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For fans of shiny, new sports teams — and executives eyeing revenue opportunities in new markets — nothing generates excitement quite like league expansion. Currently, each of North America’s Big Four sports leagues is considering expansion franchises. The National Football League (NFL) hosted five overseas games in 2023 and continues to tease a potential European expansion with as many as nine international matchups across England, Germany and Brazil. In the National Basketball Association (NBA), Commissioner Adam Silver has openly discussed the likelihood of domestic expansion teams in Las Vegas and Seattle and is pushing for international expansion into Mexico City as a gateway to Latin America. And speculation grows around the National Hockey League (NHL) growing beyond its current 32 teams. Other leagues, including the Women’s National Basketball Association, National Women’s Soccer League and Major League Soccer, are also using domestic expansion teams to help capitalize on growing momentum.
League expansion also has significant implications for global growth and monetization of sports. While moving teams into new markets has its benefits, a franchise should analyze potential fan bases and the dynamics of relevant competitive landscapes to help determine if expansion is the right business move.
Scoring big — the benefits of new markets
The two core benefits of league expansion are the ability to reach a previously untapped fan market and the creation of new sponsorship relationships.
When a new team comes to town, they can typically expect to attract new fans, sell more tickets and merchandise and have more eyeballs on their programming. Consider the success of the Las Vegas Golden Knights. Since entering the NHL in 2017, this latest expansion team averaged $200 million in annual revenue and boosted league viewership, merchandise sales and ticket revenue — while helping generate excitement for hockey in the middle of a desert.
International markets are also primed for expansion as streaming technology and globalization have ramped up interest in professional sports around the world. Global expansion can offer a larger fan base and potentially larger revenue opportunities. The NFL has been playing regular season games in London since 2007 and has added games in Mexico City since 2016. In 2022, the NFL announced a four-year commitment to play games in Germany. So far, the NFL International Series is considered a success, attracting millions of fans and generating revenue and exposure for the league and its teams.
International leagues set their sights on the US
Leagues looking to expand into the US are incentivized by revenue opportunities a large and relatively wealthy population can offer. European soccer teams — and leagues — are more seriously testing the US market with preseason friendly matches that can help further grow the fanbase and help these leagues assess the viability of deeper US investments. In the summer of 2023, a friendly match between FC Barcelona and Real Madrid drew over 80,000 fans, setting a record for soccer match attendance in Dallas. Formula 1 and rugby are also generating buzz in the US, and even cricket is looking to capitalize on the trend. Investors have launched a professional cricket league for the US, spending $100 million to set up a six-team league. The league officials were delightfully surprised by consistent attendance throughout the season, selling out the vast majority of the games.
In addition to revenue generated from in-person games, there’s also the potential for lucrative media rights deals. As new teams tap into growing markets and larger audiences, leagues are better positioned to negotiate bigger deals — especially given the explosion in demand for live sports on streaming platforms. Additionally, when a new brick-and-mortar sports venue is built, it’s a blank canvas that can be filled with sponsorship assets teams can sell to new markets. With smart stadiums, dynamic ads and data clean rooms, teams and leagues can now offer a wider range of sponsorship options to partners of all sizes.
In the US and abroad, expansion opportunities abound. The upcoming Los Angeles Olympics in 2028 could even act as a catalyst for growth. Sports like cricket could garner US interest, and American football could capture more international attention as the Olympic debut of flag football might feature NFL players.
Harnessing the power of fan behavioral data: Three key analyses
Before targeting a new franchise, leagues should prioritize fan behavior analysis. More fans can translate into more sponsorships, media rights deals, merchandising and tickets sold. But one of the ways to help attract fans is to know what they expect, value and are willing to pay for.
There are several standardized and specialized types of analysis a new franchise should undergo to help gauge fan behaviors and attitudes. These efforts can help provide teams with valuable insights informing their fan acquisition strategies, increasing the odds of media rights success, and ultimately contributing to the growth and evolution of the sport.
Consider these three types of fan base analyses:
- Geospatial consumer analysis can help track the location of consumers before and after sporting events, providing insights into where potential fans live and work, their travel patterns and their preferred locations for pre- and post-game activities. Geospatial analysis can be a key driver for fan journey mapping, sponsorship partner targeting and even merchandising.
- Credit card spend analysis can reveal the habits and preferences of potential fans. It can show how often consumers attend sports events, how much they spend on tickets and merchandise, and their spending patterns at nearby restaurants and bars. Credit card spend analysis can help teams tailor ticket pricing, merchandise offerings and collaboration with local businesses. Combined with geospatial consumer analysis, it can help you identify where high-value sports fans live, which neighborhoods have the highest amount of in-person attendance versus watching from home versus watching from bar/restaurant, and what current and potential sponsorship partners would match their spending and traveling habits.
- Legacy analyses, such as publicly available census data, consumer surveys and focus groups, can supplement these insights to help reveal common sports fan traits, their interests, what they value in a sports experience and what would motivate them to support a new team.
Weaving together insights from these various analyses can give your team a more holistic understanding of your potential fan base to inform your go-to-market prioritization roadmap and fan acquisition tactics and formal business case for expansion.
Cracking the code of market and competitive dynamics
Taking your franchise’s market, goals and fans into account, consider these two multifaceted steps as part of your broader launch plans:
- Understand the economic environment and create sponsorship assets by assessing the local economy through indicators such as income trends and employment rates. Evaluate potential sponsorship opportunities through indicators like the number of large corporations. Conduct an economic impact study so you can identify potential impacts the franchise could have on the market. This can help your franchise negotiate public support through local governing bodies.
- Analyze the competitive landscape through social media listening, geospatial analysis or traditional market research methods. These analyses can help you gain insights into the popularity of competing teams and the potential for lucrative rivalries or synergies with existing teams. This kind of industry data can be critical, as the presence of competing professional or amateur teams can be a double-edged sword. On the one hand, it can suggest a strong sports culture and a market of fans already engaged with sports. But it can also mean a fight for attention and resources. Rivalries can drive fan engagement and media attention, while synergies, such as shared use of facilities or joint marketing initiatives, can also lead to cost savings and increased reach.
Expanding the playing field in 2024
League expansion in sports can offer a unique opportunity for growth and monetization. By tapping into new markets, both domestically and internationally, leagues can attract fans, generate revenue and expand their global reach. However, successful expansion often requires strategic analysis of fan behavior, market dynamics and competitive landscapes. By leveraging data and insights, leagues can make informed decisions, unlocking new growth opportunities and shaping the future of sports.
So, what can that future look like in the near term?
Beginning in 2025, the NFL plans to host up to nine games a season in international locations, equivalent to a home stadium's annual share. We’re forecasting that the NBA and Major League Baseball (MLB) are likely to unveil their own formal plans for expanding abroad. The success of these endeavors will depend on the incoming franchises' ability to measure and demonstrate the potential of their new fan base to future sponsors and investors. And as new expansion efforts will likely bring new revenue streams and growth to leagues around the world, we hope they can also bring excitement to the next generation of fans.
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