The NFL Is Expanding In Mexico

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(The NFL has played four games in Mexico City since 2016)

Hey Friends,

The National Football League (NFL) is the world’s most profitable sports league. The average franchise is now worth $4.14 billion (+18% YoY). They averaged more than 17 million viewers per game last season and are quickly approaching commissioner Roger Goodell’s previously stated goal of $25 billion in annual revenue.

But they are already (by far) the most popular sports league in the United States, regardless of what metric you want to use, so how do they get even bigger?

That’s a nuanced question that typically requires a complicated answer. But I think, in the end, most of it boils down to one big thing: International expansion.

Take Formula 1 and the Premier League, for example. Both entities are massive on a global scale—we are talking about billions of fans collectively—but the NFL still turns a larger profit year-in-and-year-out because they dominate the US market — the largest economy in the world (aka the average fan spends more).

So those two organizations (F1 & the Premier League) have spent the last several years attempting to crack the US market. They have succeeded to a large degree—F1 US viewership is up ~3x since 2018 and the Premier League just signed a $2.7 billion TV deal with NBC—but the NFL is essentially trying to do the opposite.

Franchise valuations have grown. Total league revenue is up big. But still, if they want to reach $25 billion or maybe even $50 billion in annual revenue someday, it’s become apparent that international expansion is the key.

This requires introducing the game to outsiders, or people who might not even know the rules. So the NFL is working on getting flag football approved as an Olympic sport. They have hosted games in London for over a decade. They have played in Mexico since 2016 and are even sending the Seattle Seahawks and the Tampa Bay Buccaneers to Germany this year for the first time in history.

But those all feel like long-term plays, and outside of some TV money or in-person monetization, they probably won’t move the needle all that much.

Instead, the NFL has quietly made a change that *actually* produces international revenue for teams by awarding them with international marketing rights to select countries. And, of course, the Dallas Cowboys were the first to take advantage.

The Dallas Cowboys recently signed a 3-year commercial and media deal with Spanish-language media behemoth TelevisaUnivision. The Mexico-based media provider will act as the Cowboys’ strategy partner in Mexico with the goal of building the team’s brand among Mexican fans and increasing commercial sales in the country. 

The deal includes:

• Exclusive broadcast rights in Mexico for all Dallas Cowboys preseason games 

• Weekly content during the season and offseason 

• Complementary in-season game coverage* 

  • TelevisaUnivision already has the NFL’s Mexican broadcast rights

• Content will include training camp coverage, interviews, analysis, and behind-the-scenes programming  

The financial details aren’t known, but this is significant because the Cowboys are the first of nine teams awarded Mexican marketing rights ( Arizona Cardinals, Denver Broncos, Houston Texans, Kansas City Chiefs, Las Vegas Raiders, Los Angeles Rams, Pittsburgh Steelers, and San Francisco 49ers) to sign a deal with TelevisaUnivision.

Why? Because TelevisaUnivision was waiting on the Cowboys specifically.

"We’re focusing 100% on the Cowboys. We haven’t approached any other club, and no other club approached us. So we decided for the foreseeable future, for the scope of this partnership, we will only work with the Cowboys, and likewise, the Cowboys will not work with anyone else in the territory, ” says TelevisaUnivision Senior Vice President Marco Liceaga. “With 55 years of tradition in the country, the Dallas Cowboys are more than just an NFL team, they are Mexico's NFL team."

And here’s a look at where the other 31 NFL teams were awarded international marketing rights:

In the end, this deal makes a lot of sense for the Dallas Cowboys and TelevisaUnivision. Mexico is the NFL’s second-most-popular market, and Jerry Jones claims that 54% of Mexican NFL fans pick the Dallas Cowboys as their favorite team.

He has even mentioned possibly giving up a home game to play in Mexico:

“To do a home game, you give up one of your games at your stadium,” Jones said. “So the Cowboys want to always be positioning for the visiting team slot so you can always play your full complement of games in your stadium. But even if it meant in the future moving a game from the stadium to Mexico, I would do that to make sure Mexico and our Mexican fans everywhere understand what our Mexican fans mean to us.”

That tells me that Jerry Jones and the Dallas Cowboys, the masterminds behind the largest local revenue pot in the NFL, clearly see expansion throughout Mexico as a priority. Why? Because giving up a home game would mean sacrificing tens of millions of dollars, and they aren’t going to do that without long-term financial gain.

I hope everyone has a great day. We’ll talk tomorrow.

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