Mitchell Grinwald
Mr. Kramer
AP Econ
5/20/2015
The Economic Impact of the NFL Draft
The things which first come to mind when you hear NFL and economics in a sentence are likely the Super Bowl, playoff games, and advertisements. While these all are ways in which the NFL significantly impacts the economy of both individual communities and our nation, the one many forget, a significant one at that, is the NFL draft. While the draft used to be, and may still seem to many to be a small time, economically insignificant offseason event for the NFL, the stats from the latest NFL draft held in Chicago suggest that it is becoming a major economic event which cities will soon be competing for at levels rivaling that of major sporting championships.
When the NFL decided to move the 2015 draft out of New York City (where it has traditionally been held) and to Chicago for the first time, both the League and the city of Chicago likely were concerned that the draft in its new location would be poorly received as some predicted. These concerns proved unwarranted, as the Draft was a huge success, bringing roughly $81.6 million to the Chicago economy. While this may pale in comparison to the $500 million the Superbowl is expected to bring to the Arizona economy next year, the draft and the draft festival had over 200,000 visitors this year, as compared to the roughly 100,000 visitors to the Superbowl last year. So although the economic impact of the draft may be smaller than a major NFL game currently, in coming years if draft hosts are able to convince visitors to spend more money at the draft its economic impact could easily grow as it draws such a large number of visitors. Additionally, a host city does not need a new or state of the art sporting facility to host the draft as the a city does to host the Superbowl or a major sporting event, decreasing the cost to a host city. The cost to the taxpayers of Chicago for hosting the draft was $0, while the tax revenue directly generated by the event was in excess of $6.5 million. While the draft certainly provides positive externalities to the local economy of the host city, the government of the host city does not really have to provide subsidies to get the benefits once they have won the bid.
The draft is a desirable event to host not only for the revenue it brings to a host city in the short run, but also the long term impact it will have on a city. The draft generates jobs in the host city, roughly 2500 temporary jobs and 900 new, longer term jobs in Chicago this year. Additionally the draft creates interest and an increase in long term tourism to the host city. This is demonstrated by the fact that 90% of visitors to the draft would recommend visiting chicago to a friend and roughly 70% of the visitors made plans to return to Chicago on a vacation or visit within the next year.
Based on the success with which the NFL moved the draft to a new city this year, as well as the eye popping economic stats it generated, there will certainly be a high level of competition in coming years to host the draft. As the popularity of the NFL continues to grow not only in the US but worldwide, the draft will become an increasingly desirable event to host.
Works Cited
"2015 NFL Draft in Chicago By the Numbers." Choose Chicago, NFL, Temple University, n.d. Web. 20 May 2016.
"NFL Draft Town's Return to Chi-Town Means Labor Jobs." Chicago Film, Commercials, Advertising, Video, Production, Post, Tech News from ReelChicago.com. N.p., n.d. Web. 20 May 2016.
"Economic Impact - Super Bowl." Super Bowl. N.p., n.d. Web. 20 May 2016.
This is an interesting take on the effects of the NFL draft. I knew the event was popular on T.V. but I never expected this much money to be brought out. Even a sixth of the revenue compared to the Superbowl is a large economic gain. It will be interesting to see whether or not there is a battle for the location of the NFL draft in future years. Overall, nice job bringing new information on an overlooked topic.
ReplyDeleteI never knew that the NFL draft brought in that much money for the host city. It would seem like that number is only going to rise too due to the fact that there is such a focus on the draft for the teams and the fans of those teams.
ReplyDeleteDid not know the NFL draft was rolling in so much dough and the amount it makes looks to me like it's just going to keep going up also. Every city that hosts the draft should consider themselves blessed.
ReplyDeleteIt is shocking ho much money is made from the NFL Draft. The economic benefits a city gains from hosting the draft is higher than I expected personally. I follow the NFL and these numbers were surprising. It seems these numbers can continue to grow because the passion for the NFL and their teams grow. When people think of big revenue events in the NFL, they think of the playoffs and the Super Bowl, but never the draft as something that bring in that much. This piece was very interesting.
ReplyDeleteI definitely find it interesting how much money is generated by the draft itself. While you're right that it still seems small when compared to an event like the super bowl, $81.6 million can still have a substantial positive effect on a city's economy. Also, I never would've guessed that the draft would provide a source of long-term jobs. The increased revenue and exposure due to the event will surely make the draft a favorable economic event for upcoming host cities. Often times when we're just watching the event we tend to forget about its economic impacts but this it's fascinating to see how much a city's economy can benefit from an event like this.
ReplyDeleteI am slightly surprised that the Draft made that much. It is definitely not an event that is comparable to the Super Bowl money wise, but the amount it made is quite surprising, especially considering it being held in Chicago. Maybe they could try to help Detroit next year kappa
ReplyDeleteThis is a good topic to choose. It shows how much the NFL helps the economy not only during the Superbowl but in other ways as well.The amount of commercials and sponsors during the draft are crazy and bring in a lot of money. Sponsors alone bring in so much money.
ReplyDeleteThis is certainly true. What is even more interesting is the fact that not all of the money spent on draft related ads are included in the figures I mentioned. As players and teams increasingly take to social media and coverage of the NFL moves online, large amounts of ad revenue are actually generated by online ads. The real amount of ad revenue generated for the NFL and for social media or new service sites is significantly large than the tv ad revenue numbers discussed.
DeleteHonestly, I had no idea that the draft was capable of bring in so much money. I knew it was a big event for millions, but I had no clue that it had the potential to bring over $80 million to a single city. I can definitely see the draft becoming more and more popular as the years go on. I find the draft to be significantly important so I can see all of the new draft picks that Green Bay gets, but I failed to realize that there was even such thing as a draft festival. I was very surprised to find out this information. Good job!
ReplyDeleteThis is an interesting viewpoint to take. The draft is definitely something you hear less about than other happenings in the NFL, and I wouldn't have guessed it would generate such a large revenue. Perhaps this is a thing that will get more attention in the future, further increasing the generated revenue. This sounds like it's just the start of something new
ReplyDeleteKelin Olson
I had no idea that there was so much economic impact from the NFL draft. Additionally, I find it interesting that the tax payers of that city do not have to pay anything for the event, but they get to benefit from the revenue it generates. I wonder if since they moved it to Chicago if they will continue to move it or keep it there like they have had it in New York. I also found it amazing how many jobs it creates. Overall, great job!
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