The NFL has sent all 32 teams a questionnaire about their experiences in the league’s four-year-old global markets program, which grants teams commercial rights in certain foreign countries like what they have in their home cities. The survey will lead into a comprehensive review of the program’s rules, which have attracted critics for the limited commercial upside offered to teams working overseas.
Every team participates in at least one country, but enthusiasm and activity vary widely across the league. Even the biggest believers acknowledge that economic and policy barriers make it difficult for teams to drive meaningful revenue, which in turn makes it difficult to justify the big investments required to develop fans from scratch.
League executives are quick to note that international growth has always been intended as long-term investment. American football is a “challenger brand” in most places outside the U.S., they note, and teams should not expect big increases in revenue or profits overseas as they invest in growth for many years. But they acknowledge there could be improvements made.
“GMP was never designed to be a short-term revenue play, and we don’t want to lose sight of that,” said Bobby Gallo, the NFL’s senior VP/club business development. “But we also don’t want the long-term view to be an excuse for not helping clubs find tangible wins along the way. Striking that balance right is a big part of what we’re focused on.”
Speaking privately, club executives note that even the most modest of fan-development executions in far-off countries, such as watch parties or flag football clinics, are extremely expensive. On the revenue side, they say, the vast majority of the actual value of the NFL abroad is connected to the games played, which are league-controlled properties. Also, team-gathered fan data overseas is controlled by the league for legal reasons, and any attempt to sell a team sponsorship can be stymied by league activity in that category. The threshold for when teams must share revenue is low, too.
In theory, the idea is that, after years of all this hard work, every team would profit handsomely when the league one day signs a big-dollar international media rights deal, à la the English Premier League. But that doesn’t do much for executives who must justify expenses and payroll on a day-to-day or annual basis, and they argue that big payoff could come sooner if they had more incentives now.
===
More from Sports Business Journal
- How NBA’s apron turned into a hard salary cap
- Michigan AD Warde Manuel to step down at end of year
- Ravens add official chicken
===
Start your day with SBJ Morning Buzzcast, bringing you the hottest stories in sports business every morning in under 15 minutes. Sign up for SBJ’s free newsletters, and dive deeper inside the industry with all the latest sports business news here.
