Galleon Holdings: Stephen Green
The CEO of Galleon Holdings on creating China's biggest TV export
Fancy a global deal involving Chelsea Football Club, the Chinese government and corporate sponsors? Stephen Green of Galleon Holdings did, and he explains how a British business has now created China’s biggest TV export
With a population of 1.3 billion – about a sixth of the people on the planet – China is by far the world’s biggest market. Anyone with truly global ambitions must desire to conquer this vast land, but it is has been the graveyard of many well-established businesses. Brands that have found success elsewhere have lacked traction in China. Its political system, language and cultural idiosyncrasies have proved too much for many savvy businessmen. But none of this served to put off Stephen Green, chief executive officer of Galleon Holdings. His business has a growing presence in the country and has successfully launched a number of TV shows – one of which, Super Soccer Star, is set to become a global hit and Chinese television’s best export. So what is Green’s secret?
Galleon Holdings, an AIM-listed and UK-based media entertainment business, was formed back in 1985 and floated in 2001. Green’s own involvement is more recent. He and business partner Len Dunne bought into the business in 2005. It was, by Green’s own admission, a “basket case”, and much of the company’s early history involved stripping out parts of the business and refocusing it. However, over the past two years the company has got the wind behind it and, after a period of loss, this £12m turnover company now has pre-tax profits of £861,000. What’s more, it’s growing both organically and through acquisition.
Green and Dunne worked together at children’s media company Chorion and, prior to that, Hasbro – home of 1980s kids’ TV characters The Transformers. The robots in disguise have clearly inspired Galleon’s thinking on how it now approaches content and programming. The Transformers have been successful toys, a cartoon and a movie, and their logo and characters feature on a host of other merchandise. It’s also popular in many countries, and although kids love it, mum and dad can enjoy it too.
Backed by the experience and contacts of their chairman, David Wong, Green and Dunne have developed a new concept known as an MEP – multi-platform entertainment property. Green says he isn’t interested in just making a TV show or a toy, only for someone else to scoop the lion’s share of the profits on all the other spin-offs. He wants to create content that is pre-designed to be transposed from one medium to the next, generating demand, revenues and momentum that will then carry the business into other territories.
“It can be a prime-time TV show, a play-along game show or a mobile or online game,” he explains. “The benefit of MEPs is that, when you move into other territories, you have multiple revenue streams. What might work well in one market may not in another. So we cover everything. We don’t expect to unlock all of these in every market, but if you build it in at the start, you have that flexibility.”
So an MEP could start as an online game, which could then become a TV show. In turn, this could contain mobile phone interactions, such as voting, competitions and further web spin-offs. Merchandise, such as toys or clothing, is also added to the mix, and, of course, there are countless sponsorship and advertising opportunities as all of this unfurls. If the MEP is a hit, then demand from sponsors and partners to launch it in a new territory will follow, and the whole process can start again.
Galleon, which consists of several companies, including a mobile phone operator, a toy business and television production companies, wants to control all of these revenue streams. Green has honed his skills exploiting intellectual property through Hasbro and Chorion and was prepared for an ambitious move into Chinese TV.
The kick off
Super Soccer Star is essentially a reality TV show, where young players compete to win a coveted prize: the chance to play and train at Chelsea Football Club’s Academy. The show was launched online, and young people could sign-in, set up a profile and then attract supporters. Those with a certain amount of support could progress straight through to the first round. Others would have to pit their football skills against the rest. It is more of a popularity contest than a football show, and Green is clear this was always his intention.
“We never set out to find the next Diego Maradona,” he says, “it’s an entertainment show. It doesn’t feature a lot of football. It’s is all about the drama. Watching kids kicking a ball is boring. But when you know that if he misses a penalty he will have to go home to a shabby little house in Guangdong, that’s drama. That’s what people want to watch.”
This approach and the initial online push has worked. Super Soccer Star was the most popular entertainment programme on the Guangdong sports channel and has now been syndicated nationwide. The show, or should we say the MEP, which has also ran in Malaysia, is now going global and looks set to be China’s biggest TV export. Also, unlike most British reality TV shows, it has actually managed to find some genuine talent. China’s winner now plays in the Chinese league, and four Malaysian players have been selected for their country’s under-19 squad.
For a media company working in China, there are advantages and disadvantages in equal measure. Green feels he has overcome the big barriers that can scupper a business in the country and is now well placed to reap the rewards. “If you’re in the MEP business, you want to go where media convergence is strongest and the audience is at its largest – China has all these things,” he says. “It’s like a Petri dish. You have 1.3 billion people with 98% TV penetration.”
Handle with care
Indeed, the Chinese government’s desire to control and influence has meant there’s a TV in every home, so audiences are huge. But there is the issue of state control. SARFT, the government’s TV censorship arm, needs to be handled with care, and this has taken time and money. Having a chairman with ties to China has clearly helped the business in its dealings there. But Galleon has also been keen to make sure the majority of its operation is in the country. It has about 80 staff in China, Hong Kong and Kuala Lumpur, who handle much of the company’s day-to-day business.
“Having Chinese people on the ground and doing business with other Chinese people is really important,” says Green.
Unlike many entrepreneurs in China, he recognises that a good relationship with the right person is worth far more than any contract. “They are much more focused on the relationship, the level of trust and how well you’re getting on, so you have to manage that,” Green explains. “Also, contracts mean nothing – they are really just a reference point.”
Galleon has also built a ‘pipeline’ into the country through the £1.5m acquisition of Phoenix Investment Global, an interactive mobile communications business. It further bolsters Galleon’s presence, overcomes logistical and legal issues and boosts revenue. “Being in this business in China is quite healthy, but you want a way of getting your money. If you own a service provider you do, and you get it about 140 days faster,” says Green.
It’s a problem many businesses working in China face. Their organisations are too heavily based outside the country, while they don’t spend the ‘face time’ and show the respect needed to get the backing and support required for success. Galleon has gone the other way. It has started with China and is using it as a springboard for the rest of the world. Green talks about the importance of developing a critical mass in a country and then using that weight to move into other territories. China, which is less saturated or developed than Europe or the US, was deemed as the best place to gain this mass. “For most companies, going to China is something they attempt four or five steps down the line,” he says. “It can be quite difficult doing this, not just for cultural reasons, but also politically, as they are quite precious about the media sector.”
Striking the deal
Welding together a deal with many big players – and they don’t get much bigger than the Chinese State and Chelsea FC – is not easy. However, Hong Kong-based Chinese broadcaster Hunan TV gave its assurance that if a big Premiership club was involved, the show would go ahead. Setting up a giant media deal is tricky, as no one wants to be first to make the commitment. Each party involved wants to have the advantage.
“It’s like finessing your hand in bridge,” says Green. “You have to make everyone believe you hold the card before you have it. In China a broadcaster will say: ‘We can do this if you get me Chelsea.’ We went to Chelsea and said: ‘We have this show…'”
Through Wong’s network, Green met Chelsea’s chief executive Peter Kenyon and a deal was struck. “We went in and said: ‘We can get this show away in China, and if you stump up the prize you will get all this free PR, plus we will pay you a small percentage of any profit that we make.’ And they went for it,” Green recalls. “We knew that China was something that they wanted and we could deliver it to them.”
The deal was agreed, and after successful shows in China and Malaysia, Super Soccer Star is now going global.
“I think we went to the right people – Peter Kenyon and Chelsea have the right approach,” says Green. “The show was a hit in China, and went to Malaysia. Then Chelsea said: ‘Let’s do a global deal.'”
Super Soccer Star is destined to move across Asia, into the Middle East and will also hit Russia and much of Europe soon. For Chelsea and Galleon, this is good business. In an age when sponsorships and shirt sales are the bread and butter of football teams, a big television show rolling around the planet has got to make sense.
Galleon’s Super Soccer Star’s sister show, Super Fashion Stars, is reportedly doing well, and more MEPs are planned. The sheer volume of viewers in China means that any show that succeeds there is already most of the way to becoming a global hit. Some formats won’t play, but those that do are going to be huge.
“Can you come up with a Chinese Ugly Betty you can sell globally? No,” says Green, answering his own question. “But I can sell Super Soccer Star to the rest of the world after China, as they can see the magnitude of it. It’s a tier one production.”