NFL in Mexico

Posted by on Friday, November 17, 2017 in National Football League.

Interview with NY Times.

  1. what makes mexico tempting and worthy of at least trying games there (after a gap of several years since 2005). I understand the NFL wants to grow but what factors in Mexico make that worthy of testing and what financial dividends might there be?

There are already more NFL fans in Mexico than any place outside of the US. Recent studies estimate 28 million NFL fans throughout Mexico with about 10 million self-designated hard-core fans. Mexico City has 1.5 million NFL fans alone, which would rank in the top quartile of current NFL markets.

 Estadio Azteca has been recently renovated to fit the NFL prototypical economic architecture of a downsized luxury venue that charges half as many fans more than twice as much.

 Logistically, Mexico City is in the Central Time Zone within four hours of at least half of the NFL home markets.

 The key unanswered question for the profit-maximizing NFL monopoly cartel is whether this pre-existing, wide-spread fan base in Mexico City has the economic depth and hard-core demand to become a 10-game season-ticket base sufficient to carry a NFL franchise.

  1. What is your educated guess/analysis on whether these games are a money maker and if not what value do they hold for the NFL?

In spite of all the hype, the NFL international series games are probably a losing proposition in the short-term for the League and most of the higher revenue clubs. The international games are part of an overall long-term investment strategy to expand the NFL brand, while exploring the long-term profitability of international expansion and/or franchise relocation. At the very least the underlying long-run effect of the NFL’s traveling expansion-relocation gambit is ultimately to widen the League’s world-wide media footprint.

 The average local revenue (home-team gate share + unshared venue revenue) for an NFL team is usually about $10 million per game. The home team’s local revenue from one of the London games has also been about $10 million, but the team travel cost squeeze on the bottom line is definitely higher for the international package for both clubs.

 Jacksonville reportedly generates more local revenue in London than when they are actually the home team in Jacksonville. The same will probably be true in Mexico City for the Oakland/Las Vegas Raiders who generate only $8 million per home game in Oakland.

 In marked contrast, if the NFL Champion Patriots were the “home team” in Estadio Azteca they would generate about $30 million less local revenue than they average per game at home in Gillette Stadium.

  1. Is putting a team there crazy talk or London more apt?

After the League virtually abandoned the Mexico City expansion-relocation show in 2005, League membership became infatuated with the NFL in London, partially because of the growing cross-ownership of English Premier League teams: Tampa Buccaneers/Man United, Jacksonville Jaguars/Fulham, and LA Rams/Arsenal.

 London continues to be the clear and present front-runner for NFL expansion/relocation, in spite of a myriad of logistical problems from one team playing its home games a continent away in the midst of long-standing sports culture driven by what the English call the beautiful game (soccer). The NFL ready luxury stadium(s) are already in place in Wembley and Tottenham, and the expansion or relocation from Jacksonville or Tampa could be a matter of fact by the start of the next media rights deal in 2023.

 For internal profit max reasons, the NFL monopoly cartel usually prefers franchise relocation to expansion, but league expansion usually occurs in pairs. Mexico City could be next before 2025, if okayed by de facto commissioner and Dallas Cowboys owner Jerry Jones. (Los Vaqueros are the still most popular NFL team in Mexico followed by the Steelers and Patriots).


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