June 30, 2020
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The National Football League (NFL) has spent much of the last 35 years working to introduce American football to sports fans across the globe (see: American Bowl, International Series). The Super Bowl is regularly cited as the event that drives initial interest in and awareness of the game amongst international fans, but year after year NFL research indicates–regardless of market–“it’s the teams and star players that convert casual fans into avid ones.” Given the importance of club and player affinity in developing fandom, if the NFL is to grow its legion of fanatical followers outside of the U.S. direct team engagement and activation abroad is a necessary. Damani Leech (COO, NFL International) explained that it’s simply not something that can be executed solely at a league level. That’s currently a problem for the NFL with clubs prohibited from promoting themselves–or their players–outside of the 75-mile radius surrounding their home market, but JohnWallStreet by Sportico has learned the league intends to alter its bylaws and will allow teams to ink marketing pacts in foreign countries–perhaps as soon as next off-season.
Our Take: It’s important to note that while the NFL is looking for ways to offset the anticipated revenues losses associated with limited/no fans in attendance this season, the proposed international club program is not considered a potential solution to plug the shortfall. In fact, it’s not even under consideration for the 2020 season. Leech said that mid-2021 is the soonest teams would be able to begin activating in international markets.
The International Committee approved the structure of the International program in March, but elected to put the project on hold with international travel challenged during the COVID pandemic. So, when the topic of international market/fan development does make its way back to the top of the docket, Leech said to expect the framework for the new marketing and sponsorship plan to mirror the league’s domestic strategy. “Clubs will likely be submitting 5-year fan-development proposals to gain access to a specific ‘home’ market” (along with some commercial sales rights in the area).
The NFL wants to see 5-year marketing plans because they’re looking for long-term commitments from the teams. Leech explained that it “takes time to really start seeing results [in a new international market] and [the International Committee] wants clubs thinking long-term. This is not about going into a new market for one year, doing a couple of marketing activations and expecting significant revenue. It’s going to take some time–and investment–to see the needle move in terms of building fandom or realizing commercial value.”
The international program is as much about growing the game abroad as it is about the league’s long-term approach towards increasing club revenues and value of the individual franchises. While not a top driver, Leech said the league has also “noted that franchise optionality is among the long-term value propositions” associated with teams marketing themselves overseas. In other words, it’s possible that in time a club could develop such a large and passionate fanbase in an international market that franchise relocation becomes an attractive alternative to their U.S. home.
The NFL intends to award ‘shared exclusivity’ to 4-6 clubs in each of its key international markets based on the breadth and depth of their marketing proposals. By limiting the number of teams permitted to establish their presence in given territory, the league can ensure only those prepared to help grow the game abroad–and commercialize the opportunity–gain access and that those organizations have a real chance to execute on their plans (i.e. commercialization becomes more challenging as the number of clubs in a given market increases).
Geography (think: clubs based near the northern or southern border may want to play in Canada/Mexico), player personnel (think: teams with players hailing from a particularly country or with players particularly popular in a given international territory may want to set-up shop there) and business synergies (think: ownership may have existing interests in a given global market and thus believes they can leverage existing relationships there) are among the reasons teams have expressed interest in various international markets to date.
The league won’t prevent a club from taking up residence in a specific market, as long as it has a solid marketing plan to execute on, but it does believe that establishing a foothold “in a city where the league has an office and staff–or strong long-term partner relationships–makes sense.” That should make London, Toronto, Mexico City and Shanghai some of the more desired markets among NFL teams looking to establish a presence abroad.
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