JAKKS Pacific and Round 5: A Model Marriage
Published by Jim Genia on August 11th, 2009 in Memorabilia

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Last week it was announced that toy-making giant JAKKS Pacific and upstart collectible company Round 5 would be joining forces, a melding of the official license holder of all things UFC and the “little guy” who managed to snag agreements with certain fighters early and become a major player within the industry. At first glance the union may raise eyebrows – much like if Zuffa were to co-promote with a smaller promotion. But a closer look reveals more, like business sense and market wisdom. An even closer look and one thing is obvious: the pairing of JAKKS Pacific and their line of action figures and Round 5 and their stylized collectible figurines is more than just an agreement between competitors. It’s a model marriage.

“The thing about this category of business is that we entered into it about two years ago, when the UFC was in the middle of an incredible growth phase,” says Jeremy Padawer, a senior vice president at JAKKS Pacific. “To the extent that the first part of their growth was them making themselves mainstream and repositioning the brand – not necessarily being that brutal, mid-90s Ultimate Fighting positioning but being a legitimate, absolute sport – it really worked. They’ve turned into one of the top four professional sports organizations. With that said, they were focusing significantly on the sport and positioning and not necessarily the merchandizing. So when we got involved we recognized that there would be a little bit of an uphill climb in terms of consolidating the fighters and making sure we could do a representative of a really great line based on a broad grouping of the MMA fighters in the world of the UFC.”

How common are these sorts of deals within the toy-making and collectible industry? “The deal with Round 5 is exceptional,” says Padawer. “They were really early, they signed up a lot of talent, and what we’ve done is carved out a really identifiable piece of our license to them – [and their] non-articulated, sort of ultra-deformed five-inch [product] – and we’re maintaining our status as the master toy. It gives us all the access to the UFC talent, the Round 5 talent. Round 5 gets to use the UFC branding. We’re no longer fragmented. We can go into retail together and have a great statement and not cannibalize each other’s product.”

Adds Padawer: “I think the thing that is uncommon about it is that it’s very rare that a large company works side by side with a smaller company to bring you a significant brand. But I don’t really look at the world that way. It just so happens to be that my job is to bring the absolute best, most broad product I can to the collector community, and if it means I have to partner with Round 5 – and those guys are extremely entrepreneurial and opportunistic and really great dudes to deal with – then I’m totally willing to do it. The result will be that we’ll have a very broad, wide, terrific line. What we’re going to do is pretty much go for every A-level talent you could possibly think of.”

Talent both in and out of the UFC? “I think that’s fair to say.”

One gripe about JAKKS Pacific is that their action figure is somewhat generic and bland, especially compared to the highly-individualized figurines churned out by Round 5. Will they continue with their current action figure design? “I think the model that we’ve had is a successful one,” says Padawer. “But we also have to recognize that the category evolves over the course of time and that we have to be aware of that, and we have to make sure we do the tooling and the investment that’s reflective of a modern-day action figure line. We’ve always been very aggressive to provide a broad line-up and we’ll continue to do that. Authenticity is something that’s always been very important to us, and we’re going to continue to do that. Scales and positioning of product at retail and reaching out to the collector – those are the things that you should expect from JAKKS. However, I think that you can expect us, in terms of figure relative-size to one another and detailed body sculpting, to do better than we’ve ever done before.”

What can fans expect in terms which fighters will be immortalized with an action figure? “Basically, just looking at the top 50 ‘A’ to ‘A-plus’ level talent of all time, we’re going to be 85 to 95 percent of that. We’re way comprehensive now. Without revealing who we’re doing now, I can tell you the objective is to do everybody. That was our objective with the WWE classic line. We fell short of that only because we ran out of time with the licensing. But I think with this one we’re going to have a significant period of time to deliver that to you.”

What’s the duration of JAKKS Pacific’s licensing agreements with the UFC? “I don’t know if I can disclose that, but what I will tell you is that it’s a long-term relationship. It’s nothing that’s going to be in and out. You can expect that we’re going to have the true opportunity to do something that’s very broad and cumulatively represents a significant portion of the UFC, if not everything.”

Does the marriage mean we’ll see JAKKS Pacific and Round 5 products on the same shelf? “Yeah, absolutely,” says Padawer. “This has been a benefit to both companies. Our benefit is that we have a broader assortment of athletes here. There benefit is that they have access to legitimacy with the UFC branding. This has been a win/win for everybody.”

“I think the synergies between the two companies are very, very obvious,” says Damon Lau, president of Round 5, on the union. “I think one thing JAKKS has to offer is them being one of the largest toy companies in the world, and having the distribution channels being made available are fantastic thing. Obviously, the UFC license was a very big thing. I think, more importantly, what we have is a non-competitive product. The two companies really address different segments of the markets. That being said, when you look at the whole product category, yeah, it’s a mixed martial arts collectable, but I think there’s a strong differentiation between what we’re doing and what JAKKS is doing. JAKKS is going to be focusing on a play-collectable category, so it’s for people who want to relive their whole MMA experience with their action figures. Ours are geared more towards display collectables, meaning that they’re more for the typical fan or sports guy who wants to have a collectable of their favorite fighters sitting in their cubicle or sitting in their collector’s case. I think there’s really just a different focus, and more importantly, we get to share talent now. Sharing talent and sharing the UFC license is a fantastic thing for the fans, because in the end, now everyone – depending on what type of product you want to have – you get to have the characters that you want. I think it’s a win/win scenario for everybody.”

What does the future hold for Round 5’s product line? Says Lau: “From our first series to our more recent fourth series coming out this month, the style has really advanced quite a bit, so what you’re going to see is we’re going to be launching right after Christmas a new variation of the six-inch line that we’re currently doing. We’re also planning a ten-inch line, and the ten-inch line is going to be what I’d call a very super-realistic, environmental-type of figure or statue. It’s going to a hundred-percent scale, super-detailed and it’s going to mimic real, historic scenes and iconic images in the sport.”

How does Round 5 develop their highly-stylized figurines? According to Lau, it’s a fluid and interactive process. “It all depends,” he says. “When we worked previously with fighters, we sort of worked with them to decide on the poses. For example, I’ll be talking with Dan Henderson… I was at Xtreme Couture in Vegas, and we’re doing a photo shoot with Dan Henderson, and I go, ‘Dan, what pose do you want to do?’ And he was like, ‘I don’t know. What pose do you want me to do?’ ‘Honestly, I want you to do a pose that I think the fans remember you for.’ And he’s like, ‘Well, everyone always talks about my big overhand right.’ ‘Listen, if that’s how you want to be remembered, and that’s how your fans think of you, let’s do it that way.’ We really sort of broke down the process with every fighter the same way.”

Who can fans expect to see Round 5 make into collectable figurines? “We actually had around 40 different fighters or so readily available to us. Now, I think with both companies combined, we have even a larger group in total. It’s all the top-tier guys who everyone loves, and wants to follow and wants to collect. We really focus towards who we think are the key fan-favorites and the champions of the sport. There’s only so many champions. There’s only so many top-tiered guys.”

The burning question for many in regards to Round 5 is how they managed to swoop in and secure licenses seemingly out from under the UFC and JAKKS Pacific’s collective nose and yet avoid the ire of Dana White. Lau brushes that angle aside. “I think a lot of people overly-criticize the UFC for their business practices,” he says. “Ever since I started this business with my partner and brother Ben Lau, we really just did business the right way. We were never telling people we thought the UFC was a horrible company. We created what I thought was a really good program for the fighters. The intention was never really to sort of snag them away from the UFC, it was really that we had an innovative business idea and the timing of it was such that it was before the UFC had come up with a program with JAKKS. Our goal with our exclusive agreements, they weren’t supposed to be cutting out the UFC. It was more so just to solidify and make sure we were in our market when we launched this product. At the time it was unheard of, so we needed to make sure that, with the exclusive agreements we could be able to give the fighters a good enough program that it would make sense for them to sign on with us. It was never a strategic thing. Dana and Lorenzo are really fantastic guys, their whole team has been fantastic to work with. I think they’re going to be offering us a lot of support in the product category, and as many bad things people have said about the UFC, and as many things people have said about possible rivalries with other companies trying to get into the UFC, I think if you follow good practices and create a good model where you’re not trying to leverage the UFC against themselves and try to make money off them with being up there with your business practices, I think it’s a good thing. I give kudos to Dana and those guys for taking the sport mainstream.”

“I was a hardcore, diehard fan,” says Lau on his humble beginnings. “I was that guy, nine years ago, who would sit at Sherdog’s [website] at three o’clock in the morning because I couldn’t find the Pride fights on satellite TV so I’d read the play-by-plays. I really consider myself that exact fan, so when we came up with this idea for this business, it was really just creating a product that I wanted myself. I’m just a fan of this like everyone else.” Adds Lau: “How can you complain? A diehard fan gets to work with the fighters, work with the UFC, and make toys!”