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Keeping Up With the Khans: A Story of the NFL’s Manifest Destiny

It’s that time of year again, the NFL just hit London for a three week stretch. So let’s ask the same annual questions.

Jacksonville Jaguars/ Fulham FC Owner Shad Khan and London Mayor Sadiq Khan (Photo Source @SadiqKhan)

How and when can we make the Around the NFL team UK citizens? Was Thomas Willoughby a Jane Austen character? And could an NFL team really relocate to London?

The first two have been covered to death, so let’s consider the franchise. (Let’s also take the opportunity for an outrageously pompous title.)

While you’re here check out Mr Willoughby’s piece on how plausible a Homelass Vegas Raiders stint in London could be.

So what’s new this year?

As you’re no doubt aware Shad Khan recently withdrew his Wembley stadium bid. The FA council, made up of regional county representatives, weren’t keen (though there was actually a slim majority in favour.) Thus the FA’s hugely convoluted decision making structure didn’t give Mr Khan the full vote of confidence he wanted for such a high profile move in the UK.

The statement of buying the 90,000 capacity national stadium (for approximately £600m) would have represented a huge step for a London franchise. Consider this a timeout though, on the basis of Mr Khan’s accompanying statement, “I cannot rule out revisiting the opportunity at another time.”  

In any case Alistair Kirkwood (Head of NFLUK) went on record again this year repeating that London is on course to have a team in 2022. Stating he was not involved in conversations on the attempted purchase, and so it seems any franchise plan isn’t contingent on a Wembley purchase.

It sure would make it easier though. At the risk of triggering Fulham fans, imagine for a moment the value Khan could extract from having NFL and Premier League teams based at 90,000 capacity Wembley. All for £600m less the substantial residential value of a Craven Cottage site in affluent Fulham.

Yes I know he denied that’s his intention, so did Stan Kroenke when he happened upon 60 acres of Los Angeles real estate. Part of business is not blabbing your plans, unless of course you can pass it off as “fake news.”

Irate Fulham ultras (Photo Source: EMPICS Sport/PA Photos)

 

 An Inconvenient Truth

First, the elephant in the room – would the NFL need to change name to the International Football League? …No, they don’t care about factual accuracy in that way (World Champions anyone?)

Could the newly minted 4th all-time NFL rusher (congrats btw Frank) see a London team during his lengthy playing career? (Photo Source: AP /Wilfredo Lee)

Please pardon my (lack of) humour. The actual inconvenient truth is that thousands of fans having a team ripped from where they lay is an unforgivable act. But it’s also the price of doing big business for the NFL and it happens time and again. The NFL is on course for 13 relocations since 1960 when the Raiders move to Vegas in 2020.

The league likes the 32 team format; it took much iteration but eight divisions of four, with twelve making the play-offs, just works. So it would appear an expansion team is highly unlikely.

Degrees of Sadness

For what it’s worth, not all relocations are created equal. Browns fans literally woke up to find they had no team for **** sake. Before watching the same team, wait until Cleveland had an expansion team before becoming Super Bowl champions 4 years later.

Jags fans have been sharing their team for years. This wouldn’t come as a surprise AND rightly or wrongly the supposedly average to poor attendance in Jacksonville is oft brought up by the NFL cognoscenti.

Plus there’s currently three teams in Florida (not to mention college teams out the wazzou.) Tampa is a 3 hour 16 minute drive, Atlanta is 4 hours 45 minutes and Miami 5 hours.

If the Chargers were to move after failing to establish in LA, there’d still be the Rams and likewise numerous college options. I’d feel for the fans in San Diego committing to travelling to LA consistently, but as we’ve seen, attendances are worrying and projected revenues have already been slashed for the franchise.

If geography matters by all means these fans should get a judgement free pass to change teams. If not, then good, let them try being a UK/European NFL fan, at least they won’t have the torturous late nights and bloodshot eyes. Roll on 2022.

A Tortured UK NFL fan (Photo Source: Mattress Advisor)

Sorry, so why all the Twos?

Our target year of 2022 has been consistent in reports for years and is significant due to the new Collective Bargaining Agreement (CBA.) The contract between the NFL and NFL players union is set to be agreed in 2021. It’s worth noting too that media rights come up for grabs in 2019/20, but one thing at a time.

The CBA is hugely important for the NFL as it sets out the parameters for how players enter into contracts with both the NFL and teams. It covers what is expected of players and can also set how the NFL operates.  For example the CBA could commit players to X amount of international travel or even financially punish players for committing offences that prevent them obtaining the required visas.

This agreement will help shape the circumstance in which any international team could operate and enforce teams and players to play ball where they may prefer not to. Though with 29 of 32 teams having played a London game hopefully the majority have been sold on the benefits.

 

How do you move an American Football team out of America?

The term across the pond is thrown around so much in relation  to the NFL I made a twitter handle out of it (@NFLaXthePond – lets be friends) but its heavily doused in irony.

There’s already a transatlantic sports franchise to be learned from by the way, the Toronto Wolfpack are in their 3rd season of Rugby League’s lower divisions, playing predominantly UK based teams with opportunity for European fixtures.

This is obviously no small pond though and so to give this venture its best chance to succeed, the team would need to be in an East Coast division, necessitating a swap in division.

Moving Mountains

Controversially, the two franchises in the most illogical divisions are, maybe, the most famous; the Dallas Cowboys and the Miami Dolphins.

I get taking either away from their current rivals (especially when Brady’s retirement is finally in sight for the ‘Fins) is unfortunate. But if the Dolphins were to swap with the Jags. They’ve already been in the same division as the Colts (Baltimore and Indianapolis iterations) for 30 years. Likewise the Houston Oilers (now the Titans) throughout the 60s. So there is history there. Now consider the drama of a Texas in division rivalry, twice a year we’d have media frenzy.

The current geographical set up for either team makes little sense and moving them to the AFC south in this example saves time and the environment. The Cowboys would save almost half the time flying in division that they do now 46.2% and the Dolphins would save 18.5%.

Benefits for transatlantic journeys as you might expect are even more worthwhile. Compared to the AFC South savings of around 20% translate to; 10.6 (AFC East) and 9.2 hours (NFC East) total saved on round trips for the three divisional opponents

The journeys themselves are obviously more manageable for East coast teams. Below is a tabled comparison between flights to London and LA for would be divisional opponents. As you can see the increase is significant but not impossible. And yes, I did this myself.

Full bar = London flight time, Yellow portion the LA equivalent

Let’s talk about Tax baby                                            Section amended 10/11/18

Due to the diligent feedback of a kind reader I was directed to the Foreign Entertainer tax rules. For better clarity I have amended this section with the caveat that Tax lawyers earn obscene money, if I were one I wouldn’t give away this information for free.

Having said that, Law School does teach you some things, so lets take an educated guess. Per the guidance, payments made to players above the personal tax allowance (£12,500 in the recent “Budget”) are charged tax at the basic rate, currently 20%.  The amount to be taxed can be reduced by removing linked expenses such as; food/drink, accommodation, training facilities, travel, support staff etc etc. The tax is deducted from the wage and paid by the employer.

As teams are able to deduct all the associated costs and apply them across the roster including the players’ personal expenditure this would be a substantial deduction. On the face of it 20% is much lower than the federal tax charged in the US of 39.6% on earnings over circa $440,000. There are then varying additional State income taxes ranging form 0-13.3% (the highest being California where four teams are currently based.)

There are likely to be ways to reduce these US taxes so the difference may not be quite as stark as it appears. Assuming only one of the two regimes can apply tax (by no means guaranteed) for the 8-10 games played in the UK this could actually be a saving for players.

Worth noting too is that the UK does charge a pro-rated indirect income tax for foreign entertainers. So any endorsements would likely be calculated against the % number of games & events undertaken in the UK for the year.

The players though will have the opportunity for broader sponsorship appeal globally in a huge market so this could still be worthwhile.

I won’t go into the NFL’s corporation tax position any further as essentially it shouldn’t really alter between the current scenario of multiple “one off” games or an established franchise.

Given the potential for increased revenues for the league the NFL may even agree to contribute to tax elements as part of the CBA.

Establishing a team gives the NFL better bargaining power in the current political climate with a UK government that should be thirsty for establishing US trade connections through “America’s Past time.” The pound is weak and many US companies have increased M&A activity as a result, why not let them feel at home.

This leverage would likely be used to agree a simplified tax agreement whether that would be to reduce the amounts or simplify the process would probably be subject to negotiation.

 Why London? Why Now?

In short, London has the biggest surrounding population and best infrastructure for a team in the only country in Europe that share a language with the US. It’s infinitely more accessible for this continent (and others) than the US. The EMEA regions are known for their sports obsession and the NFL is only just tapping into the market, building a team here could truly broaden horizons.

Many States have one team, almost in the same manner we have national teams in Europe, this lucky franchise could potentially have more than one continent.

So when the NFL hears; “hey my Uncle bought me this Steelers onesie 30 years ago and it still fits, I can’t change teams.” they don’t care. Keep it on John, they’d say, please take a frankly terrible towel too, you need it.

There’s plenty of scope to develop an ardent fan base even if no-one swapped teams, with a uniquely intense local atmosphere to boot. Whilst that develops there’s proven to be more than enough support to watch even awful matchups, with demand hugely outstripping available tickets.

Stadia

Logistically London offers the NFL a huge number of variables to assist scheduling between competing fixtures at venues. Few (if any) other cities in the world have five stadiums with capacities of 60,000 or more.

Wembley is an established NFL venue, the new White Hart Lane has been substantially adjusted for the NFL and Twickenham has already been utilized twice.

The dual pitch system at the new White Hart Lane brings even greater flexibility, if needed there is the opportunity for NFL and Premier League games to be played in the same venue on the same day. I’d suggest this is part of the reason this venture was even agreed to.

Imagine, two of the most popular sporting leagues in the world offered in one hospitality package. It’s the type of opportunity that opens both doors and cheque (correct spelling, don’t @me Chad) books. There is precedent, in LA Staples centre has hosted two events in the same day. The regularity of Sunday football noon kick-offs and NFL Sundays at 6pm (GMT) allows a 4 hour window between. Just enough for fan control. This topic alone will have thousands of words spent on it, but it is possible.

Then, as I alluded to, consider that opportunities at the Emirates and the London (formerly Olympic) stadiums are still to be explored. London stadium even hosts two Yankees v Red Sox games in 2019 which evidences their own interest in US sports opportunities.

Real Opportunity

Having an established franchise would offer the NFL certainty in it’s planning. With that certainty comes the ability to seek efficiencies. Such as having the team play for 3 or 4 week spells in London (saving half the flights of the current set up) or the US and keeping a US base, presumably in a sunny tax haven state. Utilising a UK based NFL facility to develop young International talent for US scholarships the rest of the year perhaps.

“The Fridge” walking for the London Monarchs back in the day. (Photo Source: Uncredited)

Will this madness ever end?

I appreciate you persevering with me, the concept of an American Football team in London is almost as mad as an American Werewolf in Paris. It just might work though, and the Eastward expansion would make many people Scrooge McDuck kinda rich.

Plus for UK Dans it would create jobs, opportunities for kids to grow up with a local team or the small matter of play-off games here. So for the dissenting UK fans, if it isn’t too much skin off your nose, when the NFL asks if we want a team, just say yes?

I promise, we’d give ‘em a better name than the Monarchs too. Something that would really strike fear into the hearts of their American foes. The “British Tax Collection”? No. The “English Includes Extra Vowels”?

Worry not, I’ve got it… The “London Jetlag.” J! E! T! JETLAG! JETLAG! JETLAG!

N.b. There are some UK fans not named Dan and I ignored their requests to avoid sports metaphors.

Follow Dan @NFLaXthePond

P.s. Article Tax section edited 10/11/18 for factual accuracy following feedback. Our thanks to Ray Burton.

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