Alisports LPGA golf tournament cancelled

Just what is going on at Alisports?

One canceled golf tournament might not, at first glance, seem like a huge deal, but a worrying trend of overreaching has dogged Alisports since its inception – and the cracks are starting to show.

Imagine it’s October 2016 and you’re the LPGA. You’ve just signed a ten-year deal with Alisports, giving them ownership rights of your most important tournament in China. All the usual cliches spring to mind – growing the game, millions of new fans, next generation of golfers etc – and you’re feeling pretty pleased with yourselves. It’s Alibaba – they’re one of the biggest companies in China, they know China, Jack Ma is basically Steve Jobs, they’ve got trillions of users etc. What could go possibly wrong?

It turns out the answer is as simple as a piece of paper.

Just weeks ahead of the Alisports LPGA tournament, scheduled for October 5-8, the tour has had to scrap it because they were never granted the proper permit for the event. Just let that sink in for a minute: they had nearly a year to get approval for the tournament, but somehow still managed to mess it up.

The PR spin on this has taken several angles. Firstly, that the 19th Party Congress – the most important political event of China’s year, scheduled to start on October 19 – has thrown a spanner in the works by arriving slightly earlier than perhaps was expected. And while it’s true that China goes berserk for these events – CSL team Hangzhou Greentown was banished from town for an entire month around the time of the two-day G20 summit last year, and I’ve personally witnessed scissors being confiscated from offices ahead of an important parade in Beijing – the Shanghai Masters tennis is scheduled for October 7-15, while the NBA‘s Golden State Warriors and Minnesota Timberwolves will face off in Shanghai on October 8.

When you add in the fact that the Party Congress is in Beijing, not Shanghai, it starts to look a little suspicious, but the next argument was even worse: namely, that the ATP and NBA events had stretched Shanghai security capabilities too thin to cope with women’s golf.

What exactly are they expecting? I don’t remember seeing armed police lining the fairways last time I attended a golf tournament here – and that had John “Wild Thing” Daly involved. Even if China’s world #6 Feng Shanshan is in the lead heading down the 18th, I’m pretty confident the marshals can handle the security side of things (even if their golf etiquette sometimes isn’t the best). The arguments all sounded pretty flimsy.

Then, word came out that this was all a local government issue, which either means that Alisports has exactly zero ‘guanxi‘ in Shanghai (hard to believe) or that they are seriously incompetent.

And this is where the dots start to connect.

The rugby tournament that wasn’t

Earlier this summer, news broke that China would host “the richest ever rugby sevens tournament” in Shanghai in October, with Alisports as the tournament organizer. The hugely ambitious date of “October 20 or late October” was given, which now, of course, conflicts with the Party Congress. However, with no further updates provided since that initial July announcement, it was already abundantly clear that this tournament was not going to happen.

Elsewhere, Alisports signed a long-term marketing partnership in May with world boxing body Aiba, the federation that’s been making headlines recently thanks to its imploding leadership, while VP Wang Dong, often the company’s face at leading international events and representations, has recently left to take up a post at rival Desports.

Speaking to industry contacts, it’s a similar story:

One executive referred to Alisports as “nice guys”, before adding, “but they’re just collecting logos – I’m not sure what they are actually doing” in a reference to the seemingly endless – but essentially meaningless – MOUs the company has signed with various sports federations and leagues.

Another exec told the story of how Alisports was effectively shut out from the parent company’s biggest deal of all – the $800 million deal to become a ‘TOP’ Olympic partner – as Alibaba HQ handled all the details, while another predicted some of Alisports’ global partnerships would be lucky to see the year out.

A fourth simply stated, “They are a shit show.”

What does this mean for Alisports – and its partners?

Current partners or anyone thinking of signing one of these MOUs with Alisports need to be extremely realistic about their expectations, because it’s clear that in certain areas Alisports has been talking a big game, yet hasn’t delivered.

The LPGA fiasco is extremely embarrassing, not least because of the LPGA’s previous issues in China – remember when photos of the players in smog masks went viral? – but Alisports can survive this. Ultimately, the LPGA needs to stay in China, especially now that the success of the male golfers is starting to mirror that of the women, which should help to boost the sport overall. It doesn’t help that this is the second time in three years that the LPGA tournament in China has been cancelled at short notice, but the circumstances were different last time, and this is the first event in the new Alisports-LPGA ten-year partnership, so unless there’s an opt-out clause, things will continue.

The rugby situation, however, is more concerning.

Alisports and World Rugby began a ten-year partnership in April 2016, under which Alisports pledged to spend $100 million in developing the game. One announced goal was getting one million players involved in the game in China (versus global participation numbers of 7.7 million) – a target that struck me at the time as very ambitious, despite the size of the population. In this Leaders piece with World Rugby CEO Brett Gosper in May 2017 discussing the major challenges of developing a sport in China, Gosper says the following [highlights are mine]:

“From the conversations with Alisports to the MOU was very quick. But because you’re not dealing with a country that has a very strong, broad sporting culture, not everyone you deal with has a good sense of what we mean when we’re talking about events, what we mean when we’re talking about the development of the sport; we take things for granted in the western world because sport has been so central to what’s done in schools, people’s leisure time etc. People don’t have the natural instincts around sport, which means things move a lot slower, and there’s a bit less emotion in it from the Chinese side. It’s all very business like, rational and clinical. But sometimes things don’t move quite as fast because there’s not the comfort or familiarity on their side.”

It’s clear from his comments that Gosper has had his eyes opened in the 12 months since the agreement was first signed, but he adds that the goal of reaching one million players in China (from an estimated base of 75,000-100,000) had already been cut from ten years to just five. Given that the October sevens tournament hasn’t panned out, you have to wonder how confident Gosper now is in some of the other promised targets.

Where can Alisports excel?

The problem that Alisports has faced is that is doesn’t know what it is, or what it’s trying to be. It simply cannot be all things to all people, but it seems to dabble as event organizer, marketer, ticket agency, broadcaster, merchandise hub and so on, with no clear objectives or strategy.

But that doesn’t mean it can’t do well in certain areas.

While it’s worrying that Alisports took a back seat in the Alibaba-IOC deal, if HQ truly shares all its incredible data with Alisports – which seems to be the main thread of Alisports’ sales pitch to global sports federations – then the company will have a unique ability to help target Chinese consumers and turn them into a new generation of active sports enthusiasts.

The same executives mentioned above talked about the need to focus on areas – such as eSports – where they can build sustainable business models and make profits, and how the company is well placed to leverage other wings of the Alibaba Group – including its e-commerce, cloud and video platforms – to become a leading company in its own right.

But they stressed it’s all about quality – and, so far, that’s been in short supply.

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One thought on “Just what is going on at Alisports?”

  1. A very rare informative story, which I can never read on Chinese media. All Chinese media are thinking high of Alisports, even this company doesn’t have much to say except esports. This article provides a more balanced view.

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