The NFL’s international tour has come to end for the 2022 season, but Commissioner Roger Goodell is seemingly just getting started. In an interview shared on NFL UK’s Twitter account, Goodell voiced aspirations of expanding the league into Europe:
“There is no question London could support, not just one franchise, [but] I think two franchises,” he said. “We’re trying to sort of see, could you have multiple locations in Europe where you could have an NFL franchise? Because it would be easier as a division.”[1]
The expansion into Europe could potentially include four European teams. And forming a European division would only require each new team to fly overseas for fix to six games a year instead of eight or nine.[2]
The NFL hasn’t added a franchise since 2002. Mathematically speaking, adding a single expansion franchise is unlikely with the current number of teams sitting at 32. If European expansion is the new name of the game, it will likely be years before the league decides to weather the storm a project of this magnitude would undoubtedly generate.
Going, going, gone…Global
When the Minnesota Vikings and the New Orleans Saints kicked off at London’s Tottenham Spur Stadium this year, it marked the 100th international game played in the NFL.[3]
Now just how long has the NFL been working to make American football a global game? The history of the NFL playing in other countries dates back almost a century. The first professional football game to be played on non-American soil was when the AFL’s New York Yankees beat the Los Angeles Wildcats in 1926 at Toronto’s Maple Leaf Stadium.[4] We have certainly come a long, and far, way since then, but it took another 80 years for the NFL to play a regular season international game. It wasn’t until 2005, when the Cardinals and 49ers faced off in Mexico City, that the NFL got any international action.[5]
Two years later, the League kicked off its International Series, which commenced in 2007 by sending the New York Giants and the Miami Dolphins to Wembley Stadium in London.[6] The series has since hosted 33 games and counting. Along with the International series, the Buffalo Bills played one regular season game per season up in Toronto from 2008-2013.
The NFL scheduled five matchups for the 2022 season in London (Tottenham Hotspur Stadium and Wembley Stadium), Mexico City (Estadio Azteca), and for the first time ever, in Munich (Allianz Arena). It wouldn’t be surprising if that number goes up over the next couple of years.
Not to mention, the NFL’s inaugural game in Germany, headlining 7-time Super bowl Champion Tom Brady, was a raging success. The online ticket queue hit 770,000 users when ticket sales went live in July. While we don’t know if those were all human beings or bots (likely was a mixture of both), the demand was more than double that of both London games. The Bucs and the Seahawks ultimately played in front of a sold-out crowd with 69,811 fans in attendance.[7] DAZN Germany confirmed the game was the most viewed single NFL broadcast after the Super Bowl. Game day merchandise sales at Allianz Arena were also the highest ever recorded for an international NFL game.[8]
Broadly speaking, Germany has now officially surpassed Britain as the largest market in Europe.[9] According to Brett Gosper, NFL Head of U.K. and Europe, while TV rights are comparative, Germany has more Game Pass subscribers, they sell more consumer products, the Madden video game sells more, and Germany has slightly more “casual fans,” clocking in around 3.3 million. Gosper told a sports marketing conference that while London has been hosting games since 2007, Germany has edged past Britain in the past 12 months. Much of this recent data accounts for Goodell’s optimism centered around a multi-team, divisional expansion overseas.
The Bucs were just one of four teams that have international marketing rights in Germany: the others are the Carolina Panthers, the Kansas City Chiefs and the New England Patriots.[10] While the Bucs technically hosted the game, the other three franchises held events that weekend to scoop up undecided fans.
But after finally letting another country host a team and its immense success, the NFL is now considering the possibility of two more European countries hosting future games. Gosper told AP News that the League is eyeing Spain and France as potential landing spots.[11] In 2021, the League handed both the Dolphins and the Bears the international marketing rights to Spain, which makes either one an attractive choice if it ever came time to hold a game there. However, no team was given France.
Gosper made sure to clarify the consideration that goes into selecting potential markets. “We need to do our homework to make sure that there is the possibility of a place to land any games in those markets, gauge interest of the host stadia, gauge interest of the host city, even the government, as to their enthusiasm to help us bring a game,” Gosper said.
Key Questions and Legal Ramifications Shaping the Future of the NFL Overseas
The venture has been thrilling and successful, and this year marks the League’s most ambitious season yet. But after talking to one of the NFL’s General Counsels, the word “nightmare” is frequently used to describe what an expansion would look like logistically and legally. Aside from procuring passports, shoddy field quality, inadequate training facilities, travel and equipment transfer, adjusting sleep schedules, and a lack of gestational creature comforts, there are real legal concerns creating a dark crowd over Goodell’s lofty aspirations.
Tax Laws
As the laws in the U.S. and U.K. currently stand, NFL athletes playing for a London, or even European franchise, would face more income taxes than their American counterparts.[12] NFL athletes who participate in the international series have their game checks subject to that country’s rate of taxation. Salary, appearance fees and prize money earned while competing in the U.K. are taxed at rate of up to 45%. As of 2022, income tax rates and brackets, the highest earning players are taxed at a rate of up to 37%, while the state tax varies depending upon where that specific game check was earned. U.S. tax law also only allows a foreign tax credit at the U.S. tax rate, meaning a player would not be able to get credit for the difference between the two rates. Players who earn global endorsement income would find themselves in the same predicament: that athlete might not be able to take a U.S. tax credit for the full amount due to the difference in tax rates.
For teams selected to play in the international Series, their game checks and global endorsement income is only subject to U.K. taxation rates for that single week. But players signed to a London franchise would be far more heavily burdened by the tax rate disparity. Consider preseason games and potentially eight regular season games in the Britain…This (roughly) 50% tax rate is undoubtedly substantial enough to sway free agents from signing for an international franchise, should one ever exist.
Tax exemptions have been granted in the past (e.g., London Olympics and the 2011 and 2013 Champions League Finals at Wembley), but they have also rejected an exemption for players who competed in the ATP World Tour Finals.[13] Unless British Parliament passed legislation allowing for fast-track exemptions, which is something it has seriously considered to induce growth of sport in their country, it would be up to the U.K. to determine how to proceed.
Sporting Visas
Another obvious issue the league would face would be the need for Tier 2 Working Visas for those on the London team.[14] Typically, if a player has a valid passport, international athletes coming to play in the U.K. are admitted under a temporary working visa for “sporting visitors.” The maximum stay permitted under a temporary visa is 26 weeks. Athletes on the away team would still qualify for this classification. But for those on the home team in London, this poses a serious problem. They would instead require a full Tier 2 (sportsperson) visa because of the significant amount of time they would spend in the country.
For a Tier 2 visa to be granted, each player’s application must be endorsed by its UK governing body. The NFL does not currently have a UK governing body. And while certain partnerships would expedite the process in gaining recognition (e.g., teaming up with the British American Football Association), it is doubtful the Home Office would permit a governing body to be set up without meaningful assurances that a London franchise benefits the U.K. as a whole.[15] Players would no longer be automatically enlisted from the US. Players already settled in the U.K. will become a viable option to the London franchise as well. There is a long-standing practice of requiring European football teams to show a non-European player brings something “special and different to the U.K.”[16] Having a minimum number of British players is also not inconceivable. This would require the NFL to work with the broader U.K. sports infrastructure to promote American football at all levels and create its place within the existing U.K. sporting landscape.
Players With Criminal Convictions
After the NFL goes through the trouble of establishing itself as a governing body in the U.K. political landscape, players still may be denied their visa applications. Players who have criminal convictions would quickly find they are disqualified from obtaining the required visa to play for a London franchise.
A player who received a sentence of more than four years could indefinitely be refused a visa;[17] a player who received a sentence between one year and four years of imprisonment would be denied a visa to the U.K. until ten years after finishing his sentence; and even a player who was convicted of an offense and sentenced to less than 12 months’ imprisonment would still be subjected to mandatory refusal to enter the U.K. until five years have elapsed from the end of the sentence.
Labor Laws
There are two areas of great concern when it comes to the reality of expanding into Europe: competition and free movement laws. Much of the competition laws overseas cover the same matters dealt with in the U.S. under antitrust law. But free movement laws are relatively unique to the EU. (Please note: as of January 31, 2020, the United Kingdom withdrew from the European Union).
Notably, there is no draft involving European soccer teams. On its face, the NFL draft would violate EU free movement laws.[18] The rationale for this is the draft curtails the player’s right to choose where he wants to play. He either accepts the team that chooses him or withdraws from the draft and waits until the following year; this is, of course, largely unheard of.
According to London-based attorney Andrew Nixon of Sheridans, the NFL draft would probably be permissible under competition laws because it is collectively bargained between the owners and the players.[19] The stickier issue would be how the draft system restricts EU citizens’ right to move freely and the EU distinguishes between competition laws and free movement laws.
When the EU was formed, a certain section of that treaty makes the free movement of workers a fundamental principle, allowing EU citizens to move between other EU countries for work without needing a work permit or having to live there for that purpose.[20] Since the International Player Pathway was established by the NFL in 2017, there have been 26 international players allocated to NFL rosters.[21] Currently, there are 16 IPP players on teams across the League, three of which are on their team’s active roster. If a substantial number, or any number really, of players are EU citizens, is that enough to apply EU laws to the NFL?
Conclusion
All of this begs the question: Where does the NFL see its future in Europe? Beyond potentially increasing the number of games played overseas, having the bandwidth to form a division or even a singular European expansion would come with serious complications that could seem excessive. In the meantime, we will just have to wait and see what the future holds.
[1] https://twitter.com/NFLUK/status/1578763506819670016?ref_src=twsrc%5Etfw%7Ctwcamp%5Etweetembed%7Ctwterm%5E1578763506819670016%7Ctwgr%5E89161db866052c8e5c5014c304fe126cf0628c46%7Ctwcon%5Es1_&ref_url=https%3A%2F%2Fwww.si.com%2Fnfl%2F2022%2F10%2F08%2Froger-goodell-shares-hopes-four-team-european-nfl-division-expansion
[2] https://www.si.com/nfl/2022/10/08/roger-goodell-shares-hopes-four-team-european-nfl-division-expansion
[3] https://www.cnn.com/2022/10/02/sport/minnesota-vikings-new-orleans-saints-nfl-london-spt-intl/index.html
[4] https://www.nbcsports.com/philadelphia/eagles/nfl-international-series-history-games-outside-america
[5] Id.
[6] Id.
[7] https://www.outkick.com/nfls-big-success-in-germany-game-another-step-toward-possible-europe-division/
[8] Id.
[9] https://apnews.com/article/carolina-panthers-seattle-seahawks-tampa-bay-buccaneers-kansas-city-chiefs-nfl-0bea6a57c5a927f0cf57d1d4cc6b1be1
[10] Id.
[11] https://apnews.com/article/seattle-seahawks-tampa-bay-buccaneers-chicago-bears-nfl-soccer-d7e4d867e71c01de8377e1e9e2354a16
[12] Brett Smith, An American Football Team in London: How Tax Consequences for International Athletes Could Affect the Success of a Potential NFL Franchise in London, 1 Bus. Entrepreneurship & Tax L. Rev. 157 (2017).
Available at: https://scholarship.law.missouri.edu/betr/vol1/iss1/7
[13] https://www.espn.com/nfl/story/_/id/9716479/nfl-team-london-raises-legal-issues
[14] https://www.lawinsport.com/topics/item/what-are-the-key-legal-issues-facing-an-nfl-london-franchise-part-2-sporting-visas-criminal-convictions-and-eu-law
[15] Id.
[16] Id.
[17] https://www.gov.uk/government/collections/general-grounds-for-refusal-modernised-guidance
[18] https://www.lawinsport.com/topics/item/what-are-the-key-legal-issues-facing-an-nfl-london-franchise-part-2-sporting-visas-criminal-convictions-and-eu-law
[19] https://www.espn.com/nfl/story/_/id/9716479/nfl-team-london-raises-legal-issues
[20] Id.
[21] https://operations.nfl.com/updates/football-ops/nfl-announces-athletes-selected-for-2023-international-player-pathway-program/
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