Port Adelaide out to turn a profit on its ambitious AFL China venture
Port Adelaide is on track to break even on this year’s China game after making a small loss on the first AFL match in Shanghai.
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Port Adelaide is yet to establish when it can turn a profit on its ambitious China venture with consecutive matches in Shanghai integral to the bottom line.
The Advertiser can confirm Port Adelaide made a loss on its inaugural 2017 clash in Shanghai against Gold Coast Suns.
Port bankrolls the annual Shanghai game by $4.5 million with financial support from the South Australian Tourism Commission and in-kind backing from the AFL.
The Power had hoped to make a profit on its 2017 Shanghai clash but a late invoice from Channel 7 for unbudgeted broadcast costs saw its figures slip “marginally” to the red.
Port Adelaide chief executive Keith Thomas says the club is on track to break even from this month’s clash against the Suns at Jiangwan Stadium. The Power won’t be able to announce any profit until all costs are reconciled.
“Based on a late invoice from the broadcaster (Channel 7) there was a slightly unforeseen cost which tipped the ledger fractionally,” said a Power spokesman of the club’s 2017 China financial result.
“This year we are tracking for a break-even unless there is any other unforeseen costs.”
Port attracted 10,689 fans to its second clash against the Suns, well below the sellout 11,500 predicted at Jiangwan Stadium. A-League side Adelaide United attracted a crowd of 41,033 to its Champions League clash against Jiangsu Suning last year.
Port Adelaide is playing the long game with its China foray investing $4.5 million per match — one tenth of its annual revenue. Port has six full time staff dedicated to its Shanghai game and spends $125,000 on game development.
A key to Port gaining financial traction in China is scheduling consecutive games in Shanghai, possibly against Gold Coast and St Kilda. Port estimates it would cost just $1m more to stage a second game in Shanghai annually given the teams and infrastructure would already be assembled.
Port takes on the bulk of financial risk in staging Shanghai fixtures but maintains its pioneering work in Asia will pay off. Port points to generating over $15 million across 37 Chinese partners in two years including a lucrative, multimillion-dollar sponsorship agreement over five years with Shanghai Cred.
Gold Coast chairman Tony Cochrane has requested a “full report” from chief executive Mark Evans into the viability of the China game to be delivered at the club’s June board meeting.
“We have a lot of things we have to very carefully weigh up before we make the decision whether we go back or give it a miss,” said Cochrane.
AFL boss Gillon McLachlan insists the Suns will have first running on a China game against Port — if they desire. The Victorian government wants a Melbourne-based team like St Kilda to be involved in China and broaden trade opportunities for the state.
The AFL is pushing the China concept given the minimal net cost to the governing body.
“The return on investment on the game is strong across awareness, reach, sports diplomacy and commercial terms,” said AFL spokesman Patrick Keane.
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