The Logistics of an NFL Team in London

 

In the voice of Vin Scully:  

Hello, Checkdown! Welcome back to this exciting event as we are now about to see the sports journalism debut of Austin “Alby” Albertson, from Petaluma, CA.   Believe it or not, I had a chance to sit down with Alby before the game, and he is an interesting young man.   Over our conversation, he claimed that the Oakland Athletics baseball franchise was the greatest franchise in all of sports.   I don’t know if I can agree, but he certainly is not short of opinions.”

 

Outrageous, yet obligatory, introduction aside, I am Alby, Checkdown-superfan-turned-sportswriter. I have many opinions and perspectives, but I like to focus on the business of sport, and in that fashion, let’s talk about money, the NFL, and the Union Jack.

In 2007, the NFL launched their International Series, beginning to play regular season games abroad, most notably in London.   They have played 14 games in the city, all of which have been at Wembley Stadium, one of the most recognizable stadiums in international sports.   The NFL would also like you to know that they have sold out every game played at Wembley, amongst other statistics on how well the NFL is trending in England.   All of this is fine and well, but what possibility is there for a team to be located in London?  What preparations need to be made? When will it be ready?  How much should ticket prices and merchandise be?  Who will own it?   These are all business and logistical questions that the NFL must have answered before the league or the NFL team owners can make any sort of plans for the future in London.

Luckily, perhaps the biggest issue they have yet to face is being taken care of right now, and the NFL didn’t do anything.

The Tottenham Hotspurs English Premier League football club is in the midst of building a brand new stadium in London right now, which is specifically designed to support both an NFL and an EPL team.   Obviously Tottenham will fill the role of the EPL team, but they are leaving the door open for an NFL franchise in London where both teams could coexist.   If there was ever a sign to the NFL that London should be considered, this is it.  Premium location is taken care of, state of the art facility is taken care of, advertisers are taken care of, advertising the new franchise will be taken care of.   This is a major hurdle the NFL no longer has to worry about because Tottenham is offering it to them for free.   Daniel Levy, chairman of the Tottenham franchise has been quoted by Ashley Fox of ESPN that the stadium “needed to be viewed as a combined joint soccer and NFL stadium. In fact, the way we designed the whole experience is one side of the stadium is a dedicated soccer entrance and the other side is a dedicated NFL entrance.”

 

 

 

Now that the stadium is all but checked off the list, the next question is the potential financial success of the new franchise.  By partnering with a popular club like Tottenham, all of their supporters will be exposed to the NFL franchise when they attend matches, which will boost local support.  In addition to the support of the fans of Tottenham, all of the business that sponsor Tottenham, and more importantly their stadium, will by extension be sponsoring the NFL franchise.  It would make sense that the owner of the new London NFL franchise would contribute to stadium costs and upkeep, and in exchange would receive an equal proportion of advertising revenue and other revenue streams offered by stadium fare, i.e. concessions and other consumer goods.   This ensures that the new franchise would have at least one guaranteed revenue stream upon moving to London.

However, despite the NFL’s success in London thus far, as well as using Tottenham’s position amongst fans and companies, the franchise may face some problems becoming profitable, at least to the extent NFL owners are used to.   The first issue is attracting fans, which will come with time and exposure.  However, attracting fans will be difficult when the average NFL ticket price is $85.83, according to statista.com, while the average EPL ticket price, the most popular sports league in England, is $40.92, converted from English pounds, according to www.independent.co.uk.   While people may support the franchise by watching televised broadcasts, how can the NFL expect fans to pay almost twice as much for NFL games as EPL games when the team is first starting? They would be offering a product with much, much less public demand for twice the price.   On the other hand, all of the games at Wembley have sold out, and tickets up in the nosebleeds from Ticketmaster for the game between the Colts and the Jaguars on October 2nd of this year are around $109.03, converted from English pounds.   If the games this year are going to follow the trend of its predecessors, then this game should sell out as well.

We also see a price disparity on merchandising, in particular jersey prices.   The average EPL jersey price, according to the BBC, is $51.24, once again converted from English pounds.  Meanwhile, the NFL has jerseys selling for $100, $150, and $295 a shirt.   Here we have NFL prices being 2 to 6 times higher than EPL prices for the same product.   So the NFL will be asking British citizens, once again, to buy a much less popular product for much higher prices.

That being said, what’s to stop the NFL from charging higher prices anyway?  The problem will be that there is not a high enough established demand for the product.  Yes the games at Wembley sell out, but should that be considered a direct indicating factor of interest, or discounted as a novelty item of sorts?   Once demand is established, prices can go up, and NFL owners can start to see the profits they are used to.  To continue the argument for both sides of the debate, a stat that counters that idea is that both the highest percentage of the English NFL fans live in the southeast region according to statista.com, in addition to that same region having the highest median household income in the country, according to The Guardian.   The southeast region includes London, so the new NFL team, while charging higher prices than EPL teams, while be focused in its highest demanded, and wealthiest region of the country.

 

There is a cultural difference between NFL owners and their financial thinking from that of other leagues.  If there is any American sports league, whose major decisions concerning the league focus on financial value, it’s the NFL, just ask St. Louis.   The NFL, and by extension NFL owners, are not afraid to make decisions that will make them more money, and I’m not convinced that a team in London will make them more money than they already are, not at least without a serious trial period.   This is a true test for NFL owners if they are willing to spend some serious dough, in order to make some serious dough.   As nice as AT&T Stadium is, its pocket change for Jerry Jones, but that was an investment that saw immediate return, since it became the fanciest stadium in all of the NFL, in a league where fanciness is oftentimes celebrated.   The question now is will the NFL owners be willing to commit to a franchise that may very well lose money in its infancy, in order to establish a mind-bogglingly lucrative sports empire.  If London is successful, imagine what the limits are, if they even exist.  Frankly, I don’t think NFL owners are ready to pull the trigger on a deal with that much potential for loss, despite its potential for success, just yet.

There are other cultural differences as well concerning the fans.  Many EPL teams don’t have recognizable mascots incorporated into the name.  There is no Manchester City Lions.  No Liverpool Panthers.  And what would London NFL team be? The London Red Coats? And besides that, the NFL is the last major American sports league that is distinctly American, and only takes place, with minor exception recently, on American shores.  Say the London team is the #1 seed in the NFC.   Is the NFC championship game going to be in London? Are Americans ready for the Super Bowl to be in London? Will they ever be?   I think the answer is relatively clear.   I think there are some major financial and cultural factors at work here, and a league that, while still outrageously profitable and financially driven, is facing some domestic issues and public perception problems, and this decision may ultimately come under another NFL Commissioner.

 

In the voice of Vin Scully:

 

This kid, he has some pause gumption.  He’ll stick around.


Featured image courtesy of Tottenham Hotspur.    Image in article courtesy of www.independent.co.uk

 

Posted by Alby

Ride or die Oakland Athletics fan. I enjoy sports talk of any kind, but I find that sports business often gets overlooked. Additionally, I am huge movie guy; am from California/New York, but think Montana is the best state in the Union; and Classic Rock is the soundtrack to everything.

Website: http://Check%20Down%20Sports

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