The NFL's Next $100 Million Opportunity

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Friends,

Shortly after ESPN was founded in 1979, the new all-sports cable network approached NFL commissioner Pete Rozelle to ask if they could broadcast the annual NFL Draft.

His response?

Rozelle was confused, wondering why anyone would want to watch him read names off a list “like a phone book.”

Now, almost 45-years-later, the NFL draft has turned into one of the biggest and most anticipated sporting events of the year. Mock drafts dominate the news cycle for 5 months leading up to the event, and a mind-blowing 600,000 people showed up for the 2019 NFL draft in downtown Nashville.

Even more interesting, I believe the draft has the opportunity to become a $100 million-plus revenue opportunity for the NFL in the future.

From 2006 to 2014, the NFL held its annual draft at Radio City Music Hall in New York City. Around 50 players would show up, work with sponsors and media on promotional appearances leading up to the event, and celebrate with their family, friends, and fans after their NFL dreams come true.

But in 2015, the NFL decided to hit the road.

In the 6 years since, the NFL draft has been held in various locations across the country — including Chicago, Philadelphia, Dallas, and Nashville. This Thursday, the event will be broadcasted from Cleveland before heading to Las Vegas in 2022.

As for the details, here’s a quick overview:

• Tickets to the NFL Draft are free — usually won by fans through a lottery — but can run up to $300-plus on secondary websites like eBay.

• Around 50,000 tickets are handed out each year, which gives you access within special “zones,” but places like Nashville will hold the event in an area where fans can overflow.

• There are multiple concerts & contests held throughout the weekend, designed to increase fan engagement for all three days (Thursday-Saturday).

The important part?

The NFL says that each event has generated around $100 million in economic activity for the host city. That’s about 25% of what a typical Super Bowl is projected to produce.

The point being, it’s certainly significant.

Economic projections for hosting large sporting events are often debated. In my opinion, rightfully so. Most projections fail to differentiate between economic impact and tax revenue, not to mention the budget constraints of potential visitors.

But when it comes to the NFL draft, the opportunities appear endless.

My guess?

The NFL will begin by doing obvious things, like charging attendees for tickets rather than giving them out for free, but eventually, they will do more serious things, like making potential host cities pay to host the event.

In the end, the NFL has done a phenomenal job turning the draft into one of the most sought-after events in sports, but don’t be surprised when they double down — eventually turning the production into a $100 million annual revenue-generating machine.

As far as timing goes, with the league experiencing more than $4 billion in losses due to COVID-19, I think it’s safe to assume this will happen sooner than later.

Have a great day, and we’ll talk tomorrow.

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