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James Denton |
Jakks Pacific's Jeremy Padawer talks the new UFC and TNA toys, and losing the WWE license after 14 years…
Jeremy Padawer is something of a legend among action figure collectors. Known for being as much a toy geek as somebody who actually manufactures toys, he has taken the professional wrestling action figure category to new levels of both collectibility and profitability.
Marketing as much to diehard toy enthusiasts and wrestling smarks and as the toyshop browser, he has been key in introducing such iconic lines as Classic Superstars, grossing millions and millions of dollars for the WWE brand.
However, despite working together since 1996, Jakks will be parting ways with World Wrestling Entertainment in 2010, leaving the door wide open for two new – and potentially far more exciting – licences: the UFC and TNA. We took a detailed look at some of the UFC prototypes and asked Jeremy what the future has in store for Jakks and its new tag team partners…
FSM: Here’s a curveball for you to kick things off. It’s been a really rough time recently for the global economy, especially in the United States with the weakened dollar. How does that affect you guys as part of the manufacturing industry?
Jeremy Padawer: Everything is impacted. When raw materials go up it affects the entire chain, so one thing we have to deal with is – our fiduciary duty is to the shareholders, and we have to deliver profitable lines or we won’t be in business. So it affects us dramatically. However, I will say that we have really good long-term factory relationships – and in times like this, having long-term relationships can benefit tremendously!
Last month you announced the start of another long-term relationship, with the UFC. Just how big a deal is it for the promotion to sign a deal like this with Jakks?
Well, I think for the UFC it brings them into a new era in terms of being accepted into mainstream retail and consumables. If you look at the past, originally as it was positioned in the marketplace, the UFC was an anything goes-type sport. And the problem with an anything goes sport is that, although you may be reaching out to a niche group, it’s very difficult to go beyond that.
And the UFC saw the results of being anything goes, by having quite a downturn due to distribution issues, and the morality issues that some people impose. And frankly, it wasn’t the right business model. So ultimately they made the switchover to being very much a rules-based sport, and it’s taken a few years but the result of that is the perception of what the UFC really is has changed.
So I think it was absolutely time for a major manufacturer to basically show the world that the UFC is as legitimate a sport as the NFL, MLB, soccer or anything else. And I think you’re also seeing that in terms of the adoption of the consumer; consumers are embracing the UFC around the world. For example, Michael Bisping has become – I can’t say a household name, but certainly among people who enjoy MMA he’s a household name. The mainstream sports fans have really opened their eyes to it.
It would have been impossible, just five years ago, to think that the UFC would have product sitting on the shelves in Toys R Us. But why, specifically, is Jakks Pacific a better partner than one of the other big guns, like Hasbro or Mattel?
I think it’s a few things. Number one, we’re exceptional when it comes to brands that tend to reach out to the adult collector. The UFC action figure brand will primarily be a collector brand, and unless you understand the action figure category, that may come across as a little bit surprising. The action figure category is about a billion and a half dollars at retail, and around 35 per cent of the intended recipients are males aged 15 and older.
And if you think about it, it’s amazing that the intended recipient has age-graded up that much – especially in a world where videogames are so important to the older-aged consumer. But unlike the rest of the toy industry, where age has basically contracted and become younger, the action figure world is really more like the comic book world, in that a lot of the brands reach out to the older-aged consumers.
So, a) we’re specialists at that, and b) in terms of distribution, Jakks Pacific is now the third largest toy company in the US, and internationally our reach is very strong. So for Jakks – with a proven track record in the collectible category, specifically action figures – to take on a major brand is not too much of a reach.
As you noted, there are people who don’t understand the action figure category and things like the McFarlane line that are very much collected by adults. Those people might criticise the UFC – as they often do WWE – for marketing a violent product towards children.
Well, in terms of marketing specifically to children I don’t think that’s going to be our objective. Our objective is to reach the UFC consumer, who tends to be a little bit older. The reason it makes sense for us is that we have the mentality and in-roads to these consumers, and we’ve delivered many action figure products over the course of a long-term relationship with them. So for us, taking the risk with the UFC was a no-brainer.
Now, in terms of reaching out to kids, I would note that if you line the UFC up against, for instance, the NFL, that’s a pretty violent sport – when you watch men who are 300 pounds colliding into one another at very high rates of speed, the damage that can be inflicted in one second is so much greater than what can happen to an MMA athlete over the course of an entire career.
No one ever questions whether the NFL is appropriate for children; however, when it comes to fighting, people may feel that the objective is more violent. And I can understand that someone might have that objection. So the best thing I can say for those people is, change the channel!
Looking at the specifics of the UFC product line, we’ve obviously got action figures and playsets to go along with them, and we’ve also got “role play items”. What does that specifically entail?
That’s a little more of a longer-term scenario. We would potentially like to do some replica belts, that sort of thing, but the bread and butter of it is simply gonna be authentic character action figures, as well as various degrees of authenticity applied to rings.
So we’re looking at different price points based on different levels of detailing?
That’s exactly right.
We know that the first wave of figures is going to include guys like Bisping, Brock Lesnar and Chuck Liddell. Are there any other names you can divulge or is it all under lock and key at the moment?
Lock and key at the moment – but only because there is some potential variability in terms of when they will be released and in terms of finalising opportunities right now. But our objective – and this is what anyone who’s collecting into this line should ultimately know – is to be as complete as possible. We want to have the defining mixed martial arts, UFC line ever. So 20 years from now, I’ll fell like I’ve done my job correctly if people can say, “That was the most complete, authentic UFC line of figures ever.”
On that note, Round 5 has launched its own line of independently licensed action figures with guys like Quinton “Rampage” Jackson and Randy Couture. What sort of potential conflicts do you see existing between the two lines?
Well, the Round 5 is not necessarily an authentic style action figure; it’s more of a [super] deformed, cartoonish take. But they’re very good – I have to say that I’ve enjoyed them, I’ve seen them, I like them. But I have no concerns – they’re not really going after the same distribution channels and they’re not necessarily going after the same style that we’re going for with our product line.
We’re going to have fully playable, really authentic-looking characters. But I think their positioning, certainly I’ve identified them as being something worthwhile – good for them, and I wish them all the best.
In terms of the way Jakks handles the UFC line, we know from your wrestling products that you do a lot of two-packs, themed pay-per-view assortments and so on. Will you employ a similar model here?
Probably not immediately. What you’ll find is that we’re gonna be focusing first on delivering the individual characters, and then ultimately we’ll graduate to other things like the two-packs et cetera. But the initial focus for me will be that we don’t over-proliferate SKUs [product lines] right off the bat. I think what we need to do is be reasonable about what we expect the consumer to take on initially, and build it accordingly.
If the demand is there for two-packs and exclusives for each [retail] account, we’ll go that route. But what’s more important to me is to have a long-term brand at retail. I’m not the type that wants to blow something out unless it merits it at the time. I’d rather have a smaller group of collectors over a longer period of time than something that’s a fad and over in six months.
Something that’s caught the eye of collectors is the idea of a ‘UFC Classics’ line similar to the WWE Classic Superstars. It’s obviously a great concept, but how much of a headache does it create when, say, the Shamrock brothers are both signed to rival organisations?
We’ve had a very similar experience with our existing Classic line, in terms of dealing with individuals. And there is a great benefit to not being able to sign all the ‘A-level’ guys immediately; that temptation to put out the A-level, everybody’s-recognisable assortment right off the bat goes away, and that allows you to do a more complete line.
I like dealing with individuals, because what happens over the course of time is that you do end up signing everybody, but it enables you to do such a broader line in the meantime. There are plenty of guys who’ve never held a championship that are worthy of an action figure but, if you’re just focused on the guys that wore a belt, you’ll blow through that line very quickly.
Everything that you see from me in terms of managing this division has been to think about long-term businesses. And one key aspect of managing a long-term action figure business is to calibrate your line to not have all your best characters at once.
Parallel to the UFC line, of course, Jakks has also acquired the licence for TNA, starting in 2010. How exciting is it to be working with “new clay”, as it were?
It’s very exciting. What we basically have is a scenario where there won’t be any TNA product on the marketplace for two-and-a-half, almost three years by the time we get the licence. And with all due respect to the company that managed it prior [Toy Biz], we have a different perspective.
We go for authenticity, and a balance between playability and authenticity. We don’t like to pack features into an action figure; we like the action figure to be controlled by the consumer. And practically everything we put out will be on-shelf for the very first time – that’s going to be very compelling.
And going back to the idea of completion, this is going to provide you with the opportunity to explore different characters – like, dare we say, a Randy Savage – that you were never able to work with before.
[Pauses] It’s an… the possibilities have opened up, let’s just say that. The possibilities have opened up.
Taking a guy like AJ Styles, who’s had so many career phases – from the indies to WCW, ROH and TNA – you’ve got all these characters now that are just prime for Jakks lines.
Oh, it’s really great – from my perspective, we’ve had the WWE line for a long time and we’ve put out most of the characters you could ever imagine. And this gives us a whole new opportunity to start with guys that we’ve never been in position to do. Just from a fan perspective, that’s really exciting.
We talked about the strategy with the UFC line, maybe holding off on some of the themed releases, but will the rollout be different with TNA being a wrestling brand? Two-packs like Kurt and Karen Angle seem like obvious hits.
I think so – with TNA, and specifically the category of wrestling action figures, it’s something that is well understood. There’s going to be a little bit of a ramp-up in terms of getting the MMA fan into collecting action figures – the sport is new, so it took time for the adoption of the sport, and then the consumables are gonna take some time as well. But with TNA being in a category that’s already well understood and collected, there’s going to be the opportunity to reach a little bit deeper and broader right off the bat.
We’ve already seen the prototype for Dana White, who’s a key part of the UFC line…
Well, he’s gonna take a heavy beating sometimes and other times he’ll lay a heavy beating on someone else! I’ll be very interested to see those YouTube videos because, with all due respect to Dana, it’s completely out of his control when he’s six-and-a-half inches tall. It may be the opportunity for some payback!
Grudges are definitely going to rear their heads! On those same lines, with the TNA range, are we going to be looking at a Dixie Carter or a Vince Russo figure at some point?
Yeah, again, as far as I’m concerned we go very deep – we’re not looking to put out the top six guys and then call it a day. Dixie and Vince and all those folks are critical in running that organisation, and they’re well known. So I wouldn’t at all be surprised to see them in the assortment to some extent.
There really is a company ethos you’ve instilled, to cater especially for the hardcore collector – like the ‘LJN-style’ Classic Superstars, which collectors go crazy for but most fans are probably baffled by. Is it safe to say that same ethos will be in place with the new lines?
[Laughs] Yeah! And you know, that was really sort of an insider – a way insider – indicator. It’s almost like you’re nudging your friend and going, “Did you get that? Do you understand what we’re doing?” And you know that 95 per cent of people aren’t gonna get it, but my belief is that if you really embrace the five per cent – the people who are going to be with you forever – that’s the most critical part of your brand. So that’s what I hope to carry forward.
We’d be remiss if we didn’t ask your thoughts on what will be the end of a 14-year relationship with WWE, which saw a period of phenomenal growth for both companies.
It’s really been great, and I can only speak from managing the brand – I can’t speak from a corporate perspective. But from a brand perspective it’s been a very good relationship, and we’re motoring – we’re going to continue to put out a great line through the end of our contract term.
Obviously it’s disheartening to lose the WWE licence, in that it’s been such a stable, long-term brand for us – and for me, specifically. But we moved very quickly into the circumstances that we have, and I believe that TNA and the UFC are just exceptional. And I give myself a feather in my cap for sort of putting the plan in place to make a very quick comeback from the loss…
For the rest of this feature, check out issue 31 of FSM – available at WH Smith and all good retailers. (For US readers we are now carried at Borders and Barnes & Noble, so check for local availability or click here to subscribe.)
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