Lessons in entrepreneurship from David Koch and Port Adelaide’s China game plan
Friday, August 11, 2017/
The Australian Football League pledges to be Australia’s sporting game, but as the world gets smaller, those within the code are looking to take a more entrepreneurial approach.
One of the big game changers of 2017 was the inaugural AFL National Women’s League, which led to big brands courting clubs for partnerships, and plans for a further expansion in 2018.
Then there’s the international expansion of the code. In May, the Gold Coast and Port Adelaide football clubs headed to Shanghai to take part in the first home-and-away AFL game played in China.
For Port Adelaide president and businessman David Koch, the club’s connection to China is as much about sports diplomacy as creating a niche for the team into the future — and he says there is plenty that SMEs can learn from a the social and community connections sport brings.
Here are three ways the sporting club is applying entrepreneurship to its endeavours.
The value of experiences
Port Adelaide’s recently established “China Power Club” program goes beyond simply watching sport, intending instead to appeal to, and engage with, influential business partners across the region by showing them the lifestyle that runs alongside a passion for AFL.
Over the past year, the club has welcomed a variety of stakeholders to Adelaide Oval, showing them full game day experiences.
“If you put a football scarf on someone, they become a member of a football family,” Koch tells SmartCompany, saying early supporters of the club, including billionaire Gui Guojie, quickly fell in love the atmosphere.
In 2016, Gui Guojie committed a reported $3 million to the club, and was keen to get a Shanghai game in motion.
Stakeholders also soon started asking about business opportunities in the region, and so the club hosted 40 Chinese business people at a Port Adelaide game earlier this year, allowing them not only to experience the sport but also hear investment pitches from local South Australian businesses.
“We had a little space tech business, we had a winery, we had an abattoir — all wanting to expand,” Koch explains.
“Now, we’re taking 12 [businesses] to Shanghai in November. We’re seen to be a friendly, independent group that can match Australian businesses with China.”
Enjoy the ongoing conversation
One year into Port Adelaide’s China strategy, Koch says there’s plenty the club can improve on when executing projects like the AFL’s Shanghai round.
“We can do it a lot better from next year,” he says.
“This year’s game was our pilot, we made a lot of mistakes. It’s now continuing to grow that, and to bed down some of our commercial partners.”
Expanding connections with the region might take time, but the benefits include broadening the view that all within the football club have of the world, and of Chinese culture in particular.
“The other side of it has been learning about the Chinese business ethos — how to build contacts, how to build respect, and how business is done quite differently,” Koch says.
“It’s been an exciting evolution internally and it’s given opportunities to our staff that they’d never thought of before.”
The strategy is also paying off for the club financially.
Koch says when he took over the presidency of the club in 2012, Port Adelaide was “basically broke”. However, last year the club delivered a second consecutive profit of $14,000, confirming its China strategy investment had boosted the bottom line.
The club told Fairfax earlier this year the sponsorship deals it had brokered with partners for the Shanghai game alone was $4 million, meaning the experiment would break even in its first year.
Aussie rules football is increasingly looking beyond the Australian east coast, but this doesn’t mean one sporting club has a monopoly on expansion, Koch says.
“The opportunities are massive — you’ve got to almost change the terms of reference to understand them,” he says.
“And we’ve been very open with other clubs who have wanted to see our blueprint. We’ve been planning this for four years, while there are some clubs looking at India now, some looking at Japan.”
Koch says SMEs should start thinking about their own engagement with the Chinese region, perhaps taking inspiration from the football model.
“The size of China is mindblowing, so test it out,” he says.
However, understanding the opportunities on offer is about going much further than simply identifying the “Chinese market,” he says.
“The thing for us is you can’t say you have a “China program”. We have a Shanghai focus. And well, second and third tier cities, they offer as big an opportunity as anywhere.”