China and the World

Koch’s grand vision

Sports diplomacy on display as Aussie Rules Football debuts in Shanghai

Koch-w

Adelaide’s chairman David Koch with team captain Travis Boak

“Excuse me, but what’s a ‘behind’?” asked the Chinese student sitting next to WiC’s man at the first-of-its-kind clash in the Australian Football League in Shanghai on Sunday.

Your correspondent – who is not an Aussie – was stumped but fortunately two farmers from Queensland saved the day, describing it as the point scored when the ball is kicked between one of the inner and outer posts at either end of the field (a ball kicked through the inner posts is a ‘goal’ and scores six points).

The conversation was typical of a cross-cultural afternoon at the first Australian Rules Football match to be played outside Australia and New Zealand where the result counts in the professional league at home.

Port Adelaide trounced the Gold Coast Suns 110-38 to move to fourth in the standings, much to the delight of the thousands of diehard fans who had made the trip to China from Adelaide.

For the locals it was a novel experience and they seemed to enjoy it, especially when the hits between the players were hard enough for the sound to reverberate into the stands.

“That’s called shirt-fronting,” was the ambitious explanation from one of the Queenslanders to his Chinese neighbours, after one of the shuddering clashes.

The shouting, collar grabbing and chest bumping on the field was another favourite, prompting hilarity among the Chinese in the crowd. “The taxi drivers here do that as well,” another of the students told WiC.

Spectators weren’t allowed to take their beers to their seats but otherwise everything seemed just about perfect. The sun shone, but the breeze was cool. The playing surface looked immaculate – an impressive feat for a venue that was a golf driving range a year ago.

“We see this as sports diplomacy and as a great way of deepening the relationship between our two countries as trading partners,” David Koch, chairman of Port Adelaide, told WiC the day before the game.

Koch arrived at Port Adelaide four years ago and he talks openly about being a disrupter in what is a proudly traditional sport. “We knew we had to look further afield and build revenues that weren’t tied purely to on-field success,” he explains. “So we developed the idea of bringing Chinese businesspeople with commercial interests in Australia to our home games.”

The club puts their guests in corporate boxes and pipes in match commentary in Mandarin. That brought in the first major partner, the Shanghai real estate magnate Gui Guojie (Gui’s Australian investment partner is Gina Reinhart, who was also at the game on Sunday). Koch says that Gui was the first of the Chinese partners to “fall in love with the sport” and that other sponsors have signed up since. “Our message is simple,” he says. “If you’ve got business interests in Australia and you want to find a way to connect with the community, do it through football and do it through Port Adelaide.”

Bringing the two teams to Shanghai cost about A$4 million ($3 million), although the event will break even on backing from companies like Ausgold and MJK. That brought a harder-edged commercialism to proceedings and three Chinese channels aired live coverage of what promised to be the most watched AFL game in history, far in excess of Grand Final day at home, which normally gets about four and a half million viewers.

Australian brands were keen to grab the opportunity and advertisements for almonds and wine, natural skincare and university education played on loop around the stadium.

Port Adelaide has the exclusive rights from the AFL to play more matches in China over the next five years but its commercial strategy extends beyond the games themselves and it has cast a wider net in its sponsorship of the sport in China, supporting Team China in the AFL’s International Cup competition and offering financial backing for clubs and training programmes in three Chinese provinces.

But while sport is a fundamental part of the Australian identity, it has been less of a priority for the Chinese in the past. Koch agrees with that premise but he says that sports, health and wellbeing are becoming more important to Chinese policymakers – President Xi Jinping is a huge sports fan – and that businesses with sporting expertise are well positioned to capitalise.

One area of focus for Port Adelaide is high-performance coaching and sports science, where AFL teams are leading practitioners. The club’s high-performance unit has four PhDs and three PhD students and it has just announced a deal with Shandong University and the Shandong Sports Commission to set up a facility where the Chinese will send students for training.

“In simple terms, we all know that the Chinese want to win the soccer World Cup and that they are building 50,000 soccer schools to boost the grassroots. We think we can be a part of that,” Koch explains. “Our venture is targeting these kinds of institutions and we’ll help them with programmes that improve coaching and sports science at sub-elite level.”

Koch’s day job is as a television presenter and he runs another business advising small and medium size companies. Too many of these businesses think that exports to China are about the biggest companies selling coal and iron ore, he says. But he wants the smaller firms to spend more time focusing on customers there, perhaps by selling their products to Chinese students in Australia initially and then branching out into the cross-border platforms that allow them to sell direct into China.

An obvious starting point is the distribution channels offered by e-commerce brands like Alibaba. “Too many companies think it’s too hard and too complex but the technology already allows you to sell to China’s consumers and it could revolutionise your business,” he reports. “As an example, we featured one woman who sells soap made out of goat’s milk that is beneficial for people suffering from skin conditions. She started selling it on Alibaba and her business surged. Now she employs a team of 20 people.”

This cross-border focus is a crucial element of Port Adelaide’s plan for the future and it incorporates investment as well, with 25 high net-worth investors from China due to come to a home game in June at which Australian firms will pitch to them for investment. In a return trip in November 10 companies from Australia will travel to Shanghai to be introduced to an entrepreneurs club in the city. “All of this has been made possible through contacts that we’ve made initially through sport,” Koch says.


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