230 million in the first place, but further question the notion that more money, and an ambitious international expansion plan, is going to solve FEG’s current problems.
If FEG does manage to raise significant funds, it should focus on its home market, first: establishing a strong foundation in Japan with a solid fan base and predictable revenue streams. Yet, rebuilding Japanese MMA is also a tall order. Many believe that much of the success MMA has had in the country is linked to professional wrestling (cross-over and freak show fights were the real draws on many nights); with pro wrestling on the decline, it may be difficult to bring MMA back to where it once was.
If, and only if, FEG can establish a strong fan base, with a solid fight product and firm financial footing, can it look to expand beyond Japan and into other markets. The Asian-Pacific is the most logical destination (Korea, China, Australia); likewise, South America (Brazil) remains relatively untapped. But I’m not sure how much success they, or anyone else, will have in Africa at this point.
This is definitely something to keep an eye on. The MMA fan in me wants to get excited, but FEG and Dream/K-1 still have a long way to go.
Its hard to believe anything this company says. This is the same company who paid Mike Tyson to lie to the fans and claim to be fighting Bob Sapp when it was never going to happen. Used tyson more than one time to spread this lie. Now in the last week they come out and challange the UFC and WWE. No doubt a way to get more press by piggybacking this big companies. Now another lie to appear bigger than they really are. I grew fed up with the japanese promotions way of doing business long ago.
Nice article Kelsey. I found it really interesting that the expansion did not include America. I agree 100% with the idea that Dream, if, they are able to get 230 million, should fix their own house first. Money isnt the answer to anything, just look at Calvin Ayres, the founder of Bodogfight, he had more money then god. Where is he right now? Not in MMA. How about Mark Cuban? He invests money into Inside MMA and HD Net then makes a play to get into the MMA promotion end. It didnt work out. My point is simple, bad management will never work. The reason Zuffa is so successful, is their management skills. It takes vision, courage, fiscal responsibility, hard work, sleepless nights and alot of luck to be successful in this sport. Look at Scott Coker, he has tried to make a play, tried to become UFC’s competetion, it has been one bad decision after the next. Dream have a chance to expand their Asian markets, thus thwarting any potential UFC gains in Asia. The problem as I see it, UFC’s brand is gonna win over Dream’s brand. If Asia is anything like America, they will pick the better product. Dream will be able to sign fighters like Fedor, Barnett and the like, but, America is where all the MMA action is at currently. This move is just an attempt to beat the UFC to the punch. It is an idle threat and UFC will move forward with good business plans, proper management of assets and a quality roster of fighters. This is a recipe for success. Dream are gonna try to rehash the freakshows of past. I cant wait to see another Fedor vs Zulu or Fedor vs Hong Man Choi fight.
I’ve followed K-1 CLOSELY since it’s start in the early nineties and have been to Tokyo watching Hunt (now signed by UFC) dismantling three opponents in one night with eighty thousand people screaming inside the massive Tokyo Dome.
Used to write for Coker when he had K-1 USA too.
To me the press release doesn’t change a thing. FEG has been in financial troubles for almost ten years now and by releasing this presser it ONLY shows that they haven’t learned a thing.
The content of the release could have been written by my five year old daughter and with Tanikawa still heading FEG they will most likely only prolong their inevitable death!
There is NO accurate plans; no substance and as usual no credibility in the statement.
I used to contract for Europes biggest TV-network, Eurosport (also available in China and Russia) for five years as their fight sports commentator but even they don’t broadcast K-1 anymore! They ruined their brand and will now try to grow globally with chinese money and the chief who already showed his lack of business understanding. This is not something a rigid marketing og business man would bark loudly about. But Tanikawa…..ah well!