🎭 The NFL is a Drama-Filled Events Business

Year after year the NFL Draft continues to show it’s an absolute gold mine.

On Saturday, the NFL just wrapped up one of its most popular weekends on the football calendar. It’s the next big talking point after the Super Bowl concludes. You guessed it, (and a great guess using context clues above) it’s the NFL Draft.

After the Kansas City Chiefs won their second Lombardi Trophy in a row, we had 3 months to frantically peruse through mock drafts, fully dissect how hand size measurements and 40-yard dashes can translate to on-field success, as well as speculate the actual positions of need for our favorite teams so we can pretend like we could be a future General Manager (wait that’s just us? that’s awk 😬). But today, we’ll take some time to review a historic weekend in Detroit for the NFL. What goes into planning the NFL draft? What are the business implications to planning a 3-day event? What success has the league seen from this evolving football-centric affair?

Let’s get after it…

What is the history of the NFL draft?

• In 1935, Philadelphia Eagles co-owner, Bert Bell, proposed the NFL hold an annual player draft to level the playing field to ensure every franchise remained financially viable. League owners ended up voting unanimously to adopt the proposal.

• On Feb. 8, 1936, at Philadelphia’s Ritz-Carlton Hotel, the inaugural NFL Draft began as teams selected from a pool of only 90 players (81 players ended up being selected) — today, 262 players are selected.

  • With the #1 overall pick, the Eagles selected Heisman Trophy winner Jay Berwanger from the University of Chicago. But…he decided not to move forward with football and instead opted to start his career as a foam rubber salesman 🤔.

• In 1980, the NFL took an even bigger step and decided to broadcast the draft on ESPN, even though Commissioner Pete Rozelle was skeptical fans would not be drawn to this event.

  • Since then, ESPN has broadcasted every NFL Draft and the event continues to grow every year.

  • But what it also did was open the door for leagues to sell media rights for their selection shows — the NBA and NHL followed the NFL’s lead that same year.

• In 2014, the NFL switched to a touring model where the draft could be held in other cities instead of having it in NYC every year (let’s just say, this change was one of the smartest decisions made by the league 🤓).

What makes this event so successful?

• Viewership. From a viewing standpoint, the NFL knows they own primetime TV (see Table 1). And they’ll continue to take advantage of their increased popularity. Thursday’s 1st round coverage drew an average audience of 12.1M (up 6% from the 11.4M viewers during the 2023 draft) across ABC, ESPN, and the NFL’s linear and digital platforms.

  • That’s higher than the average viewership for the 2023 NBA Finals, World Series, and Stanley Cup Final.

  • The total audience of 34.3M viewers was the highest since 2021.

• What’s even crazier: ESPN pulls bigger TV audiences during draft week than Super Bowl week, according to executive producer Seth Markman. The reasoning for that?

  • All 32 NFL teams have skin in the game when it comes to the draft, which means more fans are drooling for their team-related content 🤤.

• As for the draft media rights…ESPN and ABC are a non-exclusive part of Disney’s larger deal with the NFL that runs $2.7B annually from 2022-33.

  • The NFL Network, a subsidiary of the league, reportedly pays its parent $1.3B annually for the right to air live games and other content like the draft and NFL combine, which it began airing in 2006.

• Ad space is also extremely hard to come by, even for a 3-day, 35-hour programming event.

  • In 2023, Disney and ESPN sold out their ad inventory and raked in ~$16M.

  • The number of people searching online for advertisers during the draft was ~41% higher than that of an average prime-time broadcast 🤯.

• Attendance. It’s another in-person event the NFL can market to its fans, especially when the event is elongated to 3 days:

  • 1st round occurs Thursday night

  • 2nd and 3rd rounds occur Friday night

  • 4th-7th rounds are on Saturday

• The 2024 NFL Draft set an attendance record as 775,000 fans gathered in downtown Detroit, which broke the previous record in Nashville in 2019 (see Table below).

  • During the 1st round, more than 275,000 fans attended, breaking the all-time Day 1 Draft record of 200,000 set by Nashville in 2019.

• Storylines. What makes these selection shows so compelling are the storylines, anticipation, and hope that a franchise can completely turn themselves around after selecting just one player. From a fan’s perspective, being able to watch young adults fulfill their dreams after getting selected to an NFL team, surrounded by family and friends along with their reactions will always leave a smile on our face. But with that also comes drama…

  • Sometimes players who thought they would be selected early, end up dropping in the draft for all types of reasons (medical history, off-the field issues, performance, etc.)…and fans are able to see player’s reactions because cameras are everywhere.

  • ESPN and ABC have even immersed themselves in the storyline narrative. For example, if you watch the draft on ABC, you will see more interviews with player’s families (understanding where they grew up, how they grew up, hardships they went through, etc.) — you know, the tearjerkers!

    • However, on ESPN you will find more sports analysis: what do teams need, how will certain player’s help their franchise, player’s stats from college, etc.

  • In this year’s draft we saw 6 QBs selected in the first 12 picks of the draft (that never happens!). And with QB being the most important position on the team, it’s captivating to watch so many teams go “all-in” on one player.

• Economic Impact. Since the unveiling of the NFL Draft touring model in 2014, the league has shown they have transitioned into an events-driven business. By introducing the draft to more cities around the country, it has provided a boost to their local economies.

  • To give you an idea, the Anderson Economic Group (AEG) estimated the “net economic impact” number at more than $165M for the 2024 NFL Draft in Detroit.

  • Even though attending the event is free, the AEG total includes dollars spent inside and outside of the event, including hotel stays, spending at restaurants and bars, and money spent on merch bought during the draft.

    • AEG projected there will be a direct economic impact of $100M to Detroit, with an estimated total of $37M in expenditures by attendees.

    • Let’s see if Green Bay, WI can break these records come next year 😉.

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Quick Hitters

• 🏀 Just after our wonderful NBA Media Rights post last week, news came hot off the press that the NBA and Amazon Prime Video have the framework of a deal that will make the streaming service a main home for the league’s games. This would be massive! It’s expected that Prime Video’s package will include significant regular-season and postseason games, and maybe the conference finals. The thought is that the final contract will be for at least a decade.

  • Not only that, but according to the website Puck, ESPN/ABC also has a framework of a deal where it’s expected they will air games and keep the NBA Finals on its networks for the duration of its deals (at least a decade, just like Amazon). Details have not been finalized, but the dominos look like they are beginning to fall!

• 📺 The NFL media carousel continues to spin round and round. According to The Athletic, recently retired, future Hall of Famer, and future brother-in-law to Taylor Swift (??), Jason Kelce, is headed to ESPN to be part of its Monday Night Football pregame show. Jason and his brother, Travis, have an extremely popular podcast called “New Heights”, and since his retirement, he’s shown to be interested in media while drawing interest from NBC, CBS, and Amazon.

  • ESPN also added former Alabama coach Nick Saban to its lineup and will reportedly add former Patriots coach Bill Belichick to its Monday night card in a deal with Peyton Manning’s Omaha Productions.

  • On the flip side, Paramount Global also made some moves: Former MVP, Matt Ryan, will be added to CBS’ The NFL Today, as he will replace former NFL legends, Phil Simms and Boomer Esiason — all this to add a little more youth to the show.

• 🇲🇽 Actors Ryan Reynolds and Rob McElhenney are back on the pitch, again, this time they have purchased a minority stake in 100+ year-old Mexican soccer team, Club Necaxa (joining Eva Longoria, Justin Verlander, Kate Upton, and Odell Beckham Jr. as minority owners). You might remember but in 2020, Reynolds and McElhenney famously bought their other club, Wrexham AFC, for essentially $0 and completely turned them around. The club’s fan base has grown dramatically, thanks in part to their documentary, Welcome to Wrexham, which debuted in August 2022 on FX and Hulu.

  • The club earned promotion from the U.K.’s fifth division in 2022-23, and this season won a second straight promotion to the third division. It recently reported 2022-23 financials that included revenue of $13M up from the $2M-$4M range prior to their takeover…it’s safe to say Club Necaxa wants some of that magic 😉.