National Football League
Franchise in
London, England
Matt Collins
SPM 499-505
Professor Vazenios
"I think if we can continue to have that success and continue to build on what we've
had already, I think it's realistic to think that a franchise could be here," says the National
Football League Commissioner Roger Goodell. With unbelievable television ratings, sold out
stadiums, and high sales in team apparel, the National Football League has become an
unstoppable financial force in the United States. The NFL is always looking for new ways to
minimize costs and maximize revenue. Having a team playing internationally is an extremely
appealing idea for the NFL. As the NFL inches closer every year to landing a professional team
in London, England there is still a significant amount that needs to be accomplished. When the
NFL first introduced football to Europe they ran into a problem because the game had little
exposure. The NFL has to challenge itself to educate all potential fans and bring adoption of the
sport in order to create a comparative advantage. Global branding has been a main goal of the
NFL and since 2007 they have had success playing games internationally. There is no doubt that
the NFL has popularity in England with 11 games already played in Wembley Stadium since the
2007 season and 3 more games scheduled for the 2015 season. These games have proven very
important as the NFL attempts to increase their brand awareness and recognition throughout the
global market. As the NFL implements and continues to use grassroots strategies to reach out
and educate young potential fans while developing brand recognition, there must be an
understanding that it will take time for the European sport culture to fully accept the NFL.
The National Football League makes more money than any sport league in the world.
They make upwards of $10 billion in revenue through ticket sales, merchandising, venue revenue
advertising, and licensing. Ticket sales can account for approximately $51 million a season for
each team. In 2010, NFL merchandise sales reached $2.1 billion (Top Five Revenue Sources
That Drive Value for the NFL, 2013). Just for a 30 second commercial during the super bowl
will cost advertisers $4 million. During the regular season advertiser spend upwards of $3 billion
(Top Five Revenue Sources That Drive Value for the NFL, 2013). “The National Football
League and its 32 teams raked in a record-setting $1.07 billion in sponsorship revenue for the
2013 season, an increase of 5.7 percent over the 2012 season.” (Ejiochi, 2014) Microsoft and the
NFL have recently teamed up in a $400 million deal that the exclusive right for Surface tablets
and other Microsoft technologies on the sidelines for all 32 teams (Ejiochi, 2014). Another major
source of income comes from partnerships with television programs. The NFL announced earlier
in the 2014 season that the league and DirecTV have reached an agreement on a new deal that is
worth $1.5 billion per year for the next 8 years.
Organizational Strengths
During the 2013 season 34 out of the 35 most watched programs on television were NFL
games. This does not include Super Bowl XLVIII, between the Seattle Seahawks and Denver
Broncos, which drew a United States viewership record of 111.5 million (Boudway, 2014). Not
only is the NFL considered the most popular and viewed sport in the United States it is also the
most lucrative sport in the world pulling in over $9 billion in revenue during the 2013 season
(Boudway, 2014). The NFL has seen success when playing games in Wembley Stadium located
in London, England. The NFL’s three games in London so far this 2014 season have produced
about $32 million in ticket revenue (Barrabi, 2014). The Sunday, November 9th, 2014 matchup in
Wembley Stadium between the Jacksonville Jaguars and the Dallas Cowboys was the most
profitable game yet, with a sellout crowd of 83,603 fans producing $10,617,581 in ticket sales
(Barrabi, 2014). Out of the 11 games played so far in London, 9 of those games had an
attendance of at least 83,226 fans in attendance. The NFL average fan attendance in the 20092010 season was just over 67,000 fans per game. "We have around 3 million, what we call avid
fans in the U.K., who are watching week in, week out. Then we have around 8 million casual
fans. Both of those numbers are growing, and on Sky Sports – which is kind of the home of the
NFL in the U.K.— we are now the fifth most watched sport," said Mark Waller, NFL's vice
president of international.
Organizational Weaknesses
A weakness of the NFL is that football is significantly lower on European society’s
important sport organizations. Many fans in the United Kingdom are not familiar with the NFL
and do not understand the rules and regulations of the game. England has a rich and deep rooted
history involving sports and fans have been loyal to the ones that United Kingdom created.
England’s national sport is cricket but its most popular is by far soccer. Sports in order including
soccer, cricket, rugby, badminton, and tennis are all considered more popular in England than
Football. Although 20 out of 32 NFL teams all valued at a minimum of 1 billion the top 3
wealthiest franchises in the world are all soccer teams. This includes number 3 Manchester
United valued at $2.1 billion, who plays in the English Premier league (Mahfood, 2014).
Internal or Environmental Opportunities
It seems that the NFL is in the maturing stage of the product life cycle and with fewer
opportunities to increase the domestic brand in the United States they must look elsewhere.
As the NFL try’s to reach its goal of $25 billion in revenue by the year 2027, London looks very
promising in helping to accomplish that. “Based on the league’s research, the NFL has 12
million fans in the U.K. According to the NFL, since 2007, the NFL has improved from being
the 18th-most-watched sport on Sky Sports to No. 6. Waller said it’s safe to say that the NFL is
the fastest growing sport of Sky’s audience.” (Illich, 2014) London and the surrounding
metropolitan area have an approximate population of 21 million residents and the United
Kingdom has an estimated 64.1 million people. The opportunity to attract new and young fans
throughout the United Kingdom and Europe will have enormous potential. The first game in
London was the October 28th, 2007 matchup between the New York Giants and Miami Dolphins.
After just 3 days of announcing that the game will be played in London there were more than a
half of million requests for tickets. “We could have sold out all the seats 10 or 11 times over.”
(Milham, 2008) During the NFL’s second consecutive game in London the first 40,000 tickets
were sold out within 90 minutes of going on sale. “This proves that our event is one of the most
eagerly awaited in the British sports calendar.” (Milham, 2008) Just this year on September 4th,
2014 the NFL and Sky sports announced a new television deal that would broadcast 80 NFL
games a year (Illich, 2014). Since the NFL is a relatively new sport to many United Kingdom
fans they are still learning the concept and rules of the game. In order for the NFL to gain more
popularity they must attract the younger generation of sport fans. The best way to gain these fans
is to get them involved with the sport early on by using grassroots strategies. The more influence
the NFL has on European fans the more success they can possibly see.
Internal or Environmental Threats
There are many threats to the NFL when it comes to locating a professional team in
London, England. Possibly the biggest threat to the NFL internationally is the sport of Rugby.
Aside from Canadian Football, Rugby leagues are the most similar sport to the NFL. Both games
involve a limited number of tackles and downs along with scoring touchdowns or tries taking
precedence over goal kicking. Both playing fields are also very similar with increments of 10
yards marked from each end along with goal posts situated in each scoring area. “The IRB
Rugby World Cup is the third biggest sporting event on the planet, and this success on the global
stage is only possible because of the thriving school, university and club competitions in England
and around the world.” (Rugby Union) Another immediate threat to the NFL is the global
popularity of soccer. Soccer is the most popular and watched sport throughout the world and in
the United Kingdom. “The United Kingdom's English Premier League is the people of Earth's
choice for sporting entertainment. An incredible 4.7 billion people, close to 70 percent of the
planet's population of 6,775,235,700 , watch the soccer league on television, according to a new
study by Sport+Markt consulting firm.” (Maller, 2011)
Market Selection Decisions
Selecting a target market for the NFL in London was taken under careful consideration.
Factors such as demographics, socioeconomics and geographic regions and the size of the market
were all taken into effect. The NFL marketing team considered the various personalities and life
styles of citizens to find the best target market. This process was done through segmentation,
which allowed the NFL to select a primary target market.
Segmentation
Age
The median age of a person who watches the NFL in 2013 was 48.4 years old. While the
average male who watches the NFL on Fox is 44 years, viewers of the NFL on ESPN average 43
years old. The average age of women who watch NFL games are 46 years old (Canfield, 2002).
“18 to 34 year olds made up 22 percent (15 percent male; 7 percent female) of the NFL’s viewers
for games broadcast on Fox and CBS last season.” (Canfield, 2002) Meanwhile 29 percent (20
percent male; 9 percent female) of the NFL’s viewers fall between the ages of 35 through 49. “40
percent who watch are 50 or older and just one in six - 17 percent – are at least 65.” (Canfield,
2002) The median age for a person living in the United Kingdom is 40.5 years old. The largest
age group in London is those 25 to 29 years old which makes up about 14 percent of the
population. Attracting a younger fan base would be the most productive and ideal situation for
the NFL. Luckily in England a third of the population ranges from birth to 29 years old (Swan,
2012).
Gender
Gender will be the next segmenting factor. Males and females respond to marketing
tactics in different ways. It is critical to the marketing plan to know how each gender will reply.
We would like to appropriately reach our target market by using these different methods.
Currently there are more than 31 million men and over 32.2 women living in the United
Kingdom (Swan, 2012) In an Adweek/ Harris Poll survey of 2,374 U.S. adults surveyed
online between September 9 and 13, 2011 by Harris Interactive, it found that almost two thirds of
U.S. adults say they currently watch NFL football, 64 percent, including almost three quarters of
men, 73 percent, and over half of women, 55 percent (Gorman, 2011). When taking into
consideration that the male population finds greater interest in watching NFL games it is
apparent that the NFL will focus on attracting the vast majority of the male population.
Socioeconomic
The average viewer of the NFL makes about $55,000 a year in the United States
(Canfield, 2002). In the United Kingdom the average person will pull in a salary of 26,500
British Pounds or about $41,400 US dollars (Maguire, 2014). While 91 percent of United
Kingdom high school students graduate only 77 percent of United States students graduate. In
comparison, 46 percent of college students graduate in the United States and 65 percent of
college students graduate in the United Kingdom (Lorsch, 2011). These socioeconomic factors
help the organization figure out what type of lifestyle we are conveying to. This allows the NFL
the opportunity to find out what the citizens of the United Kingdom are willing and able to spend
on sporting events.
Positioning
NFL games are known for being a fun friendly environment welcoming to all. The NFL
would like to maintain this relationship with their fans. The NFL will still position games as fan
friendly, but would like to also have their team viewed as a fierce competitor. Football is a
contact sport that involves pushing, shoving and hard hits on the field. While we don’t want to
bring those characteristics to the spectator area, we would like the fans to feel as if they are just
as involved.
Marketing Mix Decisions
Product
The NFL is a very proud organization with a rich tradition and a long history of success.
Their mission and values is “to present the National Football League and its teams at a level that
attracts the broadcast audience and makes NFL football the best sports entertainment in the
world.” (http://www.nfl.com) The NFL wants to protect the integrity of the game at all costs,
have athletes preform at the highest levels while showing teamwork and sportsmanship, keep
tradition but show innovation, have diversity throughout the league, and to learn and grow as an
organization. Bringing a NFL team to the historic city of London will provide fans and spectators
with an exciting and fan friendly sport. There has never been a Professional Football franchise
located in London or anywhere outside the United States. European fans will be able to watch a
new and thrilling contact sport on television or live at Wembley Stadium.
Price
Fans of the NFL have a very high demand for tickets to attend the games, which allows
the NFL to drive up the prices without a drop in attendance. The average cost of an NFL ticket in
the United States during the 2014 season is $84.83. “Nine years ago the average ticket cost was
$62.38, and prices have increased on average by more than 30 percent since.” (Bloom, 2014) A
main goal of NFL teams is to fill their stadiums as much as possible to generate maximum
revenue. Out of the 32 teams in the NFL, 24 of the franchises have season ticket waiting lists
(Bloom, 2014). The average ticket price for an NFL game at Wembley Stadium in England is
$119 per ticket. "If you were to play the London game revenues in comparison to the U.S.
revenues, the revenues for the London game would be in the top eight ticket revenues." (Illich,
2014) In comparison to an English Premier League team like Arsenal, the average ticket for a
game is about $98.65 (Illich, 2014).
Place
Wembley Stadium has hosted all 11 NFL games dating back to 2007 and has three more
anticipated games scheduled for the 2015 season. Located in Wembley Park London, England
the stadium opened in 2007 after being built on the site of a previous Wembley Stadium which
was demolished in 2003. The stadium has a maximum capacity of 90,000 spectators, which
ranks it the second largest stadium in Europe and the largest in the United Kingdom (Wembley
Stadium ). The stadium includes a semi retractable roof and the infamous 440 foot Wembley
Arch. The Australian firm Multiplex was in charge of constructing the stadium at a cost of
slightly under $1 billion U.S. dollars (Wembley Stadium ). It is one of the most expensive
stadiums ever built, behind MetLife Stadium, and has the largest roof covered seating capacity in
the world (Wembley Stadium ).
Customer Relationship Plan
In order to keep a loyal fan base, the NFL must build a strong and long-term relationship
with new potential fans. As an organization the NFL needs to make sure that the first impression
of the fans is positive. The NFL wants fans to continue to keep attending games. As long as the
fans’ needs and wants are met, then the NFL has done its job. The second part of that job
requires the fans to return to more games and hopefully receive new season ticket holders.
Having a good relationship with the fans will potentially help with future purchases of not just
tickets but also merchandise. Satisfied fans will more than likely spread the word of the NFL,
which will interest more potential fans.
Merchandise/Jersey sales
The NFL makes a killing off of merchandising and jersey sales. It is the NFL’s second
most lucrative source of income, with $2.1 billion of revenue coming in 2010. Merchandising
has an advantage over ticket sales and venue revenue because it goes outside of the United States
and has global reach. “While neither the NFL nor Nike can comment upon the number of jerseys
that have been sold nor the revenue produced by jersey sales since April 2012, Shaw notes, “it
was one of the many contributing factors to our North America geography growing 13% to $2.4
billion in total revenue for our fiscal year 2012 fourth quarter.” (Jessop, 2012)
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