Sunday, October 28, 2007

London Calling – the National Football League heads over the pond

For the first time in National Football League history a regular season game will be played today in London, when the Miami Dolphins host the New York Giants. At 0-7 and without Trent Green their starting quarterback and their leading offense weapon running back Ronnie Brown the Miami Dolphins are the worst team in the National Football League, a team with little talent and even less hope. The Giants are 5-2, the game means a great deal to the Giants; legitimate Super Bowl contenders. But today’s game is less about what will take place on the field and more about the message the NFL wants to deliver off the field – the NFL is ready to take their next step in the globalization of American football.

“We’ve come a long way since we started bringing our game overseas,” National Football League commissioner Roger Goodell said in addressing the media earlier this week in London.

“While we are the number-one sport in the U.S., our future success will depend in large part on our ability to globalize. As the world shrinks, thanks to emerging technology, we will increasingly become partners with many of you in this room.
To understand the potential of NFL football outside the U.S., it is important to understand how we evolved.

“Success did not come overnight. It took us in the NFL 45 years – from 1920 to 1965 -- to become the most popular sport in America. Fifty years ago, the NFL consisted of only 12 teams. There was no Super Bowl, no national television contracts, one playoff game and no games played in primetime.

“It took time for the NFL to put in place the building blocks that any sport needs to grow:

“The right cities, the right owners and the right stadiums; Great teams and the ability to change and tailor the game to spectator interests. A sustainable competitive and balanced model that includes significant revenue sharing among owners

“In the past 40 years we’ve accelerated our growth.

“The primary force was the use of broadcast television to reach the broadest possible audience. As the media landscape shifts, we have used different media platforms, such as cable, satellite and the internet to complement and support our successful connection with fans.

“The vision of our owners – many of whom are here today, including Wayne Huizenga, Jonathan Tisch, Joel Glazer, Jerry Jones, Bob Kraft, Stan Kroenke, Dan Snyder, John York and Rita Benson-LeBlanc, and Commissioners Tagliabue & Rozelle – has played a leading role in our success.

“They have all been committed to the success of the entire league. They compete on Sunday and Monday nights on the football field, but they are business partners off the field.

“Our game plan is to keep a tight focus on core themes. We have to make sure the game remains exciting and competitive. We have to have a solid league structure with strong franchises across the board; and we have to continue to be innovative, always looking for ways to improve everything we do.

“Growth in the future clearly means expanding our presence in the global sports marketplace.”

National Football League officials announced on January 16, 2007 the league would play its first European regular season game in London.

“There were a variety of reasons. First of all, we have a great history of NFL football in London. The British fans have been great fans of NFL football for several years and London is a tremendous international city. We have a great relationship with the City of London and that was another important factor. But it was primarily because of the fan base and the fact we have such tremendous fans in London. We’re responding to that interest in our game.”

“We have tremendous television partners in London that have shown a great deal of interest in us and we have also had a great deal of support from public officials. The Mayor of London has shown a great deal of interest in hosting this game.” Goodell spun a tale to the media (that clearly wasn’t based on the facts) at the time.

The NFL made London their first choice despite the success American football has enjoyed in Germany (the better selection). Germany was home to five of the six NFL Europa franchises, the other calling Denmark home, before the NFL folded NFL Europa at the end of the 2007 season. 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.

Despite Goodell’s comments, the facts, such as they demonstrated NFL football had questionable support in England. All 90,000 seats at Wembley Stadium where sold for today’s game. Given the NFL put the full resources of the league’s marketing machine behind today’s game the sellout doesn’t come as a surprise. And as far as anyone connected with today’s game is concerned this is the start of something very big for the National Football League.

"I do think this will have a snowball effect," Giants president John Mara said in a New York Newsday report. "I think this will promote our game throughout the world, and will serve as a stepping-stone to bigger things down the road. It's an honor that we and the Dolphins are the first teams to embark on this venture."

While NFL Europe didn’t work, NFL officials believe with the league offering a regular season game in the market the perception of the product that’s being offered to the consumer is a key to the success the NFL is enjoying with today’s game.

"I think we've needed to show our regular-season product at the very highest level to really make this work, and that's what this is all about," said Mark Waller, the NFL's senior vice president of sales and marketing, who joined the league nearly two years ago in large part to build the sport overseas in a Newsday report.

"It's been a matter of refocusing the strategy and reallocating resources away from the NFL Europa league. Sports fans are very sophisticated; the digital age has allowed people to see the sport at the highest level. This is a way to bring the sport to them."

All that said – a one off game, does it really represent a strong indication the NFL is interested in the globalization of a business that generates close to $7 billion annually. And it’s well worth noting American networks pay the NFL $3.75 billion annually in rights fees. Before the NFL gets too far ahead of themselves in the internationalization of the NFL they would be best advised to consult with their media partners.

"I think there are some people who are enthusiastic, others are skeptical and others are unconfirmed," said Waller, who was born in Kenya to British parents and later moved back to England. He also lived in Spain and Greece before moving to the United States 11 years ago.

"With any new idea, especially one that's provocative, I would expect that. I think it's a matter of recognizing that if it's truly global and resonates globally, at some point it's proper that it's played out in a global way. But I also recognize that there are many cities in the U.S. that would like to host a Super Bowl or have an NFL team."

Goodell drew an interesting analogy from the music industry in making his case for why the NFL has to reach out to new markets.

"Speaking of the music industry, there's a fellow named Bob Dylan who wrote a song about changing times in the mid-'60s, when the NFL was in the process of overtaking baseball," Goodell said. “said: 'The old road is rapidly aging. You better start swimming or you'll sink like a stone.' For those of us in sports, it's happening again. And we'd better heed the call."

"[Owners] saw the need to try to expand the sport's profile and brand on a more global basis, recognizing as with the corporate world, you've got to reach beyond being a domestic product," Dolphins President Bryan Wiedmeier said.

The Dolphins were the team that gave up a home game to facilitate today’s game. Given the Dolphins 0-7 record, the loss of key personal, losing a home game at South Florida’s Dolphin Stadium might not have been the worst idea.

The NFL sold tickets ranging from about $92 to $183 depending on the exchange rate to Dolphins season ticket holders, who found flights for about $500 apiece. The league also arranged travel packages with tickets, but without airfare, for $1,699 to $3,749. Some 3,500 Dolphins season ticket holders are making the trip according to The South Florida Sun Sentinel’s Sarah Talalay.

Mitch Howard, who owns a suite and club seats at Dolphin Stadium, told Talalay he is using the game as something of a business trip. He's president of AQC Group, a Pompano Beach manufacturer of toner for laser printers that has a packaging facility in England. Howard, whose wife and mother will also be making the trip, has an apartment in London, too.

"I was thinking … to be able to see [the Dolphins] in London would be a great opportunity to have a vacation, visit the facility in London and introduce people in London to American football," said Howard, 45, of Boynton Beach. "We're going to bring some of the staff who have never seen a professional football game."

One of the issues the NFL faces in taking their game global – the leagues talent pool is virtually 100 percent American. Take a look at the rosters of Major League Baseball, National Basketball Association and National Hockey League teams -- the globalization of those sports goes well beyond where those leagues have played games (each league plays games on a regular basis outside of North America). The football known to most British citizens, most Europeans and most of the world is a sport most Americans call soccer.

"I wish I had the opportunity to bring a game overseas in the 1980s," Major League Soccer Commissioner Don Garber, the former head of NFL Properties who started its international office and ran it through the 1990s told The Washington Post. "People used to say, 'We don't want to see your second-best players.' "

"It was a unique experience for a guy like me who was in charge of NFL Properties for several years to have to sit down in an airport lounge in London or Tokyo and explain to somebody what a pigskin was," Garber said.

In 2005 the NFL played a regular season game in Mexico City. 103,000 football fans filled the stadium that day for the game between the San Francisco 49’ers and the Arizona Cardinals. The goal that day – to help create inroads into the Hispanic market for the NFL. A New York Times report suggested two years later the results speak for themselves.

According to Joaquin Del Rivero, managing director of N.F.L. Mexico, the game had a “beautiful and humongous impact” on the N.F.L.’s growth in Mexico. It helped spark 20 to 25 percent annual increases in revenue from media, licensing and sponsorship deals in Mexico the past two years, Del Rivero said.

“The first thing people ask me is, ‘When are we hosting the next game of football?’ ” Del Rivero said.

“Is there a risk? Yeah, potentially,” Waller said of global expansion. His chair faced the window that looks over Park Avenue and the world beyond. “I think there is a greater risk that it becomes a kind of global oddity, and kind of idiosyncratic within the world we increasingly live in.”

The man responsible for managing and promoting the NFL brand in Britain needless to say is one very excited sport executive today.

"The market is not saturated in the US yet, but it will be at some point in time," said Alistair Kirkwood, managing director of NFL UK, an offshoot of the league with a London office and 14 staff. The NFL commissioner, when he presented this to ownership last year, told them, "We are doing incredibly well by every consideration, but if in the next 20 years you want to grow the supporter base from 400 million to 4 billion, you're going to have to sacrifice, take some short-term hits and gamble". "This is a major statement and a major commitment." The London game is the first of two overseas matches that will take place in each of the next five seasons, with Germany, Mexico, Canada and China potential future hosts.

Organizers told The Manchester Guardian the NFL is keen to return to the UK on a regular basis and have ambitions to establish the sport here.

"Our vision in this market is to be a top five sport," said Mr Kirkwood. "We want to be behind football, rugby, cricket and formula one and within five years become the number five sport, measured in terms of television audiences and revenue. This game is an accelerator to help us move very quickly."

Earlier this month Goodell suggested playing a Super Bowl in London wasn’t out of the question.

"There's a great deal of interest in holding a Super Bowl in London," Goodell told reporters while appearing in Phoenix. "So we'll be looking at that."

That will never happen, never. The NFL likes the ability to leverage new stadiums for teams, billion dollar expansion fees and other economics benefits the league’s member teams could enjoy directly by hosting a Super Bowl. A Super Bowl in London, a Super Bowl played in a non-NFL based city, forget about that ever taking place, the league’s owners would never support the concept.

Increasing television audiences outside the U.S. would be preferable to playing more games overseas; Dallas Cowboys owner Jerry Jones told Bloomberg News is what’s needed now.

``That, to me, is where we're doing something tangible right now,'' said Jones.

Jones opinions aside another Texan who really understands and appreciates where the sports industry may indeed be headed offered this to the Manchester Guardian.

"Sports is truly a branded consumer product of the utmost value," Texas Rangers, Dallas Stars and a co-owner of Liverpool’s Premiership ‘football club’ Tom Hicks told the Manchester Guardian. "It's a unique media and in the US we have seen media revenues grow dramatically with the NFL. It's a big business and people look at the TV ratings globally for soccer and see that the English Premier League is the best product."

A lot has to happen if the NFL is going to play regular season game on a regular basis outside of the United States (and that doesn’t include the games the Buffalo Bills plans on playing games in Toronto starting next year). But too suggest today’s game is anything more than what it is; a one-off NFL regular season game, is really putting the cart before the horse. One step at a time, but at the very least today is a first step forward in the globalization of the National Football League and on the surface Roger Goodell seems to understand and appreciate that sentiment.

“We have to be innovative,” Goodell said. “We have devoted considerable resources already to the global growth of football – American Bowls [the NFL’s series of preseason games played outside the United States, which started in 1986 at Wembley], NFL Europe, bringing the football experience to new fans and establishing a European fanbase. But it was time for something new, to take the game to the widest possible global audience in new ways.

“First, staging regular-season games outside the US. It is bringing our best product to fans here and in other international cities. The NFL is the ultimate reality TV – three hours of unscripted and unrehearsed moments. Thirty million Americans watched the Dallas Cowboys-New England Patriots game a couple of weeks ago. It was the most-watched event in the US for the week by a margin of ten million viewers. Our goal is to translate America’s obsession into the world’s passion. This Sunday is just the beginning.”

For Sports Business News this is Howard Bloom. Sources cited and used in this Insider Report: The New York Times, The Washington Post, New York Newsday and The Manchester Guardian

Labels: , , , , , ,