What comes to mind when one talks about Japanese sports? Some may mention sumo wrestling, with the big (I mean BIIIIIIIG!) wrestlers fighting in a style never seen before in the U.S. while some may mention Japanese baseball with the handful of Japanese players succeeding in MLB, and some may even name the world hot dog eating champion Takeru Kobayashi. Japan may not be the first country people in the States think of when speaking of sports. However, that trend may see a big change in the next five to 10 years.
In early 2016, with the Japanese government in desperate need of new financial resources and facing a rapidly aging population and declining birthrate, Japan made public the Japan Revival Plan 2016. The plan presented 10 new economic projects to revive the economy, including business areas such as tourism, health, and service sectors, for which Japan is very well-known.
The surprising business sector included in the plan was the “Sports Industry.” With the much-anticipated 2020 Tokyo Olympics just around the corner, Japan now aims to increase the sports business industry from its current market size of $50 billion (U.S.) to over $150 billion by 2025 (a 300 percent improvement in 10 years!) through its revival plan. Though this goal seems overly ambitious, given that the Japanese sports scene has shrunk by more than 20 percent in the last decade (from $70 billion in 2002 compared to $55 billion in 2012), Japan has started making strides in making these goals a reality.
Following are some of the changes that took place after the revival plan was announced.
1) First official professional basketball league, “B League,” was born in September 2016. The league, having Japanese IT giant SoftBank as its primary sponsor, pumped in around $27 million a year for the first four years (2016-20) and introduced many innovative ideas never seen anywhere.
(Note: The league was not born as a result of a governmental plan, as the plan to build the league started much earlier than the announcement of the Revival Plan.)
2) Japanese sports agency giant Dentsu, along with Scrum Ventures, announced Sports Tech Tokyo, an accelerator program focused on bringing new sports technologies to the Japanese market prior to the 2020 Olympics.
3) More than 70 new plans for new stadium and arena construction. As the Japanese government stated in its plan, it would like to promote the construction of new stadiums and arenas. Within the next few years, there will be several decisions made around those efforts.
We shall experience many changes to come in the Japanese sporting scene, and with these changes all happening at once, this may be the right time for foreign companies to enter the market. These can be evidenced by the increasing number of Japanese sports teams and leagues attending sporting conferences and events held in the U.S. Capitalizing on the meetings would be a great opportunity for the foreign companies to engage with Japanese sports businesses, teams and leagues.
Yusuke Katoku is CEO at Sporta Corp.
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