1. The Globalization of the NFL
Krista Haswell
Jason Moore
Joe Weber
Tom Poe
Dan Rousseau

2. The NFL is highly successful in the US market
The NFL is highly successful in the US market. After unsuccessful attempts to expand internationally, how can the NFL generate additional international interest in the sport and the league to increase revenue?

3. Why did prior international ventures fail. Were there any successes
Why did prior international ventures fail? Were there any successes? Why have other US based professional sports leagues found success internationally while the NFL has not?
What is the value chain followed by US professional sports leagues? Where does the NFL gain value?
What does the NFL do to generate revenue? How can their revenue be increased? Should their revenue generating strategy differ domestically versus internationally?
Does the NFL need to popularize American football to be successful internationally? Does this require the NFL to increase or develop international players, teams, or leagues?

4. Why did prior international ventures fail. Were there any successes
Why did prior international ventures fail? Were there any successes? Why have other US based professional sports leagues found success internationally while the NFL has not?

5. NFL International League Evolution
1991
1994
1997
2006
World League of America
The World League
NFL Europe
NFL Europa
Intent
New league designed to develop NFL players in the spring and spread the game of football
Doesn’t compete directly with NFL
Partnered with Barcelona Futbol Club
League evolved to be used as testing grounds for NFL players, coaches, and referees
Effect
Low game attendance
Best players not sent to league; NFL coaches didn’t want unknown coaches developing talent
Partnership failed; Barcelona never gained popularity, got into financial trouble, and disbanded in 2003
League disbanded in 2007 after losing $20 million per year
League never consistently produced star NFL players
Was the NFL Europe League the same product as the NFL? Did this impact the league success?
Is it possible to have a successful venture that is only intended to produce star players that will eventually move to the NFL?

6. NFL Europe League Results
Did the attendance drop off after the first two seasons because the fans noticed it was an inferior product to the NFL?
Does the stagnant attendance growth mean the league failed to build interest in the sport or the product?
Were there any successes in this league?

7. Concentration of NFL Europe Teams
Could the German market be developing to support the NFL fan base? Why is this market different from the others?
Can the German market be expanded further to increase revenues?

8. International Success of Other US Professional Sports Leagues
Could a high percentage of international players in a league be the key to international success?
If so, what can the NFL do to generate this level of international players?

9. International Success of Other US Professional Sports Leagues
Baseball
Basketball
Hockey
Football
International Independent Grassroots Growth
Yes No
Is grassroots development key to pulling international players to professional leagues?
Have independent development efforts aided in the international success of professional sports?
Does the NFL need to focus on the grassroots level?

10. International Success of Other US Professional Sports Leagues
MLB
NBA
NHL
International Strategy
Mixture of broadcasting games internationally and grassroots development
Broadcast games internationally
Play live games internationally
Successful?
Yes
Is a top-down marketing strategy the best way to be successful internationally?
Could the NFL experience the same success by using a strategy comparable to the other professional sports leagues?

11. What is the value chain followed by US professional sports leagues
What is the value chain followed by US professional sports leagues? Where does the NFL gain its value? Where are the opportunities for the NFL to gain additional value?

12. Value Chain for US Professional Sports
League Value
Production of the game
Sale of Merchandise
Acquisition of Talent
Value is gained in only three specific areas so each is of great importance to the NFL.
Where does the NFL currently gain its value and how is its value proposition impacted by international strategy?

13. Step 1: Acquisition of Talent for US Professional Sports
How does talent enter a league?
How are skills developed before entering a pro sport?
Where does talent come from?
Draft
In childhood through family interest or participation in organized sport
Domestic Players
Free Agency
In high school and/or university team play
International Players
Trades
Grassroots efforts to promote sport
Development Leagues
Minor Leagues
Other Pro Leagues
Typically not sources for NFL talent
Acquiring the best talent increases value of the league. The NFL already has the best talent available because there is a lack of international leagues from which to find players.
Are there other opportunities to find talent or should the NFL focus on other steps in the value chain?

14. Step 2: Production of the Game for US Professional Sports
Technology
Seating
TV Broadcast
Mascots and Cheerleaders
Hype
Stadium Amenities
Half-time Shows
Better fan experience = better value for NFL through increased revenue
The NFL can exploit advancements in technology to bring more of the fan experience to those not in attendance .
In what ways can the NFL enhance game production to appeal to a greater audience abroad?

15. Opportunities through Technology
NFL
Mobile
Television
Radio
Internet
Video Games
The NFL can continue to benefit by advancements in technology because technology increases the NFL’s exposure.
Which technology provides the best opportunity to fuel growth? Which generate the most revenue?

16. Step 3: Sale of Merchandise for US Professional Sports
(most value for NFL)
Television rights
Stadium generated sales
(Inc. Sales=Inc. Revenue=Inc. Value)
Team paraphernalia 1 2 3
Increased stadium generated sales and TV rights could expose the NFL to a greater audience and provide additional value through an increase in sale of team paraphernalia.
With a limited number of games and attendance, is the best way to increase value through increased sales of TV rights abroad?

17. Financial Comparison of US Professional Sports Leagues
Operating Margin
MLB
8.15
NFL
13.2%
NBA
9.9%
NHL
5.9%
Higher operating margin indicates better profitability. Average team value is also a strength of the NFL. The NFL must consider the impact on both when considering an international strategy.
Why is the NFL’s operating margin so much higher and can it be sustained with international expansion?

18. Ticket Sales Comparison of Professional Sports Leagues
MLB
NFL
NBA
NHL
Average Game Attendance
32,516
68,034
17,497
17,476
# of Regular Season Games per Team
162 16 82
Average Ticket Price $ $ $ $
Less games = less costs incurred in production of games throughout the season Less games = ability to demand a higher ticket price
The number of games directly impacts the value of the NFL. Each game is more important to the NFL than to the other leagues because higher attendance is concentrated in fewer games.
In terms of international expansion, how can the NFL capitalize on the value provided by each game?

19. What does the NFL do to generate revenue
What does the NFL do to generate revenue? How can their revenue be increased? Should their revenue generating strategy differ domestically versus internationally?

20. Licensing Fees & Merchandising Sales Television and Media Rights
NFL Revenue Streams
NFL
Licensing Fees & Merchandising Sales
(Includes Sponsorships)
Television and Media Rights
(National & Local)
Ticket Sales
(All stadium-generated revenues, ex: concessions)
Should the NFL focus on all three revenue streams , a combination of the three, or just one?
Which revenue stream stands to have the biggest gain from international expansion?

21. NFL Ticket Sales (includes stadium generated revenues)
MLB
NBA
NHL
Total Ticket Revenue
$1,257,500,000
$2,007,000,000
$1,050,900,000
$1,047,300,000
Total Games Played in Season
256
2430
1230
Average Revenue Per Game
$4,912,109
$825,925
$854,390
$851,463
Average Ticket Price
$72.20
$25.40
$48.80
$48.70
NFL Ticket Price Compared to Other Leagues
n/a
2.85X
1.48X
The NFL is able to generate more revenue per game and demand a higher premium for its tickets by having substantially fewer games than other US professional sports teams.
Adding additional games risks causing the NFL to lose its ticket premium advantage, resulting in little to no revenue increase.

22. NFL Licensing Fees and Merchandise Sales
Total Merchandise Revenue $1.6877B
The small portion of international sales indicates that the NFL has an opportunity to increase this revenue stream substantially.
To capitalize on this opportunity , the NFL must be exposed to a greater and more attracted international audience.

23. NFL Broadcasting Revenue
Breakdown of Total NFL Revenue
Broadcasting revenue generated by television provides the most revenue for the NFL and given that there is substantially less international demand, it can be assumed that international broadcasting generates a smaller portion of overall revenue.
By not focusing on the dollar amount of broadcasting revenue generated internationally in the short-term, could trying a “push” strategy, where international TV networks or satellite stations carry all regular season games, have the potential to generate additional interest in the NFL abroad, thereby helping the NFL in the long term?

24. Broadcast Revenues vs. Number of Games
As with ticket prices, the NFL is able to demand a premium for its broadcasting rights by having fewer games compared to other US professional sports leagues. Adding additional games might not actually increase revenue.
Does the NFL have any opportunities to increase broadcasting revenues or have revenues in this category topped out? With the NFL sharing all national and local broadcasting revenues among the teams, would an international team be able to contribute at the same level as domestic teams?

25. Total Revenues of US Professional Sports Leagues
The NFL has earned so much revenue without large international positions like its peers.
Does this mean the NFL has maximized US revenues? Does the NFL need to expand internationally with these revenues?

26. Does the NFL need to popularize American football in order to grow their international presence? Does this require the NFL to increase or develop international players, teams, or leagues?

27. Timeline of International Exposure
Football Lags in International Exposure
Cubans introduced to baseball
NFL’s first international exhibition game in Canada
1866
Japan introduced to baseball
1950
China introduced to basketball
First NFL Football Game Outside of North America
1867
1883
1976
1866
1879
1891
1903
1915
1928
1940
1952
1964
How can the NFL expand their product into international frontiers when football itself has been lagging other sports?
Why has it taken so long to internationalize the game of football?

28. Average Equipment Cost per Player by Sport
Is the high cost associated with playing football hurting the international expansion of the sport? Could this be why the sport isn’t played outside of the US?

29. International Leagues and Teams
Player Development Source
Teams outside US
International player impact
MLB
Minor leagues associated with MLB
College Baseball
US Youth development programs
Professional leagues abroad through free agency (Japan)
Developmental camps (Latin America and South America)
Yes
NBA
College Basketball
Professional leagues abroad (Europe and China)
Development academy/camps (Europe)
NHL
College Hockey
Professional leagues abroad (Europe, Russia, Canada)
NFL
Mostly College No
Is an existing infrastructure necessary in order for the NFL to gain access to a global talent pool?
Given its success, does the NFL need international players?

30. NFL International Ventures
Product
Description
Measures of success
Results
Super Bowl
Televise single championship game event
800 million viewers across 150 countries watched the 1997 game
Most international viewers are thought to be expatriate Americans; some interest globally to watch the highest level of play
SUCCESS
Preseason/Exhibition Games played abroad
Hold exhibition games outside USA; first game played in Canada in 1950, 1976 in Tokyo, American Bowl
Games of little significance/meaning; no real strategy around expansion of product
FAILURE
The World League/ NFL Europe
Created to spread game beyond USA and develop players, coaches, and officials
After initial introduction in 1991 average game attendance dropped below 20,000 after 1992; championship game attendance was better when rivalry involved (Germany)
Partnership with Barcelona Dragons failed. Barcelona never gained popularity, got into financial trouble, and disbanded in 2003
International Development Practice Squad
Started in 2004 to expose foreign born players to the NFL
Has not developed talent into NFL players
International Series
Hold regular season games outside US, introduced in 2005 (Mexico City), (London)
Record numbers at game in Mexico City and 20% increase in revenue from Mexico; television viewership in UK doubled by 2010
Success in target markets
International success has only been achieved through single game events showcasing the highest level talent. Should the NFL schedule more regular season games abroad?

31. NFL Changes Its International Strategy
Mexico
Played first regular season game in Mexico in 2005
London
Played regular season games in London between 2007 and 2010
Revenues from Mexico increased 20% in the following years.
Television viewership in London doubled by 2010.
Regular season games played abroad = increased international interest where played
How can the NFL duplicate this success?

32. Germany…Formula For Success?
Youth Development
Leagues
NFL Europe Professional Games
Higher attendance and increased interest
Germany is the only other market where there is a significant youth development program for American football, resulting in interest despite the lower quality NFL product offered.
If youth are introduced to the sport of football, will they be more receptive to the NFL?

33. Strategy for International Success
Increased grassroots development of American Football
Increased outward exposure to NFL games
NFL
International Success
Both initiatives are necessary for the NFL to find the highest possible success in international markets. How can the NFL execute this strategy?

34. Recommendations – Top-Down
Proposal
Value Impacted
Benefit
Play a few regular season games in Mexico, England, and Germany
Production of Game
Sale of Merchandise
Exporting the NFL’s best product (regular season games) provides the best opportunity to increase demand for the game.
Use the internet and mobile devices to bring the NFL to international markets
The advancements in mobile technology and widespread use of the Internet provide the NFL an opportunity to market the league without the costs of physically bringing the league to new markets.
Expand NFL TV broadcasts internationally
Broadcast revenue is a key component of the NFL revenue stream and the NFL should capitalize on additional markets. It is a low cost approach to expanding the reach of the NFL.
Modify production of game to relate to the local international culture
Preference of international fans must be taken into account to create a wider appeal.
Don’t add additional NFL games to regular season just to play internationally
The NFL generates considerable value through its strategy of high ticket price/low number of games.

35. Recommendations - Grassroots
Proposal
Value Impacted
Benefit
Invest in youth development of the game of football internationally.
Sale of Merchandise
Acquisition of Talent (Long-term)
By expanding the knowledge and enjoyment of the sport, the NFL could realize increased demand in the broadcasted games and merchandise.
Incentivize independent football ventures internationally
This is a long-term strategy to build the fan base and provide the possibility of international players.
Refrain from creating International Leagues
Acquisition of Talent
Previous leagues have not been successful and there is no evidence that indicates that these will be successful in the near future.