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Japan's Rugby World Cup -- the first to be held in Asia -- aims to launch the niche sport into the region's multibillion-dollar market.   © Kyodo
Cover Story

Japan's 'epoch-making' Rugby World Cup: false dawn or breakout moment?

To enter the big leagues, game seeks to untangle itself from Japan Inc ownership

TOKYO -- It is two months before the rugby season begins, but on a recent Sunday morning at a high school sports ground in central Tokyo, close to 120 children, most of them elementary school students, practiced passing and tackling drills in the summer heat.

Founded in 2013, the Bunkyo Rugby School is one of 25 similar clubs in the Tokyo area. Twelve-year-old Kanta Mitake, who has been a member since the age of six, is now gearing up for the citywide tournament in November. Kanta has often watched matches at Tokyo's Prince Chichibu Memorial Rugby Ground, the home of Japanese rugby, but has never had a chance to see the national team play -- until now. "I'm really excited to watch the Rugby World Cup in a stadium," he said.

It is this enthusiasm that World Rugby, the sport's governing body, will need to tap into as it tries to capitalize on the first ever Rugby World Cup to be held in Asia, which kicks off in Tokyo on Sept. 20. More than 500,000 foreign fans are due to arrive in Japan in the coming weeks; nearly all of the 1.8 million tickets have been sold. World Rugby claims that 40 million people in Japan -- a third of the population -- will tune into the opening game.

The challenge for the organizers is to use this inevitable short-term boost in popularity to build a bridgehead for rugby in Asia, and to emulate the success of Japan's co-hosting, together with South Korea, of the soccer World Cup in 2002. That event -- also the first time that the tournament was held in the region -- was a seminal moment in Asian sport, setting off a boom that endures to this day and helping to turn Asia into a multibillion-dollar market for soccer.

Children at Sunday morning rugby practice in Tokyo: World Cup organizers are aiming to tap into this enthusiasm to build a bridgehead for rugby in Asia. (Photo by Ken Kobayashi)

Rugby, however, has more ground to make up than soccer ever did. With a limited domestic audience for the sport -- and with the Olympics less than a year away -- there is only a limited window for the tournament's organizers and sponsors to get the rugby gospel out to the masses.

"This is the first Rugby World Cup in Asia -- we need to make sure this will be epoch-making," Akira Shimazu, CEO of the Rugby World Cup 2019 Organizing Committee, told the Nikkei Asian Review. "[The tournament] should not only be for people who play the sport, but also for future players."

Turning point

Japanese rugby has had false dawns before. Perhaps the biggest was the "miracle" win against South Africa at the 2015 World Cup in England. Three points behind one of the game's perennial powerhouses as the match went into the last play, Japan twice spurned the opportunity to kick a penalty and earn a tie -- a worthy result in itself. Instead, the Brave Blossoms gambled. They laid siege to the Springboks' line before spinning the ball out to the New Zealand-born Karne Hesketh, who scored in the left corner. Delirium ensued. Japan had shocked the rugby world.

Players such as fullback Ayumu Goromaru went on to become household names, and the nation went into a short-lived rugby fervor. Average attendances for the Top League, the nation's premier rugby division, jumped to 6,470 in the 2015-16 season from 4,719 the previous year. But crowds then quickly dropped back toward the 5,000 mark, where they remain.

The win took even the Japanese rugby establishment by surprise. "[The game] attracted attention from all over the world, but we failed to maintain that momentum," Japan Rugby Football Union Chairman Kensuke Iwabuchi told Nikkei. "The JRFU had not sufficiently prepared for what to do after this victory because it happened suddenly. But this World Cup is different. Japan must have a solid win, not a chance victory. We are ready this time."

Japanese supporters turn out in force for their national team at the Pacific Nations Cup in August. (Photo by Toshiki Sasazu)

The unusual structure of the Japanese rugby leagues is partly to blame for the failure to keep up momentum after that famous win, said Iwabuchi.

Unlike in other sports, where cities and towns host local teams that play to home crowds, Top League teams are not rooted in communities but are attached to corporations. The list of companies that run teams reads like a Who's Who of Japan Inc.: The likes of Suntory Holdings, Toyota Motor, Canon, Panasonic, Honda Motor and Toshiba are represented in the top flight, but the teams have no fixed home grounds.

"Many rugby fans say they don't have a sense of supporting their own team," Iwabuchi said. "If they're not employees or students in companies or universities with their own rugby teams, they really don't have that feeling."

The vast majority of players are technically amateurs, and are employees of the corporate owner -- although there are some notable exceptions. Overseas stars such as former All Black Dan Carter have very lucrative professional contracts. Carter reportedly earns more than $1.2 million per year to play for the Kobelco Steelers, a team run by Kobe Steel.

The Top League relies on gate receipts for its revenues, and on its member companies, which operate the teams and buy 60% of the tickets to the matches.

Tokyo has a professional side, the Sunwolves, a franchise team that plays in the international Super Rugby league and competes against teams from Argentina, Australia, New Zealand and South Africa. The club does not take part in the Japanese domestic league, and plays some of its home games in Singapore.

Playing the best teams from other major rugby nations, the Sunwolves regularly attract bigger crowds than their Southern Hemisphere opponents. Part of the attraction was that supporters felt they had a local team in Tokyo and, being a professional rather than corporate team, fans could support the side without it being a duty to an employer.

However, in a blow to Japanese rugby's international profile, the team will withdraw after the 2020 season; Sanzaar, the organizer of the Super Rugby tournament, decided to end the Sunwolves' participation after it failed to agree on a new contract with the JRFU.

Some within the Japanese game's hierarchy are pushing for a move away from the corporate system and to take the game professional. Katsuyuki Kiyomiya, a former Top League coach who is now vice president of the JRFU, is part of a group aiming to start a fully professional league in 2021. The initial plan is to start the competition with a dozen teams based in the 12 World Cup host cities, which would mean creating independent clubs who would be responsible for their own financial survival.

"Rugby has abundant resources," Kiyomiya said at a symposium in Tokyo at the end of July. "Japan's rugby has the potential for huge transformation by turning these resources into assets."

Japan players celebrate their shock victory in the now-famous 2015 Rugby World Cup match against South Africa.   © Getty Images

Kensuke Hatakeyama, who has played 78 games for Japan -- including the legendary South Africa game four years ago -- is a leading advocate for a fully professional domestic top flight. Now chairman of the Japan Rugby Players Association, he told Nikkei that this needs to happen within two years or risks losing momentum from the World Cup.

"We quickly need to create a vision for the pro-league ... and look at whether we want rugby to just be a sport that is popular domestically, or whether we want Japan to be able to take on the world," Hatakeyama said. "Baseball and soccer have become a career path for kids in Japan, but people don't yet see rugby as a career. We need to get them more motivated."

The soccer J.League has boomed since its formation in 1992, and had an average attendance of just under 20,000 fans for top flight games last season. The clubs made a combined 59 billion yen ($555 million) in sponsorship in the league's fiscal-year 2018 -- nearly half their total operating revenue.

But it is the basketball B.League that Kiyomiya's group is using as a model for their proposal. The B.League planners threw out the rulebook in creating the competition in 2015, ditching corporate team names for geographic location and marketing the sport at younger, more tech-savvy consumers by streaming the matches through Line, one of Japan's most popular messaging apps, and selling tickets through a mobile platform. The results are showing: More than 2.5 million fans attended games in the 2018-19 season, and SoftBank has come on as a sponsor. Chiba Jets Funabashi, one of the league's member teams, signed a partnership deal with mobile game developer Mixi to build a 10,000 capacity arena.

Kiyomiya has brought in Masaki Sakaida, one of the key people behind the foundation of the B.League, to work on innovation at the JRFU.

Rugby star Ayumu Goromaru and Japanese Prime Minister Shinzo Abe play catch at the leader's official residence in 2015.   © Reuters

Perhaps the biggest issue, though, is money. Corporate Japan has historically seen support for rugby as corporate social responsibility, or as a marketing endeavor. A spokesperson for Kobe Steel said that it is a way to help people to get to know the company, and serves as a form of advertising. That model, the spokesperson admitted, may have to change as rugby evolves.

"We can't deny that in this volatile economic environment, it is becoming tougher for one company to keep running a rugby team," they said.

Security company Secom, whose "Rugguts" play in the second-tier Top East League, is an official sponsor of the World Cup and also sponsors Japan's male and female national teams. A spokesperson said that the company expects little financial return for its investment. "Providing such a service at international sports events has a high social value. We hope our corporate value will increase through such projects," the spokesperson said.

Going pro would mean that teams would have to become financially sustainable. The JRFU itself has run a deficit for seven of the past 12 fiscal years.

"Making professional rugby teams will mean that their business will be rugby: They need to make an economic profit out of rugby," said Munehiko Harada, professor of sports management at Tokyo's Waseda University.

"The size of the crowds will be a big factor in determining the success of a Japanese professional rugby team ... It is a question of how to pursue 'Creating Shared Value' rather than 'Corporate Social Responsibility' as it used to be," Harada told Nikkei. "And more importantly, can we really make the revenue and profit to pay for team members? Forty to 50 will be needed per team."

While Kiyomiya claims several teams of the Top League demonstrated favorable responses to the idea of the professionalization of the league, the path does not seem simple. It is unclear if these corporates, who now run their teams, would keep investing in the league through sponsorship. "What we must not do is decrease what I call Rugby [gross domestic product]," said the JRFU's Iwabuchi.

The Top League teams' owners each put in nearly 1.5 billion yen a year, ensuring that top Japanese players are able to earn a wage in the game. "We need to ensure we don't harm players by cutting the funding that has poured into Japanese rugby so far," he said.

Regional appeal

Building an economy around rugby in Japan, where the sport has been established since the early 20th century, is challenging enough. In the rest of Asia, rugby is still a fringe sport.

World Rugby, the JRFU and Asia Rugby have teamed up on the "Impact Beyond 2019" program, which aims to "convert the rugby potential within Japan and Asia." In its literature, the initiative says it will leave a legacy by "developing pathways for players, coaches, referees and volunteers." World Rugby says that about 200,000 children have had access to rugby in schools in Japan since the project was launched, and 1 million players have been created across Asia.

"Pass It Back," the organizing body's program with nonprofit organization ChildFund, is also using rugby to help disadvantaged children in countries such as Laos, Vietnam and Thailand. Rich Freeman, a rugby writer at Japan's Kyodo News, told Nikkei that this is also giving the women's game a boost, as many teachers in these nations are female.

Choosing Japan as a World Cup destination was a "strategic" decision aimed at developing a base for the sport across Asia, says Brett Gosper, World Rugby CEO. (Photo by Ken Kobayashi)

Places such as China and South Korea are coming on "leaps and bounds," according to Brett Gosper, World Rugby CEO. China is currently more focused on the "sevens" version of the sport, where teams field seven players in shorter, generally more action-packed matches, Gosper said, adding that "they still have a long way to go before they are as competitive as Japan."

China's sports industry was worth more than $325 billion, according to data from the National Bureau of Statistics and the General Administration of Sport of China. World Rugby is playing a long game in its moves to tap that market. When selling the broadcast rights to the Japan World Cup in China, the organizers aimed for reach over profit, taking a short-term hit on their television revenues in exchange for giving 800 million Chinese viewers free access to matches via the state broadcaster, China Central Television.

World Rugby has high hopes for the impact of the tournament on the game, including creating 40 million fans and 2 million new players by the end of 2020, and getting another Asian team to qualify for the next World Cup in 2023.

"Our strategy, through the World Cup, is firstly to create a major event in that region of the world, which creates interest, and makes Asian countries feel the relevance of rugby," Gosper said. "Choosing Japan as a World Cup destination was ... a strategic option based on the desire to develop the sport in that country and throughout the region."

For the next few weeks, the long term can wait. Tickets for the World Cup are all but sold out.

The hosts kick off against Russia on Sept. 20. A strong showing for the home team would do more for the Japanese game than almost any amount of corporate sponsorship. The Brave Blossoms are by no means favorites to lift the trophy in Yokohama on Nov. 2, but few would bet against them upsetting the giants of the game for a second tournament in a row.

In a news briefing last week, head coach Jamie Joseph was upbeat, yet realistic, about their chances.

"Our goals are very high. We want to make the top eight in the competition. It's only been done twice in the history of the World Cup by a Tier 2 team," Joseph said. "It's crucial for the ongoing development of the game in Japan that we play a brand of rugby that is exciting and will encourage young players to take up the game."

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