A pop-star sex scandal shows the death throes of old Japan

In many respects, the sex scandal that has gripped Japan in recent weeks feels familiar. The hallmarks are all there: the resignations of senior leaders, the accusations of cover-ups, the news conferences where panels of graying male executives bow deeply to the cameras.

But this affair — which culminated in a grueling briefing Monday, with executives of Fuji Media Holdings grilled by a crowd of increasingly hostile reporters for more than 10 hours — also reveals that many things in Japan are experiencing growing pains.

That includes attitudes toward celebrity, sexual harassment and the importance of crisis communications — and perhaps above all, the growing role that outside investors are playing in keeping Tokyo’s boardrooms on their toes.

The affair centers on Masahiro Nakai, one of Japan’s most famous pop stars turned TV hosts. As the leader of a now-defunct boy band called SMAP, the 52-year-old has been a ubiquitous mainstay in Japanese life for decades. He and his fellow former bandmates host TV shows, appear in commercials and star in dramas and movies; the group’s lyrics were referenced in speeches by the late Prime Minister Shinzo Abe. The group was the brainchild of Johnny Kitagawa, Japan’s greatest music mogul — and a man who, following his death in 2019, was found to have sexually abused hundreds of young boys.

In allegations that first emerged in tabloids last month, Nakai is accused of sexually harassing a female Fuji TV employee. The details of what has been euphemistically referred to as "trouble” with the woman haven’t been made public, though he is reported to have made a settlement of ¥90 million (almost $600,000).

Nakai, who resigned from the entertainment industry last week in the wake of the allegations, has admitted to some form of incident and reached a settlement with the unidentified woman, but denied suggestions that he committed assault. Further reports alleged that the meeting was brokered by a Fuji TV employee, a type of matchmaking between male celebrities and female personalities that is said to be commonplace. Fuji executives on Monday denied this.

So far, so sadly typical of scandals in an entertainment industry that ranks among the world’s largest and is still reckoning with the post-MeToo era shakeout. But this affair has some substantial differences.

First is the fact that Fuji counts among its shareholders U.S.-based Dalton Investments and British affiliate Rising Sun Management, which collectively own some 7% of the media conglomerate. The funds, which have been pushing Fuji to conduct a management buyout, wrote to executives early in the affair demanding a swift investigation.

That took Nakai’s wrongdoing from the tabloids to the business pages, and in doing so revealed another change. Savvier business leaders than those at Fuji quickly pulled their commercials from the network, suspending their ties with some of Japan’s most beloved shows.

Within days, most major firms had canceled their ad spending, with commercial breaks on the network limited to public-service advertising for health checkups and the like. The only firm I recognized during one recent break was for a hot yoga studio that generated controversy for asking customers vaccinated against COVID-19 to stay out of its gyms for fear of virus "shedding.”

The ad boycott immediately upped the stakes at Fuji, which depends on commercials for most of its revenue. But the company’s first attempt to handle things was a disaster: a closed-door, camera-free news conference that Rising Sun described as a "car crash” and "an object lesson in how not to handle crises.” The response was particularly galling given that Fuji is itself a media firm that conducts journalistic investigations.

As the pressure intensified, two senior executives (head of TV Koichi Minato and Fuji HD Chairman Shuji Kano) resigned. That was followed by Monday’s exercise in overcompensation, with exhausted executives grilled until 2 a.m. in what was more akin to a struggle session than a news conference. Ironically, it also got some of the best ratings Fuji is likely to see this year.

The episode underlines how swiftly attitudes are changing in a country frequently mischaracterized as static. With one of the oldest boards in the country — an average age of 71, according to data compiled by Bloomberg — Fuji’s executives have appeared ludicrously out of touch with everyday attitudes.

It also shows the difference in the speed of reaction between the Old Japan, represented by Fuji’s deer-in-the-headlights initial response, and firms from the New Japan which pulled their advertisements immediately. Crisis communications is something that few Japanese companies currently do well. Let the 10-hour grilling of Minato on live TV serve as a lesson to those who don’t appreciate it.

But more than anything, this episode exposes the role that changing corporate governance standards are playing in Tokyo’s boardrooms. The influence of Fuji’s foreign shareholders forced many, including me, to take notice of something we first dismissed as mere tabloid fodder.

The days of compliant shareholders who would at most raise concerns behind closed doors are over. And the firms being left behind will have to catch up fast. It’s telling that Fuji only appointed its first female board member, herself a company lifer, fewer than two years ago.

Questions are also being asked of its broader board makeup, including the role of Hisashi Hieda — the former chief executive now nominally an executive managing adviser, but who is in fact a media heavyweight understood to be the real power at the firm. His absence from Monday’s conference has only increased the pressure.

Not every change should be welcomed. Japan’s old media has been rightly criticized for past failures such as its inability to hold Johnny Kitagawa to account. But as that legacy dies off, Monday’s news conference revealed some of what will replace it — YouTubers and self-proclaimed citizen journalists, many of whom seemed to be chasing clicks by berating executives rather than seeking answers. We’ve seen in other countries that this shift doesn’t necessarily lead to a more informed future.

The full implications of this scandal have yet to be revealed. But we can see already the death throes not just of Nakai’s career and perhaps even Fuji itself, but of an old corporate Japan whose time has passed.