Tuesday, November 29, 2011

International Sports: The Economic Benefits of NFL London


Last month, the National Football League (NFL) started looking into development of an expanded football team in London.  Reported by BBC UK, the plan is a long term goal reasoned from increased involvement at university level and attendance of NFL games held in London over the past five years.  American football participation within the university level has increased over 50% in the last five years with an annual growth of 10%.  Numerous members from both the British American Football Association (BAFA) and the NFL believe this growth could be positive.  The NFL would gain permanent and consistent exposure over the course of entire NFL seasons.

Currently, the NFL has held a game in London for 5 consecutive years.  Each of these games has seen near sell-outs, giving NFL team owner John York optimism for the future, which starts with increasing London based games to 2 in upcoming years.  As stated above, the long term goal is to increase the interest in the NFL, which many believe to be an untapped market overseas.   

What This Means
Expansion of an NFL team takes strategic planning and development to integrate the team into the league.  The concept of an international based NFL team seems extremely far-fetched. 

On paper, the numbers seem to show that American football interest and involvement is higher than ever in the UK.  But there are both the supply and demand factors that need to be accounted for explaining why this could work.

The Demand for American Football
The article describes the American football growth in the UK.  With university American football developing, youth are further exposed to the sport.  Exposure to a sport is one of the necessary steps to gaining both fan following and participation. 

What the NFL is looking into is breaking through the cultural sport barrier, which can be similarly compared to what soccer has attempted to accomplish in the United States.  As seen in the US, the exposure to soccer has affected the growth of fan interest in the American soccer league, Major League Soccer, and the English Premier League (EPL).  The key difference is that American football to the UK has a greatly different standing than soccer has on the US.  Soccer is a sport that has been well established through participation, and while the US had not accomplished a successful professional league, the fan interest existed among the youth.  The NFL must figure out a way to push past the participation barrier and find a way to bring American football culture to the UK.

Lastly, the matter that the NFL has only partaken in a five year, annual football game in London is concerning.  While the games have essentially sold out, building consistency every week is a concern.  The future expansion of 2 games per year in London would further engage UK fan interest.

The Supply for American Football
Here is the biggest problem that the article doesn’t address.  What are the costs behind expanding an NFL team internationally?  The international market can be a great location to grow, but the costs to establish a team across the Atlantic Ocean will be time and cost heavy. 

The London NFL team will need to travel extensively to the United States to play other teams.  Costs would skyrocket with not only London’s travels, but the away teams who will have to travel to Wembley Stadium for the eight home games held in London.  The travel costs seem ridiculous, on top of the time constraints that are put on teams who must prepare for both the game that week and the recovery for the following week.

There is a reason EPL and MLS do not compete within the same league.  The costs don’t outweigh the benefits.  Airline travel isn’t getting cheaper, and no matter how successful financially the NFL may become in the US, convincing players, coaches, and media to the burdens of an international team in the same league is troublesome. 

Final Statement
The UK may enjoy some additional revenue by the team, but the costs to provide a team in London is a huge weight on the entire NFL.  Currently, there isn’t enough evidence that the team would be sustainable.  As a whole, the further investment in the BAFA would seem more logical and allow a better connection from fans to players across the league.


Do you believe a NFL team could be located in London? What economic effects does this have on the NFL as a business? What would the effect be on London and the UK?




Post by Evan Amano

Monday, November 7, 2011

About 6,000 troops to guard 2012 London Olympics

The budget for the 2012 London Olympics continue to rise as additional security continues to be added.  Reuters UK reports that about 6,000 troops have been recruited to add to security for the Summer Olympics.  The troops are being considered to work the games because of the already added private firm G4S’s 10,000 (and likely increasing to 22,000) civilian guards for the two week long event.  

The London Organising Committee (LOCOG) is responsible for hiring G4S, as well as working with the government to create a safe and secure Olympics.  The LOCOG budget went from initially 29 million pounds to 432 million pounds.  The government security budget is also listed at 475 million pounds.

What This Means
The costs of hosting the Olympics is extremely expensive.  In recent years, the Summer Olympics typically spend around 5 to 8 billion dollars in order to build the proper facilities, methods of transportation, and other accommodations for Olympians and spectators alike.  

For 2012, the security is extremely necessary.  These reports come only months after the country experienced riots, which were fairly prominent in Greater London.  For precautionary reasons, this seems logical to have as many security on reserve as possible.  The Olympic games are meant to be a glorious event that brings together countries, but as history has shown, these events have not gone without danger. 

For the economics viewpoint, having security at its maximum may seem to be wasted budget, but the costs that may occur by having too few of security would be a much greater harm to the United Kingdom.  Perceived image of the country by spectators viewing around the world is extremely important; if people see that London is in great condition, many may consider traveling to the United Kingdom, improving tourism for the country.  This is crucial for countries that are always competing for additional revenue to bring into their economy.
Reuters U

Post by Evan Amano



Thursday, November 3, 2011

"Cuba Passes Law Allowing Private Home Sales"

Cuba has passed a law that now allows for private home sales, as reported by BBC.  This law has been placed by President Raul Castro, who has started to open up the Cuban market since taken over for his brother, Fidel.  BBC states that this is the first time that private homes have been able to be sold since 1959.

What This Means
Allowing private houses to be sold will not only allow for a more open market within Cuba, but the overall morale of citizens should rise with it.  The social consequences over the past 5 decades are astronomical.  Generations of families have been forced to live in a single house due to housing shortages and the lack of ability to purchase homes.

By offering an open market, there can be speculation that the growth of housing may increase.  However, I believe that due to the socialist status of the government, economic growth will lack what could be a huge boom in the Cuban economy.  This change is one of many movements President Raul Castro is initiating to make Cuba a better place to live.

BBC News UK

Post by Evan Amano