Horiemonfs Real
Power and his Downfall
Contents
‡T. Livedoor Co. vs. Fuji Television Network,
Inc.
‡U. Horiemonfs Three Types of Melancholy
A.
What is
a Proper Process?
B.
Horie-Bashing by the Media
C.
Misunderstandings
‡V. Horiemonfs Positive Effects
A.
Professional Baseball Games:
Interleague
B.
The
Logic of the Hostile Purchase
C.
Biased
Mass Communication
‡W. Live door
‡X. Horiemonfs Downfall
A. Horiemon at
his Height
B. Horiemon in
the Worst Case
C. Horiemon in
the Future
‡T. Livedoor Co. vs. Fuji
Television Network, Inc.
Almost all of the Japanese were deeply shocked by the news that Livedoor Co. acquired a
number of shares of NBS
(Nippon Broadcasting, Inc.) on
by Asahi-Shimbun-Sha on
the shares which Livedoor Co. purchased reached 50 percent of the whole shares, guaranteeing
the right to vote in NBS. Livedoor President Takafumi Horie, who was nicknamed Horiemon
after a Japanese animated character, Doraemon, by the mass media, hinted that he was going
to control not only NBS but also Fuji Television Network, Inc. Although Livedoor Co. could buy
50 percent of NBSf shares, it was not successful in controlling Fuji TV because Fuji TV made
a strong stand against Livedoor. As a result, the relation between Livedoor Co. and Fuji
Television Network, Inc. was thrown into confusion. The confusion started by Livedoor Co.
continued for one month and resulted in having tremendous impact not only on the stock market
but also on the mass media
in Japan.
However, it was suddenly reported on April 18 that a settlement between Livedoor Co. and
Fuji TV had finally been reached. The following is the ideas of their reconciliation. First, Livedoor
Co. must sell all the shares of Nippon Broadcasting System, Inc. to Fuji TV. Next, Fuji TV must
furnish Livedoor Co. with funds, which means the newly issued shares allotted for a third party.
Finally, Livedoor Co. and Fuji TV must establish a committee in order to carry out a business
tie-up of the Internet and TV business. Although the mass media mostly regard this compromise
as an even bargain, these ideas of the reconciliation seem to be far from what Livedoor President
Takefumi Horie was pursuing at the
beginning.
Mr. Horie stated again and again that the purpose of purchasing NBSf shares was not to play
the money game but to reform the mass media through the tie-up of the Internet and broadcasting
business. He denounced the management of NBS through buying a large quantity of its shares.
Then he closed in on Fuji TV by saying prophetically that the Internet would replace TV in the
future. His assertion, however, was not valued. None of his plans for the reform of the professional
baseball system, the mass media or the stock market was rightly assessed. In the end, I imagine
that some depression was his legacy. The three depressions among his main ones are explained
in the next chapter.
‡U.
Horiemonfs Three Types of Melancholy
@@@Horienmonfs ideal to buy Fuji Television Network, Inc. may have been too aggressive. Also,
his technique in reaching it may have been beyond the understanding of specialists as well as
amateurs of economics. As most Japanese people know, he tried to take part in the management
of professional baseball last year, but an Internet service company Rakuten, Inc. suddenly
appeared in rivalry with Livedoor Co. Finally, Hiroshi Mikitani, President of Rakuten, Inc.,
was chosen as the owner of the professional baseball team by a selection committee. As a result,
not Mr. Horie but Mr. Mikitani acquired the right to establish a new professional baseball team,
which is now called the Tohoku Rakuten Golden Eagles.
The criteria for selection at that time were not so clear, however.
Certainly, more baseball
fans
supported Livedoor Co. than Rakuten, Inc. They were for Mr. Horie because he had
officially
announced his strong desire to get into the professional baseball
business earlier than Mr. Mikitani.
Mr. Horiefs faithful attitude found
wider support among the people. In fact, it was not clear why
Livedoor Co.
could not get into the professional business and Rakuten, Inc. could. Then I
formed
the impression that the selection committee had chosen Rakuten, Inc.
because it is a larger company
than Livedoor Co.
A similar phenomenon happened when Mr. Horie bought the shares of
Nippon Broadcasting
System,
Inc. this year. A great proportion of people had sympathy for Horiemonfs ideal,
but after
some time, Horiemon-bashing was caused by the mass media,
sympathizers of the Fuji-Sankei
Communications Group (including NBS and Fuji
TV). Although his ideal was extremely justifiable,
Horiemon was often
criticized for his informal fashion and misunderstood for his honest comments.
These criticisms and misunderstandings must have depressed him
considerably.
A. What
Is a Proper Process?
As I stated before, Livedoor President Takafumi Horie acquired a great number of shares of
Nippon Broadcasting System, Inc. (NBS) through buying shares in extra hours. Some people
condemned him for the possible illegality of his act although NBS planned to increase its stock
holdings in order to protect the company against the attack of Livedoor Co. After all, it was not
Livedoor Co. but Fuji TV and NBS that acted illegally. The defense plan which NBS and Fuji TV
adopted was judged to be
illegal both by the Tokyo District Court and by the
What Mr. Horie did might have been contrary to commercial ethics, but it was not against the law.
However, those who had sympathized with NBS and Fuji Television Network, Inc. gave a loud cry
that Mr. Horie should have
bought the shares of NBS through a right process.
Their opinions may have been true superficially, but their views
hinted to us that they were
one-sided and malicious. Remember how Horiemon was treated when he
tried to get into the
professional baseball business. He persisted in his
views with a fair and square attitude. In spite of
his efforts, however, his
request was refused by the ownersf conference of the Japanese professional
baseball organization. Finally, a Japanese Internet shopping company,
Rakuten Co., succeeded in
establishing a new professional baseball team
although it departed later than Livedoor Co.
The argument that the professional baseball leagues should be
unified became heated two
years
ago. The owner of the Yomiuri Giants, Tsuneo Watanabe, and the owner of the
Seibu Lions,
Yoshiaki Tsutsumi, emphasized the idea. Then Mr. Horie appealed
to the Japan Professional
Baseball Organization to join the organization by
saying that he had sufficient funds to buy a
professional baseball team. In
spite of his enthusiastic attitude, neither Mr. Watanabe nor Mr.
Tsutsumi
took notice. The Japanese professional baseball leagues continued to assert that
they
would make todayfs two baseball leagues one by combining the Orix
Bluewave and the Kintetsu
Buffaloes. He persuaded the owners of professional
baseball teams in good faith so that he could
become a member of the
professional baseball organization, but his wish was not
realized.
One of the reasons that Livedoor Co. was rejected by the owners of
professional baseball
teams
was trivial. Some owners said that Livedoor Co. had an Internet adult site, so
it lacked
dignity as an owner of a professional baseball team. This was a
horrible false accusation. It is true
that he was always in casual clothes,
but he had never lost his dignity. No. If anything, the prime
owners of
Japanese professional baseball teams were responsible for losing their dignity.
One of
them, the owner of the Yomiuri Giants, Tsuneo Watanabe, resigned his
post immediately for
carrying out an irresponsible act, and another of them,
the owner of the Seibu Lions, Yoshiaki
Tsutsumi, was arrested on suspicion
of insider trading. Were both Mr. Watanabe and Mr. Tsutsumi
qualified to
criticize Mr. Horie? In the end, Rakuten Co. succeeded in establishing a new
professional baseball team by stealing a march on Livedoor Co. This seemed
to have given
Horiemon his first melancholy.
B.
Horie-Bashing by the Media
The fundamental tone of the editorials of the Asahi on the Livedoor incident was not well
disposed to him. For
example, the title of the editorial on
are not equal to the task.h The editorial criticized him for buying shares in extra hours. When
Livedoor Co. made peace with Fuji Television Network, Inc., the editorial on April 19 gave
Horiemon candid advice by making fun of him; Is this also soteinai (within your assumption),
which is Mr. Horiefs hackneyed expression? Of course, the editorial writer seemed to expect
that the idea to settle the matter was not within his assumption. Although I found in advance
that the Sankei and the Yomiuri held unfavorable opinions of Horiemon, I did not expect
the Asahi to hold unfavorable opinions of Horiemon, too. (Horiefs cliche, Soteinai, won a grand
prize of the New and Vogue
Word Contest, Shin-GoERyuko-Go
Taisho, in
1995.)
As stated above, the
Asahi seemed to keep some distance from Horiemon. Furthermore,
some
celebrities having some connection with NBS or Fuji Television, such as Tamori,
Kinichi
Hagimoto and So Kuramoto, declared that they would quit if Horiemon
became the owner of
NBS (and Fuji Television). One day, one of NBSf
announcers abruptly asked Horiemon in a
press interview, gWho owns the radio
station?h He clearly intended to draw the answer from
Horiemon that the
radio station belongs to the investors. This question sounded definitely silly
to me, because the answer is quite simple; the radio station belongs to
everyone including not
only investors but also fans and the staff of the
radio station. The questioner who asked such a
malicious question evidently
tended to attack and look down on Horiemon.
The critical attitude of the mass media against Horiemon had an
extremely incisive
tongue.
A few weeks ago, Ayako Otobe, a public relation staff member of Livedoor Co.,
often
appeared on the TV stage as a responsible person of a public relations
department on behalf of
Mr. Horie. Since she often appeared on television,
Masaru Nashimoto, a famous reporter of
Japanese public entertainment,
reported over the radio that a certain publisher asked her to
publish a
collection of her nude photographs because she was very beautiful. How mean it
was
of Mr. Nashimoto to quote the otherfs words of sexual harassment! The
spreading of such a
groundless story by the mass media seemed to have caused
Horiemon his second melancholy.
C.
Misunderstandings
Yoichi Ito, one of the news commentators of gMorimoto Takuro
Stand-Byh (a morning news
program
of TBS radio) said in the corner of gNews Zoom-UPh that USEN-NET Co., a media
contents company which handles optical fiber systems, would purchase
Nikkatsu Corporation,
which is a subsidiary of NAMCO Ltd. According to the
commentator, USEN-NET intended to
buy Nikkatsu Romanticism Pornographic
Films, Nikkatsu Roman Poruno, rather
than Nikkatsu
Corporation. He explained that Internet pictures were suited
to pornographic films, because it
did not matter a bit even if the pictures
were somewhat blurred. According to Mr. Ito, USEN-NET Co.
would make a
profit by putting advertisements in the Internet blue films. In fact, his
comment on the
radio was nothing but an irrelevant charge against Mr. Horie.
At last, he criticized Horiemon by
saying that the tie-up of the Internet
and movies had been already started by YUSEN-Net Co. and
that Horiemonfs
plan had never been new.
However, it will be proved
later that the business tie-up with NBS and Fuji Television Network,
Inc.
which Horienmon undertook to carry out was not irresponsible but extremely
serious being
different from Mr. Itofs commentary on Horiemon, although his
straight speech and behavior
created some rejection among a number of
Japanese people.
Next, by buying Nippon Broadcasting System Co. and Fuji Television Network, Inc,
Horiemon certainly intended to control the whole the Fuji-Sankei Communications Group.
At the beginning, Horiemon planned to change the Sankei Shimbun into a literally
industrial-economic newspaper just like the Nihon Keizai Shimbun, because the Sankei
Shimbun did not neutrally deal with industry or the economy according to Horiemon. In
particular, the Fuji Sankei Communications Group was well known for their biased media
contents. For instance, a Japanese weekly, Shukan-Asahi (April 8, 2005), reported on a
relationship between Fuji Television Network, which belongs to the Fuji Sankei Communications
Group, and an organized group of gangsters. Horiemon might have wanted to change the media
system of the Fuji Sankei Communications Group.
Horiemon appeared to be planning to change the media contents of
Fuji TV, too. He proposed
that
Internet broadcasting would be effective for mutual communications between TV
stations
and
audiences. It was certain that even the media could not keep up with Horiemonfs
drastic
reform
based on his lofty ideal. The media seemed to have misunderstood Horiemon
concerning
his
investment standing. The misunderstandings of Mr. Ito would become causes of
Horiemonfs
melancholy, just as those of the mass media had already done.
‡V.
Horiemonfs Positive Effects
@@@The mass media shifted the responsibilities of todayfs confusion to Horiemon.
Most of them were caused by some misunderstandings. On the contrary, he produced
good results on various parts of the Japanese community. Although Horiemonfs results
were not yet fully realized, most people did not yet realize this, and describing some of
them clearly will be the shortest way to understanding Horiemon
impartially.
A.
Professional Baseball Games:
Interleague
@@@A proposal to unify the Central and the Pacific Leagues messed up the professional
baseball world in
necessity, had already retired from their posts. When Horiemon offered to buy the Kintetsu
Buffaloes, Mr. Watanabe, boss of the Yomiuri Giants, refused to meet him without giving
any reasons. Although Horiemon was also refused by the owners of the Japanese
professional baseball teams for the reason that his company was not qualified to be an
owner, Yoshiaki Tsutsumi, President of Kokudo Co. Ltd., was arrested on suspicion of insider
trading. In addition, Mr. Watanabe also took responsibility for unfair expenses for obtaining
rookies and left the Yomiuri Giants. The idea of one league miscarried last year through the
downfalls of Mr. Watanabe
and Mr. Tsutsu.
@@@Although Horiemon had failed to buy a professional baseball team, Rakuten Co.
established a new team: the Tohoku Rakuten Golden Eagles. Now most baseball fans are
pleased to have two leagues because they are enjoying the interleague professional baseball
games between the Central
and the Pacific Leagues. For example, the Asahi on
reported that the interleague had made the Central League more exciting. According to the
same newspaper, the Yomiuri Giants rank first, while the Chunichi Dragons are in the
second-lowest position among the twelve professional teams last year. As a result, an article
of the Asahi read that the interleague became very useful for making Japanese professional
baseball games more
exciting.
@@@But just think about it. To whom do we owe our success in the interleague? There was
nobody but Horiemon. The interleague was founded because two leagues were supported by
Horiemon. Thanks to his action, professional baseball fans were able to enjoy the Japan Series
in the autumn as they had been. After all, it was thanks to Horiemon that Japanese professional
baseball games could enjoy both the interleague and the Japan
Series.
B.
The Logic of the Hostile Purchase
@As has been pointed out so far, the dividends of Japanese companies are said to be
extremely low in
Horiemon put into practice aimed to protect stockholdersf benefits. Owing to him, the dividends
of Japanese companies seem to have gone up from approximately ten percent to twenty
percent of the net profit, although those of foreign companies were then said to be about thirty
or forty percent. Horiemon unexpectedly brought out a problem between stockholders and
managers. An answer to this question has not been settled in todayfs Japanese companies.
Managers have to be responsible for making their business more and more prosperous. As a
result, they would not share their benefits with investors. However, Horiemon said that
stockholders should be treated better because they had invested in their companies in order
to support them. Horiemon was one of the pioneers who applied a light to the dark part of
investment in companies. A number of investors, who had been ignored by managers, began
to realize that Horiemon
was protecting their deserved profits.
@On the other hand, executives who had recognized their defects started to protect themselves.
TBS (Tokyo Broadcasting
Station) and
defense policy against the hostile purchase of shares because they were afraid of an attack by
another Horiemon. Although a hostile purchase might be a threat to the management, it seems
to be an extremely useful way to help a company deal with thorny problems. A hostile purchase
of stocks is apt to become profitable not only to stockholders but also to laborers. Most Japanese
mass media has been criticizing the hostile purchase of stocks as a deed without charity or
righteousness even now. However, it was certain that Horiemon gave Nippon Hoso Co. and
Fuji Television Co., Ltd. an opportunity to reconsider their broadcasting contents. Hisashi Hieda,
chairman of Fuji Television Network, Inc., often said, gEverything that is not fun is anti-television;
in other words, all TV programs have to be fun.h I did not want him to say such remarks because
Fuji TV was filled with a lot of rush variety shows. It was sometimes pointed out that some
programs of
root of all evil in broadcasting business exists in his remarks, gTV programs have to be fun.h
Fuji TV, however, continued to broadcast some programs that seemed to be harmful although
they were popular among
young people.
C. Biased Mass
Communication
@Depending upon how you think of it, it may be peoplefs common opinion that all mass
communication is biased. For example, there is a reputation that NHK is prejudiced in favor
of the Liberal Democratic Party, the Sankei is to the extreme right, the Yomiuri is to the right,
the Mainichi stands in
the middle between the Yomiuri and the Asahi and the Asahi is liberal.
@Now, allow me to examine ga PR versionh (an advertisement page) of the Asahi published
in the summer of 2004. The version definitely worked out the standpoint of the Asahifs editorials.
The newspaper pointed out differences among them in the column of the same page. It said, gThe
assertions of editorials are not the same. Namely, they are often keenly opposed to each other.
The Asahi has sometimes been in opposition to the Yomiuri and the Sankei, and it has lately been
varguing against some issues such as approval or disapproval of the Iraqi War, dispatching the
Self Defense Forces to
flag at graduation ceremonies and so on. It was my decision that the Asahi had mostly judged the
right conclusion concerning these issues. For this reason, if I had enough money to buy the
Yomiuri Co. or the Sankei Newspaper Co. Ltd. I would like to change them into more liberal
newspaper companies just
as Horiemon tried to.
@While I was thinking over biased mass communication, I came across a terrible article which
was written by Motohiro Takahata in Yomiuri Weekly (May 5-15, 2005, Vol. 2971, p. 92). He
blamed a court of justice for turning a blind eye to future evil because of its wrong judgments.
In fact, the dispute with Livedoor and Fuji TV about issuing a large quantity of tickets to reserve
new stocks was approved by the Tokyo High Court as well as the Tokyo District Court. However,
Mr. Takahata wrote, gThe administration of justice was defeated by Horiemon.h Additionally, he
made a false charge
against the judicature by quoting Tatsuo Uemura; professor of
after fashion. If NBS and Fuji TV complained about it as he wrote, they should have appealed
to the Supreme Court. Although they gave up such an effort, how regrettable it was for them to
comment on the judgments
of the Tokyo District Court and the Tokyo High Court. What was
exceedingly
important here was the oppression by mass communication which would be capable
of any crime to destroy
the judicial community so as to hold out their own
views.
‡W.
Livedoor Co. vs. the Sankei Newspaper
@The report of AERA (A weekly published by Asahi Shimbun Co.) on February 21 in 2005
was the beginning of the dispute between Horiemon and the Sankei Shimbun. The headline
gHorie is Plotting to Control the Fuji-Sankei Group (though Horie and Horiemon is a same person)h
was radical enough to shock them terribly. According to the report, after Horie made introductory
remarks that the following was his private opinion, he said, gThose groupsf opinions are out of the
ordinary and Ifd like to strengthen the entertainment aspects of those groups.h His expression,
however, touched the heartstrings of the Sankei Shimbun. The Sankei lost no time in refuting
Horiefs opinion in the editorial of the same newspaper on February 18, the title of which was,
gDo you really mean to control the SANKEI? How about saying it after considering for a minute?h
It seemed that the tendency of the editorial was to get extremely
carried away by their feelings.
@The editorial asserted, taking a highhanded attitude, gIt is needless to say that the Sankei
has been based on seiron-rosen,h which means an anti-communism line. Anyway, the assertion o
f the Sankei is nothing but treasuring their creed. Frankly speaking, Mr. Horie intended to change
this line seriously. That is why he proposed that the Sankei should be an industrial and economic
newspaper such as the Nihon Keizai Shimbun. Considering the recent dispute between the Asahi and
the Sankei, Horiefs statement seemed to be right. For instance, the Asahi published a PR version of
the newspaper last year. According to this, the Yomiuri as well as the Sankei entirely objected to the
Asahi over various kinds of controversial social and political issues such as the national anthem and
flag of
self-responsibility of
abducted people in
were based on seiron-rosen. They were heading for a revision of the Constitution, denouncing those
who were against the Iraqi War and forcing teachers to stand up in front of the Japanese flag and
sing the national anthem in unison just as before the war. Honestly speaking, their opinions,
seiron-rosen, were apt to be right-wing. Horie seemed to have objected to those of the Sankei and
the Yomiuri. The said editorial declared, gNeglecting seiron is nothing but blaspheming against
180 authors of the large-scale column.h Was such a comment a cool-headed refutation against
the Asahi? Horie has no longer asserted his plan to alter the Sankei Shimbun since Horie-bashing
had begun.
@After that, the Sankei was extremely persistent in blaming Horie. On February 18, the Sankei
used the interviews with a powerful politician, Yoshiro Mori, and the president of Mitsubishi Shoji Co.,
Mikio Sasaki, against Horiefs overtime dealing with stocks. What was worse, Shinichi Sanofs
contribution in the form of talk was beyond general logic. The title was gA rare animal causing
the suspicion of the mass media.h His conclusion was anti-logical and filled with malice. He proclaimed
in his column, gHoriefs next generation media is just something like putting a pair of glasses which a
TV personality is wearing up for network auction. Horie has only a low level awareness of the
next-generation media.h In addition, he also declared, gHorie has no ability or philosophy to answer
difficult questions to the Internet.h His remarks were quite irrelevant and just seemed to intend to
abuse Horie severely. The dispute between Horie and the Sankei is nothing but a terrible offensive
and defensive battle beyond all proper
logic.
‡X.
Horiemonfs Downfall
A. Horiemon at his Height
@Horiemon caused some social phenomena, one of which was to have given dreams to young
Japanese people. For example, there was a growing tendency for them to begin to begin to
promote an undertaking. The Asahi reported on
one of the Japanese famous national universities, began lectures on starting an enterprise for
university students. According to the above newspaper, twenty students and five adult members
of society, from their thirties to their seventies, attended gLectures on Starting a Business of
Communityh in 2005. In fact, Horiemon established On the Edge Co. Ltd. with a capital of
600 million yen while at
Livedoor Co. Ltd. Encouraging young people to start an enterprise may be one of Horiemonfs
good influences.
Moreover, another of
Horiemonfs careers was that he came forward as a candidate for
the House of
Representatives in 2005. He contested a seat in the House of Representatives
with Shizuka Kamei, a
veteran member of the Diet, in a
Mr. Kamei had been
criticizing the Koizumi Administration, the mass media called Horiemon
as a rival candidate shikaku, which means an assassin. Almost
all of his attempts, for example,
entering professional baseball teams as an
owner, controlling the management of Nippon
Broadcasting, Inc. and Fuji
Television Network, Inc. and standing for the Diet, were unsuccessful.
However, a number of his supporters admitted that his every challenge had
been trying to break
down the old Japanese system and to carve young
peoplefs way to fortune. Unexpectedly, a
terrible thing happened to
Horiemon, who seemed to have exceedingly smooth sailing as a
young
businessman.
B. Horiemon in the Worst Case
gAlmost all of the
Japanese were deeply shocked by the news that c.h Do you remember
this sentence? To tell the
truth, this is the sentence at the beginning of this essay. However,
on
writing the end of this essay, almost all the Japanese were more deeply shocked by the news
that
Horiemonfs home and the head office of Livedoor in
investigated by the special investigation department of the
office on
His He was arrested on suspicion of
breaking the stock exchange law. Ryoji Miyauchi, director,
Fumito Okamoto,
director and Nagaya Nakamura, company president, were captured with
Horiemon, who was arrested again for a false mention of a report on
securities (an act to violate
the stock exchange law) with Fumito Kumagai,
representative director, on February 22.
All the arrested suspects were imprisoned in Tokyo Prison, whose
previous name is Kosuge
Prison,
where the late Kakuei Tanaka was imprisoned thirty years ago. Okamoto was
released
on bail on March 16, Nakamura on March 17, and Kumagai on April 5
because all of them
admitted the allegations by saving that they had
committed a crime according to Horiemonfs
instructions. However, Horiemon
never admitted the allegations, so he was the only one that
was imprisoned
until April 26.
C.
Horiemon in the Future
Horiemon is still pleading not guilty to a criminal charge. His main crime was the false
representation on valuable papers which Livedoor Co. Ltd. had possessed. It showed a loss
of about 313 million yen in September 2004, but the above company made a false report
that it brought a profit of more or less 5034 million yen. In addition, Horiemon was felt
to be under suspicion: Gikei-Torihiki, deceptive dealings to betray investors and Fusetsu-No-Rufu,
and starting an ungrounded rumor in the stock market. Horiemon is to be on trial in the future.
He will go to court over the above-mentioned suspicions. It is said that Horiemon is preparing
for a public trial. He is now an accused person. To view a matter objectively, his trial seems to
be harsh. However, judgment has not been delivered on Horiemon yet. His future is still in
the gprogressive form.h
Lastly, I have to apologize for calling him Mr. Horie, not
defendant Horie in this essay.
Since
the most part of this essay was written before Horie was arrested, I did not
want to lose
Horiemonfs good aspects. Furthermore, I did not want to call him defendant
Horie in order to
avoid complexity.