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Game-plan to beat recession

By John Ingoldsby
October 22, 2009
The Financial Times

At last week’s National Football League owners meeting in Boston, one of the regular gatherings of the high-powered executives who run the league and its 32 teams, the agenda included adding games to the schedule, whether to include sponsors’ logos on practice kit and plans for a new collective bargaining agreement with players.

But underlying all this, the mood was bullish. One of the biggest businesses in sport, announced Roger Goodell, league commissioner, was bucking the economic recession.

“We started the session this morning as we traditionally do with a report on the status of the season, and we had a very upbeat report, not only on the quality of the games but also with fan engagement,” he says.

Ratings for all four of the networks that televise NFL games – CBS, NBC, Fox and ESPN – have increased from last year, and the viewership records have been set in three of this season’s first five weeks, with the most watched Sunday night game ever on September 20 between the New York Giants and Dallas Cowboys on NBC.

The league has also in the past few months showed it is surviving a weak sponsorship market by signing a new deal with Proctor & Gamble, while renewing long-standing agreements with Visa and IBM.

But as the New England Patriots and Tampa Bay Buccaneers get set to play each other at London’s Wembley Stadium on Sunday, the third regular season game to be played there in as many years, Mr Goodell appears convinced that the health of the sport will benefit from global expansion.

“The progress we are making internationally, in particular our efforts in the UK, show that the fans have really responded,” he says. “The fans in the UK look like they could have a second game, and we are looking as early as next year. It could be Wembley, or it could also be some place else in the UK, and we have talked about other spots in Europe also.”

Steve Tisch, owner of the New York Giants, a team that played in the inaugural London game two years ago, is an enthusiastic supporter of the commissioner’s strategy. “The way Roger has set it up with the London games is a great start, and the experiences over there have been terrific.”

For a domestic league with revenues of $8bn (€5.3bn, £4.8bn) that culminates in the Super Bowl, one of the marketing world’s marquee events – in the midst of the global recession, 30-second ads for last February’s game cost an average of $3m, up from $2.7m the year before – it is perhaps a surprising strategy.

What is more, previous efforts to expand the sport abroad have been unsuccessful. NFL Europa, a Europe-based branch of the league which included teams in Germany and the Netherlands, closed in 2007, and the NFL turned instead to the current strategy of playing regular season games outside the US.

Still, Mr Goodell points to the more than 140m NFL fans outside the US and 120 broadcasters from 230 countries and territories that will carry NFL programming in 2009 as evidence of its continuing global appeal.

But he also recognises that “we are not played as broadly as some other sports, particularly soccer and basketball, but when people have the opportunity to see our game and be engaged, they love it and want more of it”.

In this respect, the National Basketball Association, another North American league that has pursued an international strategy in recent years, has been more successful. The sport is well established in Europe and, perhaps more significantly for the long term, in China. Last year, the league formed NBA China, an organisation designed to conduct all its operations there and it claims that NBA.com/china, its local website, is the single most popular sports website in the country.

For the time being, the NFL remains focused on expanding the business in Europe, but for the fans set to turn the home of English football into a home for its American version, the only numbers that count will be on the scoreboard.

Copyright The Financial Times Limited 2009. Print a single copy of this article for personal use. Contact us if you wish to print more to distribute to others.

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