Monday, October 29, 2007

The Globalization of North American major sports leagues – it can’t be stopped

The National Football League conducted its first regular season game in Europe Monday, with the New York Giants defeating the Miami Dolphins 13-10. The game was another stepping stone for the Giants in their quest to win the NFC (and become cannon fodder for either the New England Patriots or the Indianapolis Colts in Super Bowl XLII), while the Dolphins could be heading for the title of first team to not win an NFL game in their entire season since the 1976 Tampa Bay Buccaneers. But off the field the NFL accomplished what the league set out to do when they announced the Dolphins and Giants would play a regular season game earlier this year – the NFL delivered their product to a new fan base.

It has taken the NFL a little longer than those running the National Basketball Association, Major League Baseball and the National Hockey League but the NHL has taken an important step forward in the globalization of their sport – a prudent and important business decision.

More than 500,000 people registered to buy tickets for the game. More than 87 percent of the 88,000 tickets sold for the game were purchased by people in Britain. A near-capacity crowd of 81,176 ignored the rival attractions of four Premier League football matches on Sunday, including Liverpool's big clash against Arsenal, proving that yes even in London when an NFL game is played there are no-shows (people who bought tickets to the game but decided to ‘not’ show up).

The NFL began playing a series of pre-season games outside of the United States in 1986, dubbing the games American Bowl(s). After successful games in London's Wembley Stadium, the series was expanded to Japan. Since 1990, games have also been played in Montreal and Berlin to promote the new WLAF (later NFL Europe) which started in 1991. The 1997 game was played in Dublin, Ireland.

The largest crowd in NFL history was recorded at the American Bowl game at Mexico City August 15, 1994, when 112,376 people attended the game between the Dallas Cowboys and Houston Oilers.

At least one American Bowl game was played annually from 1986-2003 while as many as four were played per year in the early 1990s. There were three games in 1998, two in 2000 and since then not more than one per year. There was no American Bowl game played in 2004 or 2006. Since 2000, all American Bowl games have been played in either Mexico or Japan.

The two teams that play in an American Bowl game are selected by the league. This game is always the fifth pre-season game for the teams involved instead of the normal four.

Not considered American Bowl games, were several earlier pre-season contests played outside the United States. Between 1950 and 1983, there were 13 American football games involving NFL or AFL teams played on foreign soil. Six games between 1950 and 1961 pitted NFL teams against CFL teams with the NFL team winning all six games. One game was played between the AFL and the CFL with the CFL team winning. Five games were between NFL teams and there was one game matching AFL and NFL. The first ten games were played in Canada (1950-1969) then in Tokyo (1976), Mexico City (1978), and London (1983).

NFL Europa began in 1991 as the World League of American Football, with 10 teams competing in the United States and Europe. After a two-year hiatus (1993-94) following the 1992 season, the league returned in 1995 as a six-team, all-European venture, with five teams in Germany since 2005, and has existed in that format through its final season in 2007. NFL Europa was seen as a development league for the NFL; however there were a few issues the league realized over the last few years. The league wasn’t producing many players for the NFL and the consumer (the league had five franchises in Germany and one in Holland) didn’t want to support the product.

"The time is right to re-focus the NFL's strategy on initiatives with global impact, including worldwide media coverage of our sport and the staging of live regular-season NFL games," commented Mark Waller, senior vice president of NFL International.

"We will continue to build our international fan base by taking advantage of technology and customized digital media that make the NFL more accessible on a global scale than ever before and through the regular-season game experience. NFL Europa has created thousands of passionate fans who have supported that league and our sport for many years and we look forward to building on this foundation as we begin this new phase of our international development."

In addition to Sunday’s game in the United Kingdom, the NFL is preparing to stage regular-season games in future seasons in Germany, Mexico and Canada, with Germany being a strong candidate to host a regular-season NFL game in 2008. At the league’s fall meetings last week in Philadelphia the league’s Board of Governors where presented with a plan from the Buffalo Bills whereby the Bills would play eight games (five regular season and three pre-season games) in Toronto over the next five years, but that has little to do with the NFL’s plans to take their game global and more to do with expanding the Bills home region.

Since becoming NFL commissioner last September Roger Goodell has made it one of his mission statements to grow the sport beyond the United States and Canada.

"We're No. 1 in the U.S. but our future success depends in a large part on our ability to globalize," Goodell told reporters in the U.K. capital Friday. "This Sunday is clearly just the beginning."

Those sentiments aside – while the NFL has often set the bar when it comes to sports industry trends, when it comes to the globalization of their sport the NFL is clearly behind the other three major North American sports leagues.

David Stern remains one of the sports industries true visionaries. James Naismith, who invented the game in a Massachusetts gym in 1891, was born in Canada, but it was a combination of factors in the late 1980’s and early 1990’s that directly led to the explosion of NBA basketball globally

Following an embarrassing bronze medal performance at the 1988 Seoul Game, the NBA working with FIBA dropped the distinction between amateur and professional players in 1989, and in 1992, professional players played for the first time in the Olympic Games.

The United States' dominated the 1992 Barcelona Olympics with the introduction of their Dream Team. However, with developing programs elsewhere, other national teams started to beat the United States. A team made entirely of NBA players finished sixth in the 2002 World Championships in Indianapolis, behind Yugoslavia, Argentina, Germany, New Zealand and Spain. In the 2004 Athens Olympics, the United States suffered its first Olympic loss while using professional players, falling to Puerto Rico (in a 19-point loss) and Lithuania in group games, and was eliminated in the semifinals by Argentina. It eventually won the bronze medal defeating Lithuania, finishing behind Argentina and Italy.

NBA teams began touring Europe and Asia in 1988 when the Atlanta Hawks traveled to Russia for a series of games. That same year the NBA began a series of pre-season tournaments that often featured the previous years’ NBA regular season champion meeting European club and national teams. Phoenix and Utah became the first two NBA teams to open their season “on the road” when the two franchises opened the 1990-91 season in Japan.

Stern has always looked forward. Asked at the end of the league’s pre-season tour on October 6 when the league would open offices in Turkey, Stern responded:

“I think that we are aiming for 2009. The opportunity is too important here for us to not move forward and actually that was one of things we were discussing with partners and would-be partners here. And the highest level of the corporate structure indicated that they would be very happy to assist us. The one thing I found is that the Turkish business community is very proud of the strides that it makes. It is very proud that Turkey works with so many different countries and is very determined to assist the country in its growth. They also see the values of basketball for keeping the people playing and talking rather than some other activity.”

Look less at Stern’s response and more at rationale the NBA has when the league is willing to invest in opening an office in Turkey. While in speaking in Istanbul Stern recalled the genesis behind FIBA’s decision to allow the world’s best players to represent their countries in the Olympic Games.

“You know in 1992, we traveled the same year that we had the participation of NBA players in the U.S. Olympics and I would say that the wisdom of Boris Stankovic, the former Secretary General of FIBA who invited and encouraged professionals in the United States to participate in the Olympics, was very important for the development of basketball. In 1992 we were subject to certain criticism as to why such good players would come and dominate other teams. All (that was) said was that the quality of basketball would improve greatly around the world because the opportunity of the other players around the world to play against the best was going to improve ... and that was Boris Stankovic’s vision. I would say that starting with the World Championship in Indianapolis and moving to the World Championship in Japan and dealing with the Olympics in Athens, we saw how good the world has become.”

But it is all about business as the NBA’s 2007 China Tour clearly showed. The NBA teamed up with 11 marketing partners who provided Chinese fans with a complete NBA experience as part of the NBA China Games 2007, three exhibition games featuring the Cleveland Cavaliers, the Orlando Magic and Team China All-Stars, taking place in Shanghai and Macao China from October 17-20.

Adidas, The Coca-Cola Company, DHL, Gatorade, Lenovo, McDonald’s, Mengniu, Motorola, Spalding, Sohu and Toyota will work with the NBA to grow the sport of basketball throughout China. These partners have teamed with the NBA to promote their brands to the large, passionate NBA fan base in China and will interact with fans around the three exhibition games, community events, fan events, thousands of retail locations and enabling hundreds of lucky fans to attend the games live through 20 consumer promotions.

“Our unique array of marketing partners will help us bring the experience of the NBA China Games to our fans throughout China,” said Mark Fischer, Senior Vice President, NBA China. “The level of interest and activation from our partners is unprecedented and their participation will make the NBA China Games 2007 the most comprehensive NBA experience we have ever conducted in China.”

For more than a century, Americans and Japanese have been united in their love for baseball. The Japanese began playing baseball in the 1870s and quickly mastered the game. In 1896, in the first international baseball game played in Japan, a team from Ichiko (the forerunner of Tokyo University) thrashed the Americans from the Yokohama Country and Athletic Club, 29-4.

In 1905, seeking stiffer competition, Waseda University traveled to the United States in the first of many international exchanges between the two countries. Three years later, the University of Washington continued the exchange by becoming the first mainland American team to tour Japan. Over the next 30 years, 21 American college teams would come to Japan and Japanese teams frequently traveled to the U.S.

Japan's first taste of American pro ball came in 1908, when the Reach All-American team stopped during their world tour. Although the team consisted mostly of Pacific Coast League and journeyman players, the visitors won all 17 games against Japanese university and club teams (Japanese pro ball did not start until 1936).

Since 1986, a team of Major League Baseball All-Stars has made a biennial end-of-the-season tour of Japan, playing exhibitions games against the Nippon Professional Baseball All-Stars in the Major League Baseball Japan All-Star Series.

Starting in 1992 and continuing intermittently, several Major League Baseball teams have played exhibition games against Japanese teams. American teams popular in Japan include the Seattle Mariners, Boston Red Sox, and New York Yankees, at least in part due to Japanese players on those teams. Although the Minnesota Twins lack any Japanese players on their squad, they are quite popular in Japan, seen as playing baseball more like a Japanese team than the stereotypical home run hitting American clubs.

The World Baseball Classic played in 2006 during spring training was an overwhelming success both on and off the field. In the U.S., early skepticism about injuries, the Spring Training timing of the tournament and lack of national interest dissipated over the 17 days that the games were played. Skeptical journalists (present company included) who didn't support the concept going in were sold on the tournament by the time it played itself out.

"Anything you do for the first time is not going to be perfect," Commissioner Bud Selig said on Monday just before the Japanese vanquished the Cubans, 10-6, at PETCO Park to win the first championship. "But by any stretch of the imagination, this tournament exceeded my expectations in a myriad of ways. Absolutely."

Gene Orza, the union's chief operating officer, noted that questions had gone from being prefaced "if" the Classic is played in 2009 to "when" the Classic is played in 2009.

"And that's a big change in the mindset since just prior to the tournament," he said.

Attendance at the seven venues didn't reach the pre-tournament expectations of 800,000, but 737,112 tickets sold was pretty close, considering the fact that the Asian bracket, played in the 55,000-seat Tokyo Dome, didn't reach the 80 percent capacity that was originally projected. Games between China and Chinese Taipei and Korea against the aforementioned teams did not turn out to be strong draws.

The inaugural World Baseball Classic was broadcast in 205 countries around the world in seven different languages. In total, 48 different media outlets covered the tournament on television, terrestrial and satellite radio and the Internet; 20 had announcers calling the action live from the game sites.

As part of the worldwide television broadcasts of the World Baseball Classic there were several broadcast feeds that allowed for unique in-game advertising in specific regions. Every game of the tournament, excluding those played in Japan, will have between three and six different feeds with each featuring exclusive virtual signage. The regional feeds of the World Baseball Classic worldwide broadcast include US/Global, ESPN Deportes, Japan/Asia, Puerto Rico, Dominican Republic and Venezuela.

"We are delighted to have the World Baseball Classic distributed to baseball fans around the globe on a variety of media platforms," said Tim Brosnan, Executive Vice President, Business, Major League Baseball. "This tournament was created to give fans the opportunity to experience the best baseball players in the world competing for their respective nations, and the international broadcast distribution is vital to ensure that these games are available to the greatest number of fans possible."

In the United States, ESPN and ESPN2 offered 16 live telecasts, highlighted by the March 18 semifinal games and March 20 final game from San Diego's PETCO Park. In addition, ESPN Deportes, ESPN's Spanish-language network in the U.S., televised all 39 games of the inaugural tournament. Domestic radio coverage will be provided by ESPN Radio, which aired the semifinals and final, and XM Satellite Radio, which broadcast each of the 39 tournament games in English and Spanish.

But the bottom line – the World Baseball Classic offered Major League Baseball a perfect platform to promote the globalization of baseball.

In 1938 the Montreal Canadians and Detroit Red Wings played a series of post-season games in Europe (including a series of games in Paris). After the 1959 season, the Boston Bruins and New York Rangers embarked on a 10-city, 23-game European tour.

It was the 1972 Summit Series the first time Canada’s best hockey players would meet the best from the Soviet Union in the most memorable eight-game series in hockey history opened up new frontiers for hockey. More than 50 percent of today’s NHL players still come from Canada, but most NHL rosters features a blend of North American and European players.

The Los Angeles Kings and the defending Stanley Cup champions the Anaheim Ducks opened their 2007-08 seasons in London a few weeks ago.

“For us, this was an opportunity to dip our toe in the water in Europe, take what we believe is the most international of the North American sports, and bring it to the other side of the Atlantic. And while, obviously, London and England may not be the strongest hockey markets in the world, it puts us in closer proximity to markets and people have traveled here,” NHL commissioner Gary Bettman offered

“A combination of the media and television exposure, people wanting to see two real live games that count in the standings, we think is a good opportunity for us to delve in slightly, control the experience in terms of what we can provide to the players for the on-ice competition and see exactly how well this can work for us from a starting point. And so far the experience has been good.”

And how and why did the NHL end up opening their season in London? In part at least because the facility the two games were played in was managed by AEG the management company that owns the Los Angeles Kings and operates Los Angeles’ Staples Center.

“When AEG, which also owns the Kings, got involved in this fabulous facility, we started having serious talks about seeing if we could get this all to come together in a way we felt we could create an experience for our teams that from a competitive standpoint would work. Since these games count in the standings, we had to be very comfortable that the logistics would work. From a European standpoint, we're dealing with a state-of-the-art facility and the closest proximity to North America that we could get as opposed to other places. So those were two of the factors.”

And one issue Bettman made clear – with the number of Europeans on NHL rosters he believes the NHL will be the market leader in bringing a major North American sport to Europe.

“Well, it's not a question of being a leader or a follower. I would suggest that by being here today we're being a leader in some respects. But it's not about being a leader; it's about doing what's right for your game and doing it on a timetable that makes sense. For us, as strong as we've come back, there are very few businesses that could be out of business for a year and come back as strong as we did.

“We've got to make sure that our core - and our core is Canada and the United States - is as healthy and vibrant as we know it can be and will be over time as we continue to strengthen before we worry about, you know, throwing haste to the wind and saying, Oh, great, we're going to put a bunch of franchises in Europe. It's much more complicated than that both from our standpoint and as a follow-up to the last question dealing with the existing structures that are there.

“Somewhere around 30% of visits to NHL.com come from outside of North America. So that's one of the reasons that we know we can track the worldwide appeal of the game. And we have a very strong and important relationship with NASN, North American Sports Network. We were one of their priorities when they went into business a couple years ago in terms of a sport they felt would be significant for them to have in Europe.”

The biggest challenge the NFL faces in its global plans clearly is the lack of grassroots football programs. American style football is also played in Canada (some of the rules are different) but basketball and baseball is each played in more than 200 countries around the world. And football is played is played in more than 200 countries but that style of football is called soccer.

NFL commissioner Roger Goodell can say whatever he’d like to about opening new markets for the NFL (“While we are the number-one sport in the U.S., our future success will depend in large part on our ability to globalize.”), the simple fact – that isn’t going to happen easily, and might be next to impossible. Goodell is right, but he’s wrong if he thinks it’s going to take place in the near future.

For Sports Business News this is Howard Bloom

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