Crossing the pond: how the NFL is making a splash in Europe
As the US sports betting ecosystem continues to blossom, the NFL has tapped into its European fanbase with betting partnerships in the UK, Ireland and Germany. But what does this mean for the league, operators and future revenue growth?
The National Football League (NFL) has developed into one of the largest financial behemoths in the sports industry. Yearly revenue of $16bn could be topped up by an additional $2.3bn from legalised sports betting in the US alone, according to the American Gaming Association (AGA) in 2018.
With these mouth-watering sums, and after seeing its franchises seal domestic sports betting sponsorships in recent months, the league itself is looking outwards to Europe in search of sponsorship opportunities to boost its coffers.
Two agreements have been sealed, with 888sport in the UK and Ireland, and Sky Bet in Germany, with a concerted emphasis on player engagement, said NFL EVP Chris Halpin. “This [Sky Bet] partnership is a large step forward in the NFL’s sports betting strategy and will further engage our passionate German fanbase,” Haplin stated in the press releases. “[888sport] is a brand that will help us deepen fans’ engagement with our sport,” he continued.
A pre-PASPA world
The NFL’s buccaneering approach to sports betting hasn’t always been the case. In 2012, an NFL executive denounced sports betting in all forms during a deposition in a court case against the state of New Jersey.
The executive said: “The NFL is a revenue-generating business. If the NFL believed that sports gambling would allow it to increase its revenue, the NFL would engage in that activity. Based upon our studies, we know that that will negatively impact our long-term relationship with our fans, negatively impact our bottom line and revenue, and negatively impact the perception of our sport across the country,” they concluded.
Jump eight years and that is no longer the case. Long gone are the days of moral high ground, with the floodgates blasted open by the battering ram that was the repeal of PASPA.
For Ryan Rodenberg, an associate professor at Florida State University, the transition from absolutists to advocates is no surprise. “As an NFL executive confirmed in 2012, the NFL has long been motivated to pursue revenue-generating activities such as sports betting. As such, it is unsurprising to see the NFL looking for sports betting sponsorships worldwide,” mused Rodenberg.
The opportunity to line one’s pockets is usually hard to turn down, even if less than a decade ago one found said opportunity to be repugnant. The snowball effect, as more and more franchises onboard sports betting partners with dedicated lounges and swathes of fanfare, has culminated in the European expansion, and the NFL, aware of the major fanbase it holds there, is wasting no time in tucking into the bounty.
Marc Thomas, partner at Propus Partners, tells EGR that five years ago the NFL, “getting into bed with UK and European betting operators was probably not the best route for them”.
“Now, because of the changing perception and legality of US sports betting they are probably allowed to do it,” he adds. And it is that permission that allows the NFL to tap into what fellow Propus Partners partner Mark Israney describes as a “huge market”.
“This has been a huge market since the 1980s when it was on Channel Four [in the UK]. You go to any game at Wembley and you see the number of fans that turn out with British accents. That fanbase is there and has always been there,” he says. “This is the NFL now tapping into a market that they previously weren’t able to. And, of course, they’re going to make money by doing that.”
Ahead of the rest
The money-making drive from sports betting has been adopted across all major US sports leagues, with agreements in place across the NBA, NHL, and MLB, but for Israney the NFL has the ability to venture into the European market with far more gusto than its American cousins.
Israney says: “The NFL has the ability to clearly do it because it’s such an important product to so many people within Europe, whereas [with] the other three professional sports it’s a much, much lower following.”
Taking something arbitrary, such as the four leagues’ Twitter followings on Europe-facing accounts, shows the NFL streaks ahead, with 209,000 followers. The NBA (92,200) and MLB (18,300) scrape podium places by default, with the NHL not running a relevant account.
A “standing start” is how Thomas describes the European popularity of the NFL compared to its rivals in the race for sponsorship dollars, but he expects they will follow in the league’s formative footsteps.
“The benefit is that the major leagues have deals with major data providers, all of whom have a clear line into UK bookmakers. So, there isn’t the barrier to entry. Either from a federation point of view, or even from a team-by-team point of view, why wouldn’t NBA clubs have a UK-based betting partner? There’s no reason not to,” he adds.
It is a possibility that Rodenberg agrees with, saying in the US “the NFL is middle-of-the-road in terms of its engagement with sports betting to date. The NFL is more aggressive than the NCAA but trails the gambling-related ventures of the NBA.”
Dipping a toe
There is a sense of trepidation in the US sports betting sphere that it is a mess waiting to happen. The flurry of cash being thrown at the industry led to independent sponsor Jason Ader telling EGR Intel that it could be like the 1929 Wall Street Crash.
The NFL’s gung-ho attitude with its European expansion may look erratic on the surface, but for Thomas it is a case of a measured approach with minimal risk. “I would suggest that the NFL are going to be quite careful about who they partner with. If there was a scandal, I think this could really set back the marketplace in the US for betting partnerships.
“If there were any issues, the NFL would probably say let’s not get involved in this going forward and let’s cancel the deal. This isn’t a minority sport taking money from betting operators, it is a huge sport that’s probably trying to increase their revenue by 10%,” he adds.
As the NFL has a maximum-reward, minimum-loss dichotomy on its hands, there is the question of what European bookmakers get out of the deal.
Israney says: “What I’m not sure about is what the operator really gets from it other than just a bit of association with the NFL brand. I really can’t imagine many punters not knowing that you could go to any bookmaker and bet on an NFL game.”
Thomas offers an alternative view, suggesting that this could be a long-term strategic opportunity for European operators looking to penetrate the US. “I think the people that are going to be most interested in this are those already trying to grow their brand in the US. If you’re a bookmaker, then having an association with the NFL outside of the US may help with raising your brand within the US. Having a reputable brand connected with the NFL, albeit overseas, is obviously a good message in the US market where trust is a huge driver,” he concludes.
The ‘scratch my back and I’ll scratch yours’ dynamic is one as old as time. For the NFL to continue its hyper-expansion, sucking up revenue dollars under the guise of fan engagement, from each corner of the globe, is par for the course. The case remains to be seen if the concept of trust, formed more than 3,000 miles away, will benefit European operators in the US gold rush.