NFL Draft Delivered Fun, Revenue – and Lots of Millionaires
For millions of football fans, the NFL’s annual draft is a time of hope and optimism. Regardless of how well or poorly your favorite team may have performed in the prior season, the NFL draft is a chance for teams to rebuild their roster with the best players college football has to offer. This year, the NFL draft was held in Green Bay, Wisconsin on April 24-26. Over the course of this three-day event, a total of 257 college football players were selected by the NFL’s 32 teams.
For about 50 years, the NFL draft was held in New York City. But in 2015, the league decided to hold the draft at the various cities that had an NFL team. Last year, the draft was held in Detroit. This year was Green Bay while next year’s draft will be in Pittsburgh. In 2016, I went to the NFL draft in Chicago. If you haven’t been to one, it really is a fun and unique experience. But for the host city, it’s also a tremendous source of revenue.
City officials estimate the three-day event will generate about $100 million in economic stimulus to Green Bay and the surrounding area. The draft was held near Lambeau Field, where the hometown Packers play. The draft and related attractions occupied an area roughly 4.6 million square feet. That’s the equivalent footprint of 70 football fields. And in true Wisconsin fashion, the event included plenty of sausage vendors, polka bands and cheese-carving demonstrations. I’m sure cheese curds were being tossed around like confetti.
The NFL reported total attendance of 600,000 over the three-day event. To put that in perspective, the entire population of Green Bay is a little over 105,000. Green Bay is the smallest market of all the 32 NFL teams. The NFL draft attendance record is 775,000 set last year in Detroit.
For the college football players that are drafted, it’s not just a chance to fulfill their dream of playing in the NFL, it also means a chance to make a lot of money. Each player selected over the seven-round draft process typically signs a four-year contract. Understandably, the value of that contract depends on when you’re drafted. The higher your draft selection, the greater your contract. And the difference between individual draft picks can literally be millions of dollars.
According to data from Spotrac, if you were the very first pick in this year’s NFL draft, your four-year contract is projected to be around $48.8 million. This year, that honor went to University of Miami (Florida) quarterback Cam Ward who was drafted first overall by the Tennessee Titans. If you were the tenth pick in the first round, your projected four-year contract is about $26.6 million. If you were the thirty-second pick in the first round, which is the last player selected in the first round, your contract is around $14.7 million.
For players selected in the second round, their four-year contracts are projected to be in the $11.8-$7.2 million range. In the third round, the contract range falls to $6.8-$6.1million. But even if you’re drafted in the later sixth or seventh rounds, your four-year contract is still expected to be around $4.5-$4.3 million.
For three days, the city of Green Bay was the center of the NFL universe. For the fans, it was a three-day bender of watching the draft unfold live at the event or on TV. For the city of Green Bay and its local businesses, it provided a healthy boost in revenue. And for many college football players, that three-day weekend in Green Bay created a lot of instant millionaires.
Mark M. Grywacheski, Investment Advisor
Quad Cities Investment Group is a Registered Investment Adviser.
This material is solely for informational purposes. Advisory services are only offered to clients or prospective clients where Quad Cities Investment Group and its representatives are properly licensed or exempt from licensure. Past performance is no guarantee of future returns. Investing involves risk and possible loss of principal capital. No advice may be rendered by Quad Cities Investment Group unless a client service agreement is in place.
