The NFL is, by most metrics, the ‘richest’ sports league in the world. The league’s franchises usually dominate annual lists like Forbes’ Most Valuable Sports Teams, and we are certainly aware of the singular enterprise of individual events like the Super Bowl. Even the NFL Draft has become a multi-day semi-cultural event.
However, one of the interesting things about the NFL’s ability to generate revenue is that it is, by and large, a US-centric product. The Premier League, for instance, often cited as the most popular (but not richest) sports league, has a massive global footprint and is hugely popular on every continent. The NFL is playing catch-up in that respect, but it is trying to change things. And its most obvious tactic is shipping the product, i.e., regular season games, around the globe.
Record number of NFL games abroad next season
There are nine NFL games to be played abroad this upcoming season, including the first game in Australia. That’s a record number, and the NFL has intimated that there is room for expansion in the future. It may not seem like a lot, but each team only plays 17 games per season, compared to 82 for NBA teams and 162 for MLB teams. That is potentially the key for the NFL: Each regular season game feels consequential – like a big deal – so it feels like a special occasion when the roadshow travels abroad.
The NFL’s finances are driven by two separate areas – local and national. While those terms might seem self-explanatory, there is a bit more to them. National takes in TV money, which includes a system for sharing revenue between teams, whereas local takes in elements like ticket sales and concessions. There is room for domestic growth in both those areas. For example, it has been widely cited that the legalization of betting on NFL games in many states can contribute both directly and indirectly to bigger revenues for teams because it drives larger TV audiences and opens up gambling sponsorship.
TV money is the main goal
One interesting point that has been cited, however, is that television money dwarfs everything else. Sure, teams want to fill their stadiums on gameday, and they’ll want fans to buy jerseys and splurge on concessions, but that revenue stream is relative peanuts compared to the money coming from the networks. A team will make millions of dollars by selling out their stadium for the 7-8 home games and, hopefully, a handful of postseason games, but the TV deals are valued in hundreds of millions per team; billions for the league overall.
Which takes us back to the trips abroad. A trip to London or Melbourne will be quite lucrative for the participating teams, but it’s all about the bigger picture: growing the NFL’s stature in those countries. The measure of that success is not filling stadia, which is a given, but signing bumper television broadcast deals. Despite the success of NFL International Games, the league remains a niche-level product in countries like Germany and the UK. The games are novelties, one-off special attractions, but their purpose is to build interest in the NFL, which should – the league’s hierarchy hopes – eventually lead to television deals that get closer to the size of the domestic ones.
However, there should be a note of caution. In chasing the international TV dollar, the NFL runs the risk of disgruntled fans at home, which could tap into its core market. Primetime games in Europe and Australia can be problematic for television audiences at home, so that could impact domestic viewing figures. Furthermore, there is the simple risk of creating a disconnect between local fans and their teams when teams play more on the road.
Overall, it’s hard to fault the NFL’s strategy, nor doubt its success so far. We can already see evidence, with examples like global Super Bowl viewing figures, that it is working, even if the league has bigger ambitions in the longer term.
