Tuesday, July 17, 2007

The Globalization of the National Football League – not exactly going according to plan

In more than 200 countries world-wide when the word football is linked to sports billions of people associate how the sport is played with what Americans commonly refer to as soccer. American football is played professionally in two counties – the United States of America where it remains the center of the known sports universe and Canada where the Canadian Football League has been passed by ‘soccer’ in terms of popularity, participation and as an economic entity. But give the National Football League credit – despite every indication American football is failing in its attempts to move forward with their global business plan, the NFL the gang who gets it right seemingly all of the time should consider waving the flag and giving up what is clearly a far to ambitious business and marketing plan outside of the fifty states.

Fact – after 16 years the National Football League decided to abandon a sports property it created and invested hundreds of millions of dollars in.

Fact – after announcing the league’s first foray into China last summer “The China Bowl” a much ballyhooed preseason game this August, the league tossed in the towel on that opportunity.

Despite those two obvious and critical setbacks NFL officials are trying to spin their failures into bumps along the road, suggesting all is great in the NFL new frontier.

Just days after the NFL jumped ship on NFL Europa (ten points if you can name all the different incarnations of this league – answer at the end of this Insider) NFL vice president Mark Waller spoke glowingly of the NFL big plans for games being played over the pond.

Waller suggested one of the biggest reasons the NFL shut down NFL Europa for a much grander vision – NFL franchises playing a 17th game each year in the not too distant future with that extra game being played outside of the United States. NFL commissioner Roger Goodell ,the real power behind the NFL, talked about a similar plan a few months ago – in the midst of what ended up being NFL Europa’s final season.

“You'd play eight at home, eight away, and one game internationally,'” he said. “It would be an incredibly powerful way to introduce fans to multiple teams.”

The concept of a 17th game makes perfect sense when you consider it would allow the NFL to create a complete broadcast schedule (games every Thursday and Saturday night) for the NFL Network while keeping the number of games the NFL offers it’s current national broadcast partners intact. Needless to say sports leagues will take from the networks until they stop giving, but at the end of the day the NFL would be well advised to focus on crediting demand for the NFL Network a broadcast entity owned by the NFL. And the only logical business decision to increase demand for the NFL Network and therefore force the major cable carrier’s who refuse to carry the NFL Network is to add a 17th game. By placing those games outside of the United States it becomes a much easier plan to market those NFL games as part of the NFL Network package.

But as Waller told Bloomberg News he hopes the league would have teams based outside the U.S. by 2017.

“Ten years from now, I hope we will have a team in London, I hope we'll have a team in Mexico, I hope we'll have one in Toronto, playing within the NFL,” Waller said.

There will be franchise in Toronto well before 2017, but Mexico selling the concept to the National Football League Players Association would be next to impossible (think Denzel Washington and his movie Man on Fire) and as for London – please one regular season game selling in November 2007 in a country that rejected The World League of American Football (different name for NFL Europa) would be a titanic error in judgment.

Roger Goodell’s predecessor Paul Tagliabue was the big believer in the concept of American football being played in Europe after the Super Bowl, but before the start of NFL training camps. Tagliabue had a pretty sound business plan – the league would serve as an opportunity to introduce American style football to Europeans and the league would offer NFL teams an opportunity to send up to six players each spring to the league in hopes of better developing their skills as football players.

Germany was home to five of the six NFL Europa franchises that played in the league’s final 2007 season, the other called Denmark home. London was home to the London Monarchs and the England Monarchs between 1991 and 1998, but hasn’t been home to an American football based rules teams in nine years.

In 1991 and 1992 the Monarchs played their home games at Wembley Stadium. In the 1991 season the team won the first World Bowl at Wembley, beating the Barcelona Dragons, the only team to have beaten them in the entire season. In the first season of the World League, crowds at Wembley averaged 40,483 for the five games. However dwindling interest - even with the advent of a new local rivalry with the Scottish Claymores - forced the team to shift its home ground to White Hart Lane, home of Tottenham Hotspur F.C., when the league resumed play in 1995, and that year average attendance fell to 16,343.

Towards the end of the 1997 season, the WLAF (World League of American Football) was starting to re-evaluate the team's situation in its market, believing that the return to London had not been as big a success as hoped. In conjunction with general manager Alton Byrd, the team was rebranded the England Monarchs and traveled the country, playing home games at the Crystal Palace National Sports Centre, Ashton Gate (home of Bristol City F.C.) and Alexander Stadium, an athletics stadium in Birmingham - another step down in the size and quality of the stadia used.

The decision divided opinion dramatically amongst the Monarchs support and rather than increase interest in the team, attendances slumped to an average of 5,944. The announcement at the end of the 1998 season that the league would add a new team, the Berlin Thunder, led to weeks of speculation that either one of the existing teams would be shut down, or that the Monarchs and Claymores would be amalgamated into a single British team. Confirmation that the Monarchs were to close down came in July that year.

NFL Europa was an American football league which operated in Europe from 1991 until 2007. Backed by the National Football League (NFL), the largest professional American football league in the United States, it was founded as the World League of American Football (WLAF) to serve as a type of spring league. In 1995, when the league was revamped after a two-year hiatus, the league was renamed the World League. In 1997, the league rebranded itself as the NFL European League or NFL Europe. After the 2006 season, the league's name changed again, this time to NFL Europa (there are all those league names).

Originally, the ancestor to NFL Europa had 10 teams playing a 10-game regular season: six teams from the United States, three European teams, and one Canadian team. The two teams emerging from the WLAF semi-final playoffs met at the end of the season in the World Bowl. The first two World Bowl games were held at predetermined locations much like the modern Super Bowl. The original WLAF was barely noticed in the United States, and only marginally more popular in Europe. Total attendances at the fifty games in each season were between 1.2 and 1.3 million, giving an average game attendance in the mid twenty thousands. The WLAF suspended operations in 1993 prior to the season.

In 2006, the league's schedule opened and closed one month earlier than normal because of the 2006 FIFA World Cup, which was played at four of the five German stadiums that hosted NFL Europa teams (only the LTU Arena in Düsseldorf was not chosen to host Cup matches, and that stadium hosted the World Bowl that year). The 2006 World Cup and its impact on the credibility of the American football in Europe led to the end of American football being played in Germany – European football was king.

On June 29, 2007, NFL officials announced that the league would be disbanded effective immediately, calling the decision a sound business move that will allow for a stronger international focus on regular-season games outside the United States.

The announcement came less than a week after the Hamburg Sea Devils beat the Frankfurt Galaxy 37-28 in the World Bowl championship in Frankfurt in front of a crowd of 48,125.

NFL commissioner Roger Goodell thanked the fans for their support but said it was time to develop a new international strategy, terming the move to fold NFL Europa the "best business decision." The league reportedly was losing about $30 million a season.

"From a football standpoint, I think it pays for itself," said Kansas City Chiefs president and general manager Carl Peterson told Bloomberg News Services last month. "The money we put into the NFL Europa league is well worth the investment, because we are not only improving the quality of our game at the NFL level, but we're developing players who sometimes do become stars in our league."

BTW we may have missed one name in the league that had more names than the sense to fold – The World League. The World League of American Football begat the World League, which became the NFL Europe League and then, finally, NFL Europa this year, but whatever name the NFL placed on this turkey it failed to help develop talent and most more than $30 million each year over the league’s 15 years. If the well reported numbers are to be believed (and there is no reason whatsoever to suggest otherwise), the NFL’s failed concept cost NFL owners $450 million. That might be a drop in the bucket for a business that generates more than ‘$6 billion annually but it still represents hundreds of millions of dollars NFL owners grew tired of losing.

"A foundation of American football fans in key European markets has been created and the time is right to shift our strategy," Goodell said in a statement. "The next phase of our international growth is to focus on initiatives with global impact, including taking advantage of developing technologies that make the NFL more accessible on a global scale and ensuring the success of our new international series of regular-season games."

Great attempt at spinning the NFL’s message to your liking – but coming so soon after the NFL’s embarrassment in creating a China Bowl suggests one + one = two significant business mistakes made by the sports league, the NFL all other leagues live by when it comes to setting industry standards.

"NFL Europa has created thousands of passionate fans who have supported that league and our sport for many years," said Mark Waller, senior vice president of NFL International. "And we look forward to building on this foundation as we begin this new phase of our international development."

What Waller forgot to point out – many of those fans were disguised as empty seats and after 15 years the only markets interested in the concept were Germans. NFL Europa managing director Uwe Bergheim told The Associated Press the league had succeeded in establishing a fan base for football in important European markets. What Bergheim failed to acknowledge – five of those six markets were in one country

"Despite the great support of fans, business partners and the cities where we were active, we decided that it was time to change the strategy," Bergheim said.

Last August the NFL announced with great fanfare – the NFL was taking their brand of football to the world’s most populated country – for The China Bowl a preseason game that was to be played on August 8 in Beijing. The plan was simple, NBC the International Olympic Committee’s American broadcast partner for next summer’s Beijing Games would televise the game a year to the day before the start of the 2008 Beijing Games. On the surface a great idea, but in the end an embarrassment for the NFL. Consider what the NFL had to say when the game was announced and the excuses the league made when they cancelled the game in April.
“To continue to grow, you have to have an international business presence,” said Pete Abitante, senior director of international public affairs for the NFL. “China is such an untapped market for us. That's why flag football is important to us. When you think about how you learned to play football, it was, `Go down to the fire hydrant and I'll throw you a pass.'”

“Flag football is a good place to start because it's the simplest form of the game for kids 11 to 14. Bringing flag football to their schools is a way to show we're not just there to bring in NFL games.”

“My family has been doing business in China for nearly 20 years and we are proud that The Kraft Group is New England’s number one exporter to China,” said the Patriots’ Robert Kraft when the game was announced. Kraft’s Patriots where set to meet the Seattle Seahawks in the now defunct China Bowl.

“Based on our own experiences in China and the growing interest in American sports there, we launched a Patriots website in Chinese in 2004. It was the first of its kind. It is a privilege and an honor to be selected to participate in the NFL’s inaugural China Bowl in 2007. I think our players and staff will be terrific ambassadors for the game of football and I hope that it will be an experience that they will never forget. I look forward to developing new relationships and building a legacy for the Patriots and the NFL in such a great country.”

Two weeks before the start of the 2006 NFL season, the league and Yahoo announced NFL would offer video streaming of their games into Europe, Asia, South America, Australia and Africa, but not into China. China Central Television (CCTV) broadcasted NFL games in China last year, also Super Bowl XLI in Miami in last February.

Funny what a difference eight months made to the NFL when they announced the cancellation of the China Bowl on April 2, 2007, a day and many bucks short after April Fools Day the NFL did their best to correct their first global marketing error almost three months before pulling the plug on NFL Europa.

"The regular-season game initiative was approved by NFL ownership after we announced the China Bowl," said senior vice president of NFL International Mark Waller. "Therefore, we will focus this year's efforts on the regular- season game."

The NFL will work with the Beijing municipal authorities to lock down an exact date in the near future.

"Our assessment is that Chinese fans would be better served if our game in China is played at a later date after we have launched our international series of regular-season games and more effectively paved the way for the introduction of our game into China," added Waller. "As a new sport in China, it is critical that we create the best platform for the introduction of the game. We are delighted Beijing authorities have agreed with our assessment and have invited us to play in Beijing in 2009."

Kevin Alavy, the head of analysts for Initiative Sports said told CNNmoney.com’s Chris Isidore he believes that's due to the game's status as a major event for Americans around the globe.

"Unfortunately, we don't know the nationality of those viewers," he said. "I believe it may be a lot of the outside interest in the Super Bowl is the ex-pat community."

Alavy said in the CNN report that while there is only a limited relationship between participation interest in a sport and its spectator appeal, a minimum level of participation and familiarity with a sport is needed to help build fan interest.

"It's always extremely challenging to take a sport and transplant it to another country," said Alavy. "I think with American football, it's particularly difficult because it's a sport with complex rules for outsider to pickup. And there's never been indigenous leagues playing the sport in other countries."

Well respected sports marketing executive Chicago based Marc Ganis told Cnnmoney he for one believes in the viability of American football beyond the boundaries of the United States of America, but isn’t sure it makes much sense.

"If the league wants to grow internationally, regular season games where [the] best are playing the best is the key," he said. "The NFL is the quintessential broadcast league. [Commissioner Roger] Goodell realizes that should be the focus. Having a minor league in Europe is almost a distraction."

"The NFL is so strong domestically, that it does not need much interest beyond North America," said Ganis. "But it would be remiss if it did not take the opportunities presented to it internationally."

The real question the Lords of the Pigskin need to ask themselves – if their product isn’t going to work in Europe, if the league is generating more than $6 billion a year (watch for that figure to hit $7 billion in the very near future), why risk anything on a market that doesn’t matter to the economics of your business – stay where your sport league is so far ahead of the your product is an unstoppable force. Hey if it isn’t broke, do whatever you have to do to protect your image and success.

For Sports Business News this is Howard Bloom. Sources cited and used in this Insider Report: Wikipedia, CNNmoney.com, The Boston Globe and ESPN

Labels: , , , , , ,