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August 24, 2017

NFL draft's $95 million economic impact exceeded expectations in Philly

Temple researcher discusses findings from survey on three-day event

By nearly all accounts, Philadelphia's three-day experience hosting the 2017 NFL draft in April was a resounding success. More than 250,000 visitors set a new attendance record, media covering the event raved about the atmosphere, and the Eagles came away with what many believe will be a talented crop of young players.

But when the dust settled and the Benjamin Franklin Parkway was cleared, the big question on the minds of many locals was whether or not the city fully reaped the economic benefits of such a high-profile event.

New research out of Temple University, commissioned by the city's Convention & Visitors Bureau, shows that Philadelphia surpassed initial projections, generating a total economic impact of $94.9 million.

"It can be a black box for people, and sometimes you see wildly different estimates for the same event," said Jeremy Jordan, associate dean of Temple's School of Sport, Tourism and Hospitality Management. "We take a conservative approach because there are a lot of assumptions built into this kind of analysis. One of the things we do is collect primary data on spending from attendees."

Jordan and his team surveyed 4,794 people who attended the event from April 27-29, the largest response they've had after conducting similar research on the economic impact of the NFL draft in Chicago during the previous two years. Based in part on those findings, the city had originally projected an economic impact of about $80 million.

"We had a higher attendance than Chicago," Jordan said. "What we saw is consistent spending patterns over the three days. I think we just saw more spending in more categories, and Philadelphia got more out of it because of the attendance."

The final number is calculated using three factors. Direct spending covers the total from visitors, meeting planners and exhibitor costs. Indirect spending covers business-to-business transactions required to stage the event. The most difficult figure to determine is induced spending, or the secondary infusion the economy gets from an uptick in business, such as a restaurant server earning more and thus spending more on local goods and services.

Temple's Sport Industry Research Center pegged direct spending for the 2017 NFL draft at $56.1 million, a figure that includes the $20 million contributed by the NFL to produce the event in Philadelphia.

Indirect and induced spending came out to a combined $38.5 million in personal income from the 30,000 jobs, including 914 full-time equivalent positions, supported by the draft. $7.9 million in state and local taxes were also created from income tax, sales tax, hotel occupancy tax and other revenue categories.

'A viable track record'

Beyond the immediate economic impact, Jordan explained that April's draft will be a boon for future tourism in Philadelphia, which has solidified its profile globally after the papal visit in 2015 and last year's Democratic National Convention.

"It's kind of the city's resume," Jordan said. "Now we look at the event portfolio and what we've been able to host — and host well. As other events look to find a destination, they will see a viable track record."

Philadelphia is still in the midst of a hospitality expansion to accommodate future events and a growing reputation as a global destination. The NFL draft coincided with the Penn Relays, and while the 18,991 hotel “room nights” during the draft fell shy of initial projections, Jordan said hotels actually saw higher revenue.

"Total room nights were lower, but the hotels earned more," Jordan said. "A large portion of that can be attributed to the nature of the event. There was a significant number of people, over a third, who came and went home or stayed with family and friends."

Visitors from 42 states came to Philadelphia for the draft, and the vast majority of them — 79 percent — said they would recommend Philadelphia as a travel destination. Sixty-two percent said they intend to return to Philadelphia for a vacation within the next 12 months.

"It went as successfully as it could have gone here," Jordan said. "I don't know how it could have gone any better from the weather to fan behavior and the media."

For the NFL, it's reasonable to wonder why, after spending $20 million, they wouldn't be more aggressive about taking a bigger piece of a $95 million pie.

"It's a branding opportunity for the NFL," Jordan said. "Football season is over. They want to maintain excitement and interest. They want to showcase the brand at a time in the calendar when it's usually more challenging."

Philadelphia, like Chicago before it, initially appeared to be a front-runner to host next year's NFL draft. Part of the city's appeal is its location within reasonable range of about 10 other NFL teams and their respective fan bases, but a May report hinted that Dallas now looks to be the favorite, also edging out Kansas City and Green Bay. While Dallas doesn't share the same proximity to other NFL cities, Jordan said he would expect similar impact because the event's popularity is growing.

With the recent announcement that Philadelphia will host four of the next five Army-Navy games, Jordan said the city is poised to remain a strong contender for new and repeat events in the future.

"That's a coup," Jordan said. "It's a multi-day event with alumni bases, lots of socializing and other events attached to the game. It may be even bigger than the NFL draft."

In a football-first city, the only mountain left to climb now is the Super Bowl. While the event was held at New York's MetLife stadium in 2014, recent statements from Commissioner Roger Goodell suggest that outside next year's Super Bowl at Minnesota's domed U.S. Bank Stadium, cold weather commitments could be a thing of the past.

Not that a city can't dream.

"It would be a great thing for Philadelphia," Jordan said. "It's one of the marquee events in the world. We would definitely be on the map after that."