Wednesday, June 5, 2013

Should the NFL Expand Into Europe

I recall back in the 90’s when I was growing up that baseball was such a popular sport.  It was more popular than all of the other major sports in the U.S.   It was referred to as America’s pastime.  As I grew older, I began to enjoy and appreciate football much more.  There was a transition over a decade or so, for many reasons, where football was gaining more attention whereas baseball was losing fans.  In the end, football had risen to the top of the list in terms of most popular sport in America.  The primary reason is due to management in the National Football League (NFL) and the strategic decisions that they’ve made.  They mastered the recipe for success.  So they just need to stand pat, right?  My theory falls in line with the old saying “if it ain’t broke don’t fix it.”  The NFL disagrees.  Instead of enjoying their time at the top making money, they’re pushing for global expansion in the European market.

                A few of the readings we had this week deal with global markets.  The article “What Happens Next?” talks about the global grid as one of the five crucibles of innovation stating that “the most innovative organizations will be those who harness the global grid.”  Also, the article “Going from Global Trends to Corporate Strategy” talks about two trends occurring in global business.  One is the growing number of customers.  The other is the shift of economic activity between regions.  

So how does this fit in with the NFL?  Well, it appears that they are trying to be innovative.  The commissioner, Roger Goodell, has a vision.  He wants the NFL to make 25 billion dollars by 2027.  Currently the NFL makes approximately 9 billion per year.  They already have a test base with playing games in other countries.  They’ve played exhibition games in London, Japan, Mexico and Canada with great success.  The potential of the growing number of customers is large if they can land a team in London.  They feel as though they have tapped out the U.S. market since 180 million (two thirds of all Americans) watching the Super Bowl last year.

The NFL’s management team has been great at taking this sport to the top in the U.S.  The strategic decisions that they have made have paid off big time, but sometimes greed can cloud even the brightest of minds.  There are so many reasons not to do it.  The cost of travel.  The inconvenience for the players to travel (especially the teams on the West Coast).  The NFL might have to expand to more than 32 teams, which would completely mess up the divisions and playoff structure as well as dilute the talent.   They’d have to compete with local soccer teams for fans.  There are just too many risks.  And if you consider some of the risks along the value chain that were discussed in the “Risk: Seeing Around the Corners” article, you don’t have to know football to understand that there are many.  They might be so focused on making as much money as possible that they overlook the fact that changing too many things may lead to disinterest amongst fans.  It happened in baseball and no one could’ve predicted that.  Hopefully they can see through their greed to determine if expanding to London will benefit the NFL in the long term and stay America’s pastime well into the future.

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