New Japan Pro Wrestling of America, the international spinoff of the Japanese league, announced last week that the North American project will cease operations and enter into liquidation. The short statement mentioned that there are still plans to run events in North America in the future, with the support of TV Asahi, the network that saw its share increase with the sale of the organization earlier this year.
As disappointing as the announcement might be since it’s undoubtedly a step backwards for the legendary Japanese group, it’s not surprising at all. There are numerous reasons why a standalone American project didn’t truly get off the ground, some of which had to do with timing more than anything else, but when you take into account that Bushiroad, the parent company that owned the organization throughout its surge in popularity in the 2010s, sold the promotion to CyberFight, the corporation that also owns DDT, Pro Wrestling NOAH, and Tokyo Joshi Pro, it’s not a shock that they are consolidating New Japan to put their resources into the domestic market.
In truth, the style alone was going to make New Japan Strong, the original brand for the American expansion, a niche product. The key was to determine if there was enough of an audience, specifically through the expanded distribution of modern technology, to make NJPW Strong a profitable niche product. It’s not an impossible task since cult favorites can find their share of the market in any genre, but it was particularly difficult to do that when the organization launched in 2019.
Of course, if someone enters the pro wrestling market in the United States on any level, they are competing with the WWE to some degree. Even independent shows on the local level have to compete with the fact that an ESPN+ subscription is $30 a month to watch the pay-per-views, and sometimes, it might be more affordable for the family to stay home to watch the PPV than to buy four tickets to the show in their town. For New Japan Strong, it was going to be a matter of competing for the pro wrestling dollar on an overall basis rather than shows directly going head-to-head or on the same weekend.
It’s important to keep in mind that the same year that the expansion started, All Elite Wrestling launched with a core group of talent that were key to the previously mentioned surge in popularity. As we know, since the launch of All Elite more than seven years ago, Tony Khan also signed away almost every top New Japan star on the roster. We’ve seen a number of Japanese talent sign with WWE in more recent years as well. The bottom line is, New Japan can’t compete with TKO’s billion dollar corporation, or Tony Khan’s billionaire family so if someone is offered a hefty pay increase, the vast majority of the talent have to take the deal for the financial security that it provides. To put it in perspective, it was reported that New Japan was sold for $22.6 million, which is roughly half of what the WWE gets paid for one of the Saudi Arabia events.
Don’t get me wrong, New Japan has held some of the most legendary events and had some of the most thrilling matches in the history of the sport, it has a very important place in the wrestling industry, but from strictly a business prospective, it’s considerably smaller than either of the major American groups. That’s why an American expansion, as much as there was a demand for it from the die hard demographic, was going to be an uphill climb.
Aside from the launch of All Elite and the departures when others were offered contracts with the American promotions within the past few years, it can’t be understated how much the pandemic impacted the revenue of New Japan, which does the bulk of its business through live event tickets and merchandise rather than the media rights contracts that are the primary revenue stream in the United States. When live events were shuttered during the COVID-19 pandemic, New Japan still had to pay the wrestlers’ contracts, but didn’t have the live event sales to cover those expenses. Obviously, when limited capacity was allowed, it gave the company more more to work with, but limited capacity also meant limited revenue while they still had to fulfill the contract obligations.
There’s no doubt that the launch of New Japan World, the streaming service that broadcasted events live, helped expand distribution and can be an effective revenue source for the promotion, but it’s a matter of if there was enough of a North American demand for an expansion onto another continent to be successful. Again, to put it in perspective, the WWE tried to launch NXT UK prior to the pandemic and the project didn’t survive, despite the WWE machine behind it.
Between the amount of talent that left and the struggles of the pandemic, New Japan has spent the past few years in a rebuilding process, which isn’t impossible, as every company has to do it at various points but the reality is that it takes time to truly replenish the roster. Ryohei Oiwa and Yuya Uemura have done very well this year and seem to have potential to be a rivalry to build around in the future. I think Shingo should get another run as the IWGP Heavyweight champion and is probably underutilized in the grand scheme of things. The current IWGP champion, Yota Tsuji has done well in the role. He looks and works like a main event guy.
Still, the issue was that the domestic product needed all hands on deck and the focus there to structure that rebuilding process. The resources, both talent and money, couldn’t be used for an American expansion that didn’t get off the ground after the impact on business from the pandemic. Keep in mind, as trivial as it might sound, the logistics of such a situation can be a hurdle as well. It’s nine or ten hours to fly from Tokyo to the United States so it’s not as though it would be realistic for the company to bring the native talent to America on a regular basis to try to draw crowds for the Strong events.
The New Japan LA Dojo is also closing as a part of the liquidation process. Obviously, New Japan has their training center in their home country so they can continue to recruit talent, as well as to send prospects on excursions to hone their craft. But, the closure of the dojo more or less confirms that CyberFight wants to completely scrap any expansion plans for the future. They don’t have any property or resources in the United States so that they can completely focus on their domestic market, which makes sense based on the status of the organization.
According to the statement, there will still be events in North America, but I’d guess that the Japanese league will continue to partner with AEW for most of those shows, which is also a wise decision. As a purist, I thought it was great that the New Japan product become more accessible to American fans, especially with English commentary for New Japan World, and merchandise options located in America to avoid astronomical shipping costs. That being said, the closure of the New Japan of America project almost underscores the notion that trying to get a niche product over to the American audience on a bigger sale is too much of a contradictory business concept. As I said, it’s definitely a step backwards because it proved that New Japan doesn’t have wide scale global appeal, but at the same time, it’s also definitely the best move for the company since it will hopefully allow them to strengthen their domestic business in the long run.
Until next week
-Jim LaMotta
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