The Houston Texans 2023 Draft: A Business Decision as Much as a Football Decision

For the Houston Texans, the biggest moment of the NFL calendar fast approaches. By the end of April, the NFL Draft brings the Texans their next series of players that hopefully bring the team glory. That “glory” remains in short supply the last couple of years. Many will focus on the on-field product, noting how the new players will fit the team’s new scheme, especially as the squad is on its third coaching staff in as many years.

Yet, the upcoming draft will be critical not only for the on-field results. The Texans franchise, while in the entertainment business, is a business entity. For a business, it is all about the bottom line. What brings in a significant portion of the team’s revenue is home attendance. Gate receipts, concessions, merchandise…all have their part in filling the coffers of the team. Yes, there is revenue-sharing and the TV deals spread across the league, which certainly helps, but the team that can get the most butts in seats will usually rule the league in terms of revenue.

For most of the last decade, the Texans, by virtue of their 71,000+ NRG Stadium, ranked in the top 10-11 teams in terms of home attendance. From 2016-2019, the squad averaged over 71,700 paid attendees (per Pro Football Reference). Since the team’s inaugural season, the Houston fanbase generally came out en masse to watch the team. The 2016-2019 era saw three winning seasons, three division titles, and in the lost season of 2017, the team had its most dynamic rookie in franchise history (Watson).

However, the 2020s offered a different story. First, the pandemic of 2020 threw off all attendance stats, as many teams played games in empty or near-empty stadiums. Then, 2021 saw inconsistencies with some stadiums immediately opened up to full attendance and others with some degree of attendances restrictions. Additionally, 2021 saw the league move to a 17-game schedule, with some squads slated for 9 home games and some 8. The Texans received the additional home game for 2021 but played 9 road games for 2022.

In one respect, the Texans benefited from the extra home game in 2021, as they set a single season record for fan attendance with over 601,000 paying fans attending the home games. Yet, one needs to peel back the initial stats to see something less than ideal. Over 9 home games, that 601,000+ fans only translated to 66,800+ fans per game. Even accounting for Texas’ looser COVID-19 restrictions about public gatherings, that still saw a near 5,000+ fan drop in average game attendance. In 2022, the 8-home game slate saw a slight improvement in fans per game attendance, bumping up to 67,900+, but that is still an over 3,000 fans per game shortfall.

The primary culprit: The on-field product. The 2020s are shaping up as the worst decade in the team’s short history. The home record from 2020-present: 4-20-1. This past season saw the first season in franchise history where the Texans went winless at home (0-7-1). It doesn’t take a MBA from Rice to realize that people are not going to spend money (average ticket price of $118/game) to watch a poor product. Additionally, this iteration of the Texans lacks significant star power. Laremy Tunsil and Dameon Pierce do not make up for the loss DeAndre Hopkins, JJ Watt and Deshaun Watson (pre-legal issues).

In the overall financial picture, the recent drop in per game attendance numbers hasn’t hurt the bottom line for Houston. Forbes ranked the Texans as the #11 most valuable franchise in the NFL at $4.7 billion. The team also pulled in roughly $571 million in revenue, with $78M in gate receipts. The various NFL-level TV and merchandising deals do much to pump up the value. At one point, projections showed Houston climbing to the #5 most valuable franchise in the NFL by 2025 with a projected revenue of $671M. The team’s initial $600M investment in 1999 yields a near eight-fold gain.

Still, even the McNair family isn’t immune to the shortfall in attendance figures and the revenue losses that result. The projections about 2025 did not account for a significant drop in Texans’ home attendance, with the subsequent loss in gate revenue. When the neighboring franchise, Dallas, leads the league in home attendance and clocks in as the most valuable sports franchise in the world, worth $8 billion, people will notice. They certainly notice in the Texans’ offices.

Hence, when looking at the draft picks for the Texans, there is more than on-field considerations. A QB like Stroud or Young could do much to jolt the apathetic Houston fanbase to invest their money back into the team. Given the football-mad nature of Texas and the passion Houston fans put into the team in the 2010s, the right combination of players and financial investments could easily recapture that glory.

Not that the team’s goal should be to help the billionaires. Yet, smart investment in players with instant star ratings (like a potential franchise QB) as well as an overall improvement in the on-field product will be the ultimate win/win. The fans get entertainment and civic pride for their team and city, and the Texans increase their prestige and financial value. Perhaps the Texans don’t select a QB at #2, but Will Anderson Jr., for all of his talent, isn’t going to bring those 3,000+ fans a game back to the stadium in the near-term. Young or Stroud will have a better chance of doing that. So, as the team gears up for the draft, on-field considerations are the primary driver, but one can’t completely discount the business implications of drafting the next face of the franchise.