The NFL and International Expansion

Since 2005, the NFL has hosted at least one regular season game outside of the United States in a series known as the “NFL International Series”. To date, NFL games have been played in Mexico City (x1), London (x7), and Toronto (x5). The most recent game was played this last Sunday at Wembley Stadium in London, England. London will host one more regular season game this year on October 27, making it the eighth time the NFL has played in England. It has recently been confirmed that the Jacksonville Jaguars will play as the home team at Wembley once a year until 2016.

The NFL has been pushing hard for more international awareness in recent years. From the span of mid-September through mid-October, all NFL fields display the “NFL Futbol Americano” logo in celebration of Hispanic Heritage Month. Although efforts like this may show an increase in international demand for NFL games, they are not necessarily bringing in foreign talent, however. In fact, among professional sports in the United States, the NFL ranks last when it comes to the number of foreign-born athletes. Only 2.5% of active roster players in the NFL were born outside of the U.S. That percentage is extremely low when compared to the MLB and the NBA, which are 34.5% and 22.8%, respectively.

There are some who believe that a foreign NFL expansion team is on the horizon. According to an article in The Independent, London would be a serious contender for such an expansion. In fact Roger Maslin, the Managing Director of Wembley Stadium, has said, “If they were bringing it anywhere in the world, we want it here”. London would actually be one of the few places internationally that is immediately NFL-ready. The fan base is there, the stadium is there (as Wembley Stadium has a capacity of 90,000, which is even larger than the 70,700 average capacity among NFL stadiums), and the financial viability is there. On paper, it appears as though London is in prime position to one day receive its own NFL expansion team.

If that were to happen, not only will the international fan base skyrocket but potential worldwide revenue could do the same. There are some who disagree, however. According to sports business expert Simon Chadwick, “The NFL is one of those sports that is deeply socio-culturally embedded -- it is quintessentially American, which means it only has limited appeal outside its core markets” Whether the NFL would succeed with a permanent international presence is to be speculated. As for me, the more worldwide appreciation for the game of American football the better.


nickwb said...

I love the article. A couple of things that immediately jumped out at me: first, I've never thought about the fact that there are very few foreign born players. Very interesting. On top of that, I guess it has never really occurred to me that they really don't play American Football anywhere else in the world besides North America (I know Canada has some leagues).

While there are a number of economic approaches one could take in exploring this discussion, I'm going to throw a relatively obscure one out there which is, how will moving football internationally affect player competitiveness here in the US, and will it improve or hurt the business. We've recently seen in basketball that when the player's union goes on strike, there now exists competitive leagues overseas that many players are able to leave to go and make money. While I don't think that does long term damage to the NBA, I think with time it has the potential to ultimately hurt their business. With the growing number of long term head injuries, looming lockouts are inevitable in the NFL and if growing demand by fans in other countries causes players to potentially move to other markets with their football skills, the NFL potentially stands to lose some control of their very well defined market they currently possess.

Dr. Tufte said...

Mazer: 100/100
nickwb: 44/50 (questions marks, and poor sentence structure)

Hmmm. This is an interesting topic for a journalist, Mazer, but how does it relate to managerial economics students?

BOHICA said...
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BOHICA said...

I think what the NFL is doing is trying to mimic to some extent what the NBA has done, which is to become a global power. Soccer is the most popular sport worldwide, but in the U.S. it might rank as low as #4 or #5 on the scale of interest and involvement. It would be safe to say that football is the #1 sport in America, yet it might only be the 4th or 5th rated sport in other countries.

The NFL has slowly been creating more demand for its sport to the global market by annually playing games in foreign countries and having various television and radio channels broadcast all of its games. With the creation and then disbandment of NFL Europe, it was able to test the international market and find out where an actual NFL team might find a permanent international home.

England has demonstrated that it could support a team and this would be just the first step for the league. As soon as London had its own team, I think many of the largest European cities would clamor for their own team.

As the demand curve begins shifting to the right, the NFL could begin either relocating teams or delve into league expansion to supply Europe with what they would be craving the most--American football.

Chad said...
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Chad said...

I watched the game that was recently played in London this month and was very surprised at how many people were at the game and the level of enjoyment that I saw from the fans. One thing that I noticed was the variety of different NFL teams that were represented by fans wearing jerseys and other team related clothing. It makes me wonder how many of the fans are American? It is very common for American born citizens to move to London for work or school and take their team loyalties with them. I do not disagree that an NFL expansion team could be successful in London, but to think that it would catch fire and spread to other European countries is unrealistic. I agree that the NFL is an American sport and it will never surpass Soccer as the Worlds sport of choice.

Dave Tufte said...

BOHICA: 50/50
Chad: 47/50 (world's)

BOHICA: Not much managerial economics in this comment. That last paragraph reads like an afterthought.

Chad: There's ManEc that you're missing in your comment. The logo jerseys are a complement to the sport (as a whole) and the game (in particular). And, they may even be bundled into a package deal.

Bob said...

It is interesting to consider the implications of international expansion, especially of the effects of increased travel. For example, an NBA team may play 3-4 games a week, and in the MLB, a team may play 5-6 games a week. Approximately half of these games are played on the road. To expand across the Atlantic would likely mean significantly more time traveling, which would decrease the amount of time a team has to practice and prepare for the next game. Would this lead to a significant decrease in quality? The answer to this question may be related to the concept of elasticity, where a percentage increase in travel will lead to a “?”-percentage decrease in quality.

On the other hand, an NFL team only plays one game per week. Players and coaches will have much more time to travel and prepare for each game. Based on this factor, the quality of the games would not be impacted quite as adversely as in other major league sports leagues. In this regard, the NFL would probably be less elastic in response to additional travel.

Of course there are many other factors to consider with this potential expansion, but I wonder if this issue may have a significant impact. If it is important, then the schedule, timing, and frequency of the games in the various sports leagues may be impacted by international expansion.

Dave Tufte said...

Bob: 50/50

Bob ... you think like a fan and not an MBA student ;-)

There are other elasticities you need to worry about besides the elasticity of quality play with respect to travel time.

How about the elasticity of profit/revenue with respect to quality play? If that's really inelastic, then your concern won't matter much.

Or how about the elasticity of profit/revenue with respect to fan-interest-because-games-are-international?