FEG Decides to Go Global; Chinese Investment Bank at the Helm

If you've been following the Japanese scene this year, you know what the main topics of discussion have been; the downfall of Japanese MMA and if DREAM can not only survive, but if Japanese fighters can compete on an elite level still. DREAM has lost television ratings, TV deals, sponsorships and their fighters have been embarassed by Strikeforce fighters. There have been persisting rumors that FEG would auction off or even just kill off their DREAM branch if it keeps losing money and interest and have the K-1 brand remain as their main vehicle.

That is, until a Chinese investment bank, PUJI Capital, stepped in. According to Tanikawa (via NOB), PUJI Capital didn't buy out FEG and FEG will still exist. PUJI will handle the financial part of the business for FEG while FEG handles promoting fights and dealing with fighters. It isn't clear what the exact deal is here, but the way this reads is that FEG is now under the umbrella of PUJI Capital and possibly report to them. PUJI has a global network of investments and will advise FEG on how to move forward with their proposed global expansion (with Asia being their first area of interest). According to an official from PUJI, they look to raise 230 - 345 million USD in the first three years of this "venture."

To prove that Ishii is still influential in the K-1 universe, FEG wants to make K-1 a truly global organization, ala "FIFA." They are looking to have an actual "World Cup" of kickboxing, which if you remember, Kazuyoshi Ishii had mentioned a while back. Seeing as though they have made attempts at making K-1 global for a while now, we'll have to see how this works out. K-1 already holds tournaments in different parts of the world, but for now the main markets are in Asia and Europe. There is room for expansion in the entire Western hemisphere as well as Africa.

Let's be honest here, international expansion is a survival move that companies use when their domestic business is starting to encounter hardships. UFC is an example of rather poor international expansion and strong domestic business, but a company that has enough forward looking to understand that establishing these global markets early on will mean a seamless transition into an international focus if domestic numbers begin to slip. PUJI is a Chinese company, so expect to see more Chinese fighters in DREAM and K-1 and possibly a Chinese GP for K-1. This could mean more regional Grand Prix tournaments leading into qualifying Grand Prix tournaments. Think of the European GPs that had "tributary" tournaments leading up to it.

The question is no longer about money, as they have an investment bank to prop them up. The question is for how long and to what extent. We know that PUJI has airmarked this to be a "three year investment." So that means PUJI will start pumping money into the project very shortly and most likely revisit the financial status and to what scale they believe this whole experiment should be. My best guess is that after a year PUJI sees if FEG has a true future to make money for them, and if not they will continue on a scaled back course for the remainder of their promise and then dump FEG into the dust. Tanikawa insisted that FEG was not sold, which means the damages would not be total if this happened.

This can, of course, be a great thing. Best example I can use is WWE. WWE's domestic business is down, quite a bit. Fans in the US are simply no longer interested in their product like they used to be, so to keep their balance sheet together they rely on international business.