Quote:World game of football draws Australia into Asian opportunities
THE AUSTRALIAN
APRIL 8, 2016 8:52PM
Glenda Korporaal
David Gallop argues that Australian companies are sponsoring soccer to build stronger links with Asia. Picture: Renee Nowytarger
At Kuala Lumpur’s Mandarin Oriental Hotel on Tuesday night Football Federation of Australia chief executive David Gallop and Socceroos coach Ange Postecoglou will watch the draw for the next Asian qualifying round for the 2018 World Cup.
The Socceroos will be in a round of six teams that will play either Japan or South Korea. But the big question is whether Australia will be in the group that includes the team from up-and-coming world soccer country China.
Gallop and others in Australian soccer are keen to step up ties with China, which has the potential to become an emerging giant in the sport with financial supporters such as Alibaba’s Jack Ma and Wanda Group chairman Wang Jianlin.
With Austrade keen to leverage sport to expand Australian business ties with Asia, the Socceroos playing China at home and away in coming months would provide another opportunity to promote closer business links in the wake of Australia’s free trade agreement with China.
Chinese interests are in talks with Football Federation Australia to buy the financially troubled A-League team Newcastle Jets, which FFA took over in May last year in the wake of then owner Nathan Tinkler’s financial woes.
In February, Melbourne Victory struck a sponsorship deal with China’s Greenwood Capital to be a “front of shirt” partner for the 2016 Asian Football Champions League.
Globally, the Wanda Group, which is active in the Australian property market, has just signed an historic agreement with world soccer governing body FIFA to become a global sponsor, a deal extending to the 2030 World Cup.
With two Australian soccer teams now likely to progress into the final 16 of the Asian Champions League, the final rounds of the Hyundai A-League under way and the approach of 2018’s World Cup in Russia, there is increasing commercial attention on soccer, despite the league’s low attendances compared with other football codes.
“The Socceroos will draw either Korea or Japan and we have a good chance of drawing China,” Gallop said in an interview with The Australian this week.
“China, through its President Xi Jinping, is determined to make football an issue of national importance. This has triggered a huge investment by the Chinese government and Chinese business in the game.
“Xi has a goal to have around 20,000 football-themed schools in China by 2017.
“Countries like China are among Australia’s top trading partners and football can be and is already being used to build those trading links.”
Gallop argues that companies are becoming attracted to sponsoring Australian soccer because of its increasing links with Asia.
Australian teams have competed in the Asian Champions League since 2007 as part of broad sweeping changes introduced to the sport under the leadership of Westfield founder Frank Lowy, whose son Steven succeeded him in November last year as chairman of FFA.
“We recently signed up Caltex to be the naming rights sponsor of soccer in Australia,” Gallop says. “If you look across our sponsorship family from Hyundai to Nike to NAB, Telstra and Qantas, all of them are large, successful companies that are looking for greater links with Asia and with Australia’s increasingly diverse, multicultural population.”
There is also increasingly commercial interest in the Matildas, the women’s team that qualified for the Rio Olympics in a match in Japan against North Korea last month.
“The Matildas are now ranked in the top five in the world in women’s football and they are the highest-ranked Asian team,” Gallop says. “They are a real medal prospect in Rio and their success gives us another bridge into Asia.”
FFA is now in discussions with other potential sponsors of the Matildas.
“We are in the early stages of discussions with a number of companies who are looking to have an association with the Matildas,” Gallop says.
He says Australia’s hosting of last year’s Asian World Cup provided many networking opportunities for Australian business.
Austrade has a program called Match Australia that organises business events around key international sporting fixtures. Early next month Austrade will host a Match Australia event in Guangzhou, when Sydney FC will to play 2015 Chinese Super League winners Guangzhou Evergrande in the AFC Champions League.
Officially known as the Guangzhou Evergrande Taobao Football Club, the Chinese team is partly owned by Alibaba founder Jack Ma, along with the Evergrande Real Estate Corporation.
When the team travels internationally, including to Australia, it is known to give out free tickets to Chinese students and other Chinese locals to help boost their attendances.
“Both Sydney FC and the Melbourne Victory are travelling nicely in the Champions League at the moment, providing further opportunities to play Asian teams in Australia and in Asia,” Gallop says.
The recent deals with Caltex and watch manufacturer Tag Heuer have helped boost FFA’s sponsorship income, which is now at a record of more than $20 million a year.
Gallop will not comment on the progress of negotiations for the sale of the Newcastle Jets.
FFA sold the Western Sydney Wanderers team for $10m in 2014 to Paul Lederer, chief executive of the Primo Group.
It has reportedly put a price tag of about $5m on the Jets and is said to be in ownership discussions with Chinese lighting company the Ledman group, headed by Martin Lee. Investment bank UBS is advising Gallop on the deal.
The Shenzhen-based Ledman Optoelectric company sponsors two major Chinese teams and is a naming rights sponsor of Portugal’s second division soccer league, part of an increasing investment in the sport by Chinese companies.
Boosted by their soccer-loving President Xi, the Chinese have a strategy to build up their local teams and one day host the World Cup. Having already successfully hosted the 2008 summer Olympics and preparing to host the winter Games in 2022, Chinese leaders have realised the importance of sport as a nation builder and a connection with the global economy.
Xi’s ambition is to produce 100,000 players from the soccer schools being set up around the country and boost the skills of Chinese league players with highly paid foreign imports.
This has included the February deal by Guangzhou Evergrande to buy Colombian-born striker Jackson Martinez from Atletico Madrid for $60m.
Tuesday night’s event in Kuala Lumpur will see 12 teams, including the Socceroos, divided into two groups of six that will play each other on a home-and-away basis. The top two sides from each group will be guaranteed a place in the World Cup in Russia in 2018.
“The Socceroos have had two very successful games in Adelaide and Sydney where we have not only won convincingly but played an exciting brand of football,” Gallop says. “Anticipation is building of our prospects of not only qualifying for Russia but doing well when we get there.”
Gallop says attendances at games will increase as the stakes get higher and the World Cup nears. “Interest will build once we get into the next round of qualifiers,” he says.
FFA has done a deal with the NSW government to host one major international a year for the next five years and is in discussions with other state governments for similar deals.
Its major source of revenue is its $40m-a-year television rights deal with Fox Sports.
The current contract, which does not expire until the end of the 2016-17 Hyundai A-League series, is currently being renegotiated.
Optus surprised the market late last year by picking up the television rights to broadcast the English Premier League from next season.
Gallop is guarded about how the talks for his new deal are going. “We have had a very successful relationship with Fox Sports since the beginning of the A-League 10 years ago,” he says. “But there are new entrants into the market and we need to take all of that into account in these rights negotiations now.”
Soccer has a growing interest among the growing Asian population in Australia. Gallop says 59 per cent of the Asian community in Australia only follow soccer.
“They have no interest in other football codes,” he says.
“That is a huge opportunity for our sport.
“Football is well recognised as the world game, but the bridge for Australia in political and economic terms could well be said to be paved with footballs.”