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NFL London series returns, but are teams thrown for a loss?

Thomas Barrabi

As the NFL prepares to kick off the latest edition of its International Series in London on Sunday, league executives are likely looking for more than just another round of sellout crowds to justify their overseas investment.

The NFL will play four games in the United Kingdom this fall -- two at Wembley Stadium and two at the brand-new Tottenham Hotspur Stadium, which has facilities designed with American football in mind. A fifth international game will be played in Mexico City. League executives have long touted the possibility of a permanent international franchise, potentially based in London, as part of their bid to boost revenue by building a global fan base.

While the NFL sold out all three of its London games last season, revenue from local ticket and sponsorship sales won’t mark a major uptick for a league that is set to earn $16 billion in revenue this year – especially after the cost of travel and other logistical considerations.

Consider what the Chicago Bears have had to spend in advance of this Sunday's game. In July, the Bears sent 15 pallets of goods by cargo ship, from water to Gatorade to ice buckets, the Chicago Tribune reported. Two more shipments via air cargo were slated to leave the Second City on Thursday, the first with uniforms, helmets and assorted game gear and the second shipment with practice gear.

Despite these extra costs, the good news for the NFL is that its current United Kingdom broadcast rights deal with Sky Sports is set to expire after the 2019 season. Another successful slate of international games could lead to a new lucrative partnership.

“The NFL doesn’t make all of its money by putting butts in the seats in stadiums. It’s not that they turn that money down, but of course, the real money in any major league sport at this point, whether it’s the NFL or whether it’s the English Premier League, is how much you make on TV,” said Victor Matheson, a sports economist and professor at the College of the Holy Cross in Massachusetts. “It’s hard to make a real go at things if you’re just counting on ticket sales. It has to turn into some media rights at some point or basically you’re only breaking even.”

The NFL declined to comment on whether its London series is profitable, but league officials have pointed to other metrics as evidence that the sport’s popularity is on the rise in the United Kingdom. Weekly ratings on Sky Sports have doubled over the last decade, according to league statistics.

The NFL says its research shows more than 15 million NFL fans in the U.K., four million of which are considered “avid fans.”

While the NFL’s gate revenue from ticket buyers at London’s Wembley Stadium has regularly exceeded $30 million in recent years, the series’ financials are unclear. A league-commissioned study found the NFL’s game in Mexico City in 2016 had a $45 million economic impact on the city, but economists are generally skeptical of the accuracy of impact studies.

Major U.S. sports leagues have sought to expand their international fan bases in recent years as a means of generating new revenue streams. The NBA puts on several events outside North America each year, including trips to China and Africa. The MLB has regularly played games in Japan.

While those international games went off to massive local fanfare, the NFL is at a disadvantage compared to other leagues, according to Matheson. Unlike the NBA and MLB, which each have dozens of players from outside the United States, the NFL has yet to develop a deep pool of talented foreign-born players.

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“There are large numbers of star NBA players from all over the world, so it’s a whole lot easier to get people to tune into regular-season games in the NBA if you’re living in Beijing and you can watch Yao Ming or you’re living in Berlin and you can watch Dirk Nowitski. … There is not that same sort of huge pool of foreign players going into the NFL,” Matheson said.

The NFL’s former top international executive, Mark Waller, told FOX Business in 2017 that the league’s long-term goal was to play a full slate of eight annual games in London, or the equivalent of a full home schedule. Jacksonville Jaguars owner Shahid Khan, whose team has played more games in London than any other NFL franchise, made an abortive bid to buy Wembley Stadium in 2018.

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