The Business Behind The 2018 NFL Draft

The NFL Draft begins Thursday night, kicking off a three-day event that has transformed from a humble ballroom production into a big budget spectacle and the NFL’s most important offseason offering. But instead of more speculation about the top picks, let’s tackle the big business that fuels the 2018 NFL Draft.

New York City played host to the NFL Draft for the first 50 years, moving from hotels to its long-time home, Radio City Music Hall. Then, in 2015, the NFL moved on from the 6,000 seat theater to Chicago, where it was held for two years.

Last year, Philadelphia won the rights to host the event, building upon Chicago’s impressive outdoor fan festivities. Roughly 250,000 visitors spent an estimated $56 million on everything from hotels to food in Philadelphia.

‘Everything's Bigger In Texas’

This year, the Dallas Cowboys play host to the 2018 NFL Draft at AT&T (NYSE:T) Stadium in Arlington, Texas, where roughly 400,000 people have registered to attend. Texas Gov. Greg Abbott's Event Trust Funds even donated $2.2 million to help Jerry Jones’ team play host.

Outside of the 20,000 fans a day that will gain entry into AT&T Stadium to watch the actual draft, 27 NFL corporate sponsors will host and market to fans during the three-day NFL circus. Anheuser-Busch InBev (NYSE:BUD) and Frito-Lay (NASDAQ:PEP) are set to host fans at different pop-up venues. Meanwhile, Nike (NYSE:NKE) will run a clinic with Dallas Cowboys’ star Ezekiel Elliott.

Fresh off grabbing official NFL sponsorship rights from Papa John’s (NASDAQ:PZZA) , Yum! Brands’ (NYSE:YUM) Pizza Hut will try to capitalize on the fanfare. Another big NFL partner, Verizon (NYSE:VZ) , is the presenting sponsor of the red carpet, as well as the NFL Network’s TV coverage.

Television Extravaganza

Last year’s NFL Draft grabbed an average of 4.6 million combined TV viewers across ESPN (NYSE:DIS) and NFL Network. And this year could be even bigger, as it marks the first time that the entire NFL Draft will be broadcast live on television.

The first three rounds of the draft, on Thursday and Friday, will be broadcast live across the NFL Network, Fox (NASDAQ:FOXA) , ESPN, ESPN2, and ESPN Deportes. Saturday’s coverage will also be available on NFL Network and ESPN, with ABC simulcasting ESPN’s coverage of rounds four through seven for the first time ever.

Draft coverage can also be live streamed through the NFL app or NFL.com, as well as on the Fox Sports and ESPN apps. Notably left out of the coverage are CBS (NYSE:CBS) and NBC (NASDAQ:CMCSA) , which both pay billions to broadcast NFL games.

Player Money

Clearly, the NFL Draft is a big business. But the people that stand to benefit the most during the three-day event are the players taken in the first-round, particularly those drafted in the top 10.

Myles Garrett, last year’s top pick, signed a fully guaranteed four-year, $30.4 million contract with the Cleveland Browns. This included a $20.3 million signing bonus. The last pick in the first-round, Ryan Ramczyk, signed a four-year, $8.9 million contract with $6.7 million guaranteed.

The average second-round contract was worth about $5 million over four years, according to Spotrac.com. These numbers slowly shrink as the rounds go on, with pick 256 in the 2018 draft excepted to land a signing bonus of $69,784.

Meanwhile, the top pick in the 2018 NFL Draft is expected to make $32.9 million over his first four years, including a $22.1 million signing bonus.

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