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What is the price of a BJJ belt promotion?
I am relatively new to Brazilian Jiu-jitsu. I have been training for roughly 18 months. I recently received word that I would be promoted to blue belt and that the price would be $250. Say what?! I thought the price had already been paid in hard work, monthly membership dues, pain, perseverance, and respect. Apparently not. This brings me to a question then. What is the price of a BJJ belt promotion, and is it right to add a cash value to it? Since it seems that line between the gentle art and business is increasingly becoming blurry. I will present a business analogy and later relate it to the practice of charging high BJJ belt promotion fees.
How are prices determined in business/stock markets?
I come from a finance and economics background. Much of my coursework in college and professional work involve studying and applying methods for determining the price of a financial contract such as a mortgage rate, stock, bond, stock options, etc.
Suppose a financial asset which we will call A pays its owner $100 each month for 3 years whenever the S&P 500 Index is above 1900. Now suppose that I know of a way to create an Asset B with the same exact pay out structure and timing for a lower price than asset A. I can then create asset B and sell it at the price of asset A until other market participants realize how to do the same thing and drive the price down. I can know with surety that the price of A will come down as other market participants create similar assets for a lower price. This is referred to the rational pricing theory.
In other cases an approximate price can be found by looking at comparable assets, I will call this the Comps method. For example, if I wanted to know if it was a good time to purchase stock in Caterpillar, I would likely want to look at its financial characteristics in comparison to Komatsu, John Deere & Company, etc. In simplistic terms, if I found that Caterpillar was financially sound, had a price to earnings ratio lower than or similar to its competition, and the construction equipment industry had good prospects, I might be inclined purchase Caterpillar stock.
Relating the business/stock markets analogy to Jiu-Jitsu.
Suppose we are new to jiu-jitsu and we are going to evaluate three schools in our area which we will call A, B, and C. How do we choose? We most likely use the Comps method from above. We look at their characteristics. How nice are their facilities? Is the instructor well-known? What is the gym culture? How well do their competitors perform? And probably one of the most important characteristics for a new person is the price. At this moment suppose gyms A, B, and C are all quite similar. They have nice facilities, great instructors, high performing athletes, and cultures of camaraderie. However, gym C has a lower price. Based on your comparable analysis, you choose gym C.
Time for self-reflection.
Time progresses, you train regularly, work hard, lose weight, increase your cardio, become stronger, get submitted countless times, learn to defend yourself, and on occasion you are able to submit and control some of the higher ranked students. Based on this hard work you receive word that you are being promoted to blue belt. Then you find out that your promotion will cost you $250.
You may wonder the following.
- Is the professor promoting many of these people to make a year-end bonus? You may wonder why some of the others being prompted are moving up. You have rolled with them and know that there skill level(s) and/or work ethic are not admirable. Am I really ready or am I just augmenting his bonus?
- Wow, it’s back to school time and I have to buy clothing and supplies for my children, can I afford $250 right now?
- Why didn’t the professor tell me about this up front? I made my decision to join gym C in large part because of the price. Now I know that the monthly price is really much higher than I had thought.
- Are gyms A and B charging outrageous promotion fees?
- I really don’t want to pay for my belt promotion. I feel like I truly earned it on merit. I feel like it taints the art. If I go to gym A or B will I have to spend another year or two before receiving a promotion? What do other gyms think of my belt? Do they view it as a cracker-jack toy that I had to pay for?
- How can my professor put a high monetary price on something I that I’ve already earned based on merit and hard work? Is it because he/she knows that I want it so badly that I will probably pay for it in spite of the price?
After reading these questions do you think the practice of charging high promotion fees is ethical or does the gentle art justice? Probably not. And based on the rational pricing theory described above you can expect that if gyms A and B are not charging outrageous promotion fees, they are going to get more students as the word gets out. And if gyms A, B, and C are all charging promotion fees, some disaffected brown or black belt may create gym D which doesn’t charge outrageous promotion fees. Gym D would be, in a sense, offering a similar benefit/payout/product for a lower price.
Ok, so when is it ok to charge for belt promotions?
At this point some of you may be saying, “Well I paid for my belt promotion and nothing in life is free. To this I say, “I agree that nothing is free and furthermore not all prices are monetary”.
So what does it cost a gym to hold a promotion ceremony? Is the gym paying to fly in a special guest black belt? What does the actual belt cost? Is there a big BBQ or diner accompanying the event? Is there an added belt evaluation test which requires extra time from the professor? In my opinion there may be merit to these types of charges. But maybe these should be baked into the monthly dues. Additionally gyms must recognize that there are market forces out there and in a growing sport, gym D is always ready to emerge.
No revenue stream should be tied to promotions! Charging BJJ belt promotion fees taints the art by creating doubt, preying on student’s emotions and desires for progress, and by creating an incentive to promote students for monetary reasons.