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NFL to Grant Teams Exclusive Access to International Markets

The National Football League is planning to divide up international markets among its 32 franchises, giving teams specific cities or regions in which they’ll have some commercial exclusivity, according a presentation made to clubs earlier this year.

The process, known inside the league as the International Home Marketing Area (HMA) Initiative, has been in the works for a few years, according to people familiar with the plans. It is designed to expand the global footprint of the world’s richest league by utilizing the expertise and manpower of its individual teams.

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All 32 NFL franchises have been invited to submit commercial plans for overseas markets, such as Canada, Mexico or China. Due on Sept. 30, the proposals are a detailed five-year marketing plan of how much the team would spend in the area, what it would do on the ground, who it might partner with, and any franchise ties to the region. Market assignments are expected to be distributed in early 2022, according to the presentation deck, which was viewed by Sportico.

The Dallas Cowboys, for example, are eying nearby markets in Mexico, according to Cowboys COO Stephen Jones. The team is planning to invest in the region in a manner similar to its developments in Dallas and Frisco, unlocking opportunities for existing sponsors and ideally adding more partners in Mexico.

“That’s one of the big things the NFL is looking for, is they want to see that teams are going to invest in these markets,” Jones said in a taped interview as part of Thursday’s SporticoLive NFL Valuations event. “We think it’s a great idea for the NFL in terms of getting all 32 involved internationally. Everybody has markets that they’re interested in. You’d certainly imagine that the Bills would be interested in Canada, and the list goes on.”

Revenue generated in those markets would be shared across the league, but at a lower percentage than ticket revenue, which should motivate teams to spend more freely. Clubs will be asked to share 20% of gross revenue starting in year three of the program, the presentation says. Multiple teams could be awarded rights in a single market, and some teams will likely end up with multiple international zones, according to the people.

There is no expectation that the NFL would eventually play games, preseason or regular season, in any of these new markets. A representative for the NFL did not respond to a request for comment.

The most recent iteration of the International HMA plan was presented to NFL teams this spring. It details six main areas of focus: Canada, Mexico, Brazil, the U.K., Germany and China. Some of those regions will be broken up into more specific segments, such as Vancouver vs. Toronto, and teams are encouraged to submit proposals for areas outside of those six countries, the people said.

Teams awarded international markets will be able to treat them similarly to their designated market area (DMA), a 75-mile-radius around their stadium where they have business exclusivity. Teams will be allowed to host fan development events, open brick-and-mortar shops, ink sponsorship deals and sell limited media rights in those areas, according to the document. They’ll also be able to upsell existing partners on access to their new expanded territory.

“NFL teams have a lot to learn” internationally, San Francisco 49ers president Al Guido said during another segment of the SporticoLive event. “We’ve always thought about our DMA as the 75-mile radius in and around our stadium, and we have to get a wider lens and a wider perspective…. The 49ers will be aggressive in how we think about monetizing and widening our brand overseas.”

This is a unique international approach among the major U.S. sports leagues, all of which are looking overseas more intently for long-term revenue growth. The NBA is leading the pack so far—it has built a multibillion-dollar opportunity in China alone—but the NHL and MLB are also playing international games fairly regularly, primarily in regions where their sport is already popular.

In that regard, the NFL is at a rare disadvantage. American football isn’t widely played in other parts of the world, but the league is a commercial juggernaut, and it has demonstrated success overseas through more than two dozen games played in London. The Jacksonville Jaguars already have some special rights in the city, but this process could open it up for more teams.

Competition is expected to be especially fierce in a handful of markets. That includes Canadian cities, which are nearby, on similar time zones and will likely soon have more accessible legal sports betting. Germany and Mexico are expected to be hotly contested, as are Australia and Japan, two regions not mentioned directly in the presentation to teams.

Of the six regions listed in the presentation, Brazil has the most NFL fans at 63.7 million, according to numbers attributed to a 2020 fan survey. Mexico is next (48.5 million), followed by China (41.9 million) and Germany (19.2 million).

Teams will also likely apply for regions where there are cultural connections, or connections via owners. The Rooney family, which owns the Pittsburgh Steelers, is an Irish-American family with strong ties to the country. (Former team executive Dan Rooney was the U.S ambassador to Ireland from 2009 to 2012). Both the Steelers and New England Patriots play in an areas with a large Irish-American population.

With additional reporting from Kurt Badenhausen.