3 Pros and Cons of NFL Games in Europe

The National Football League has just completed its annual pilgrimage to London with Sunday's blowout win by the New England Patriots over the St. Louis Rams, and as is seemingly the case every year, the London game has given birth to talk of placing at least one NFL team overseas permanently.

At least one NFL owner believes that the time has already come to do so. As Michael Middlehurst-Schwartz of USA Today recently reported, Patriots owner Bob Kraft told a crowd at the NFL FanFest rally prior to last week's game that London is ready for an NFL team all its own.

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"You're already hosting the premier league, and we believe we're the premier sport in the world," Kraft said. "I think London has shown, with the way they've handled the Olympics and every other major sporting event, that it's time for you to have your own NFL franchise, based in London."

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However, before Mr. Kraft, the league's other owners and commissioner Roger Goodell uproot a team and place them in the U.K., there are a few pros and cons to consider.

The biggest "pro," of course, is money, and it's the reason why an NFL team in London will all but certainly happen eventually. For all the billions that the NFL rakes in every year, the sport doesn't have the global appeal of soccer or even basketball, and the NFL sees the 80,000 fans that pack Wembley Stadium every year as indicative of the heaps and piles of money that are just sitting there for the taking.

It's really not that simple, though. Yes, the annual game in London has been a successful endeavor, and the popularity of the NFL in the U.K. has grown since they started the exercise six years ago.

The problem is that one game a season is an event; an annual novelty that attracts even casual fans looking to see something new. Sustaining a team over an entire season is going to require developing a fanbase for that team in the host city, and as sports business expert Simon Chadwick told Chris Murphy of CNN, that could be a hard sell.

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"The NFL is one of those sports that is deeply socio-culturally embedded—it is quintessentially American, which means it only has limited appeal outside its core markets, in much the same way as a sport like cricket," Chadwick said.

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That's far from the only hurdle to clear with placing an NFL franchise in a city like London. There's also the matter of traveling and scheduling, which would be a logistical nightmare.

London is over 3,400 miles away from New York City and nearly 4,800 miles away from Seattle, and the time difference between Seattle and London is seven hours during Daylight Savings time, which now encompasses half of the regular season.

Even if the NFL scheduled as many bye weeks as possible for teams making the trip to the U.K. the effect on those teams would still be significant (especially West Coast teams), and the competitive disadvantage for a London franchise making eight trips stateside every year would be enormous.

Then, there's the not so insignificant matter of the way that the U.K. taxes non-resident athletes, which is bound to be a huge sticking point with the NFLPA.

High-profile athletes have complained for years about the high tax rates that they have to pay when competing in events in the U.K., and while those tax codes were recently relaxed somewhat, the effect on NFL players playing in London more than once a year would still be significant, as Tony Nitti of Forbes recently pointed out.

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Example: Wide receiver Justin Blackmon earns $8 million of base salary in 2015 when the Jaguars are permanently based in London. $5 million of the income is sourced to the U.K. and is taxed at 50 percent*, resulting in a tax bill of $2.5 million.

On his U.S. Form 1040, assume Blackmon pays tax at 30 percent on the full $8 million of income, resulting in a tax bill of $2.4 million. Even though Blackmon has paid $2.5 million of tax to the U.K., his foreign tax credit is limited to the $5 million of U.K. income multiplied by his U.S. tax rate of 30 percent, or $1.5 million. As a result, Blackmon pays tax of $900,000 to the U.S. and $2.5 million to the U.K. on $8 million of income, an effective rate of approximately 42.5 percent.

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Oh yeah, the players will just love that.

Frankly, placing an NFL team on the European continent makes no sense, but it's going to happen. Goodell wants it, and at least some of the owners do as well. Remember, this is the same bunch who trumpeted player safety out of one side of their mouths, while scheduling 16 Thursday night games and trumpeting an 18-game regular season out of the other.

They aren't about to let little things like logic and common sense get in the way of a cash grab.

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