Money is often thought of as synonymous with power and influence – in sports as elsewhere – but it’s not often we see such a clear example of a sponsor brazenly attempting to assert their influence as we’ve seen recently in China. 

Alisports, the sports wing of Chinese ecommerce giant Alibaba, last year announced  a $150 million investment into eSports through a partnership with the International eSports Federation (IeSF). That was followed up by a 10-year deal to promote the Chinese city of Changzhou as an eSports hub, with the city set to host a number of World Electronic Sports Games (WESG) events, offering total prize money of $5.5 million, while another Chinese city, Suzhou, was also designated by Alisports as a major international sports city, with eSports also a central part of that aim.

Meanwhile, the IeSF is aiming to get eSports recognized as an official sport and has also lobbied the IOC over possible future inclusion in the Olympics, with the IeSF also looking to be accepted into the Global Association of International Sports Federations (GAISF), which links more than 90 Olympic and non-Olympic sports federations, as a first step on the road towards Olympic recognition.

That’s understandable, given that the IeSF is the sport’s governing body. In fact, you could argue that it would be failing in its duty to its members if it did not do such a thing. What is more surprising, however, is that Alibaba and its offshoot Alisports is taking such an active role in the process.

But it seems to be working.

Following a deal last month between Alisports and the Olympic Council of Asia (OCA), eSports will become a demonstration sport at the 2018 Asian Games in Jakarta & Palembang next year, before achieving full medal status at the 2022 Asian Games in Hangzhou – home to Alibaba HQ.

But in a move that ventures into unchartered territory, Alisports says it will work closely with the OCA to develop the marketing of eSports in China and across the region.

So who – or what – is Alisports?

As a relatively new entry into the Chinese sports industry, Alisports is still trying to figure out exactly what kind of sports company it should become, with fingers in broadcasting, sponsorship, events, ticketing and more. Launched in September 2015 as “Alibaba Sports Group”, the original stated aim was “to leverage Alibaba Group’s vast e-commerce ecosystem….to create an Internet-based, consumer-centric sports platform that targets to create value for sports industry participants and enhance consumers and sports fans engagement with sports teams and brands.”

With that in mind, it seems a sensible strategy, then, to focus on a niche, growing area to which few in the more traditional sports industry have paid much attention, with some obvious online synergies between eSports and Alibaba. Bringing eSports to some more higher profile platforms can only help Ali, hence the deal with the OCA.

However, the OCA has been looking for several years to cut down on the number of sports and events – not add to them – due to rising operating costs: the Asian Games is already the second-largest multi-sports event after the Olympics and typically has more sports categories than the Olympics due to the inclusion of so-called “Asian” sports, such as kabaddi, sepak takraw, karate and wushu. As a result, organizers for 2018 have already slimmed the original list of 493 events down to 426 (compared with 437 in 2014 and a peak of 476 in 2010), with more cuts possible in the next year.

Some sports do get added to the program, but this is often done with the host city in mind, so Indonesian martial art pencak silat is on the provisional list for next year when the Games go to Jakarta.

eSports, however, would not appear to fit that mold. But Alisports’ strategy appears to be almost one of adopting the sport as its own. China has previously laid out claims to be the home of football, golf and skiing – why not add eSports to the list?

And while the ink is still drying on the Asian Games deal, the obvious next step is to push for inclusion into the Olympic Games, something that would be far less surprising today than in the recent past, given Alibaba’s mammoth sponsorship deal with the IOC.

This raises two immediate questions:

1. Why does Alibaba/Alisports appear to be leading this push to promote the sport, rather than the IeSF?
2. Will it work?

The quick answer to the first question is a) Ali is far more powerful an entity than the IeSF and b) money: if they successfully corner the eSports market, Olympic inclusion would be a financial goldmine for them.

The answer to the second question cuts straight to the heart of one of the largest cross-cultural misunderstandings that has arisen ever since the Chinese government designated the sports sector as a new area for growth back in 2014, namely what kind of return can investors expect on their money?

The most obvious example of this comes from the Wanda Group and their attempts to promote the stated goals of Chinese football, including, most notably, hosting a World Cup. First, it seemed more than a coincidence that sports marketing firm Infront, for which it paid $1.2 billion, just happened to be run by Sepp Blatter‘s nephew. This appeared to be their “in” to FIFA.

Then, following the Blatter implosion, which Wanda boss Wang Jianlin later said “created an opportunity for Chinese firms”, Wanda signed a multi-year top-tier sponsorship deal with FIFA worth hundreds of millions of dollars. This is from Wanda’s official statement announcing the deal:

As a partner of FIFA, Wanda will be better placed to play a role in the bidding process to host major football events such as the World Cup, closing the gap on international football and enabling Chinese football to have a say in international football.

From a Chinese point of view, this all seems perfectly normal. We invest, therefore we get a say in how things are run/decided. But from a western point of view, it’s remarkable. Wang Jianlin is effectively saying that Wanda’s sponsorship of FIFA means it gets a say in the bidding process. Ignore for a moment the fact that the World Cup voting process is as transparent as a brick wall. It is supposed to be FIFA members – not the sponsors – who decide which country gets to host the World Cup. And while the new system, in which all 209 members will get a vote, is far better than the old system – a behind-closed-doors meeting of the 24-member FIFA Executive Committee – you have to think that any influence Wanda has will be watered down among two hundred voters.

In conclusion, China has declared it wants a World Cup and it would be very surprising at this point if the tournament did not come to China in either 2030 or 2034. Wanda has aligned itself closely to that goal with hefty financial support, but I don’t see its sponsorship dollars making the difference as to whether the World Cup comes to China or not, even though Wanda will be happy to take the credit as and when the FIFA show comes to town.

So where does that leave Ali and eSports in China?

I have to confess, it took me a while to get on board with the concept of eSports as a ‘sport’. For a start, it hardly ticks the physical exercise box and the stars of the sector don’t look like they’re poised to athleticize the landscape in the way that Tiger Woods’ dominance forced other golfers to take their fitness more seriously.

However, it’s certainly part of the sports industry on a revenue argument alone, and with one or other of the traditional sports launching a new eSports initiative seemingly every week, there’s no longer much point in debating where eSports fit on the poker-chess spectrum. ESPN president John Skipper probably described it best when he said he saw eSports as “not a sport – [they’re] a competition”.

That said, you could make a pretty good case that eSports actually hinders China’s vision for a healthy population, by incentivizing teenagers to stay indoors and play addictive video games for hours on end. When you factor in a recent government directive that proclaimed 90% of youths should be active, it starts to look like something that runs counter to Beijing’s masterplan.

Check out this internal Q&A with Alisports CEO Zhang Dazhong from March 2016, in which he says:

I think the 28 Olympics sports and many others, as long as they are upbeat and healthy sports, are conducive to physical and mental health.

That doesn’t sound like eSports. He later adds:

As I said, Olympic sports and others are good for physical and mental health.

So if eSports is becoming a cornerstone of Alisport’s strategy, then the “health and fitness” line sounds like a red herring. It’s not hard to see why.  eSports generated $493m in revenue in 2016, with a global audience of about 320 million people, with eSports analysts Newzoo predicting that revenue would shoot up more than 41% in 2017 to $696m, with 15% of that coming from China.

Olympic inclusion would be a much tougher achievement for eSports than getting into the Asian Games, and there would be far more resistance from the traditionalists. But if Ali can align itself with eSports in China – and globally – the way Red Bull has done with the adventure sector, it wouldn’t really matter if eSports make it into the Olympics. It would simply be the icing on the cake.

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