Super Bowl or Super Indulgence?
When you add it all up, how much money is spent on the Super Bowl? How much do we really consume on Super Bowl Sunday? Do the cities that host the game reap an economic benefit? Let’s explore these interesting topics as we digest Super Bowl LI.
The First Super Bowl
The inaugural Super Bowl took place in January 1967. The Green Bay Packers, who had already won several NFL championships in that decade, beat the AFL champion Kansas City Chiefs. Super Bowl I was seen by 51 million television viewers. A 30-second commercial cost $42,000 and admission to the game cost $12 for the best seats in the house. To put this number into perspective: today, it costs about the same amount to attend a movie.
Television Audience & Tickets
The Super Bowl phenomenon has grown as the years have passed. In 2016, over 111.9 million Americans viewed Super Bowl 50 on television, making it the third largest TV program in US history (the previous year’s Super Bowl was the largest). In addition, an estimated 175 million people worldwide watched the game, which was broadcast in 180 countries and in 25 different languages.
The “face-value” of tickets to Super Bowl LI ran from $850 to $3,500 per ticket. Of course, many are purchased for higher prices on the secondary market, from large ticket buyers and scalpers. A quick review of the secondary market showed that you could purchase a single ticket to Sunday’s game for about $5,000. Or, if you want a fantastic seat, you could have spent upwards of $358,000 to get a 400-level suite seat. Buy a house with a pool and some new cars or watch a football game?
Television Commercials
The commercials aired during the Super Bowl have received quite a bit of attention over the years and Super Bowl Commercial Watch Parties have become quite popular. Because it is such a watched event with very high TV ratings, advertisers develop especially creative, impressive television commercials just geared for the gigantic Super Bowl audience. And they also pay a lot to air them: a 30-second commercial now costs between $5 – $5.5 million.
a 30-second commercial now costs between $5 – $5.5 million
More recently, social media now figures prominently in conversations over the effectiveness of Super Bowl advertising. And it is the Super Bowl conversations on social media that advertisers are so desperate to figure out. Consider these stats from last year’s game (final stats from Super Bowl LI are still being calculated):
· Facebook said about 60 million people joined the Super Bowl 50 conversation with 200 million posts
· There were 27 million tweets, sent by 3.8 million unique users and viewed by 4.3 billion people, according to Twitter
· Instagram said 38 million users had 155 million interactions on their video-sharing platform
· The conversation was most active on all three platforms during the halftime show when Coldplay, Beyoncé and Bruno Mars took the stage
Total Spending
It should come as no surprise that people spend a huge pile of money on Super Bowl-related parties and activities. In 2016, total consumer spending related to the Super Bowl was about $15.5 billion. And this number has grown quickly: as recently as 2007, consumers spent about $8.71 billion. In 2016, U.S. consumers spent, on average, almost $85 on purchases related to the Super Bowl. Most of it was on food and beverages, but consumers also shelled out money for team apparel and accessories, Super Bowl-specific merchandise, decorations, new televisions, and even furniture.
Here is some useless trivia on how much Americans buy and consume on Super Bowl Sunday. Collectively we ate/drank/spent:
· 1.3 billion chicken wings
· $583 million for beer
· $537 million for salty snacks
· $330 million for pizza
To keep these numbers in perspective, let’s remember that there are about 320 million people in the US.
Economic Benefits for Host Cities
With all this money being spent, do cities that host the Super Bowl reap large benefits? The NFL of course says, “Yes,” but some economists doubt this conclusion.
The Super Bowl is held in different cities each year, virtually always in the southern part of the US or in a domed stadium. According to the NFL, the host city brings in over $600 million in revenue due to the Super Bowl. These amounts come from tourists paying for food, drinks, merchandise, hotel rooms, transportation, and so forth.
Some sports economists disagree. According to their studies, the economic benefit to host cities comes closer to zero. The real number is probably somewhere between the two.
First, there is the “substitution effect.” In other words, some of the money going to Super Bowl tickets and related events would have been spent by local residents on other forms of entertainment or restaurant meals. These residents would still have spent money on food and drink anyway, perhaps for a basketball game party or other social event.
Second, there is the “crowding-out impact.” These Super Bowl fans are spending loads of money, of course. However, they are not necessarily spending much more than other tourists who would have come to the host city anyway, if not for the Super Bowl. Southern cities receive large amounts of tourists year round, so tourists would have come. These other tourists have delayed their visits or gone elsewhere to avoid the Super Bowl crowds – so it’s a wash. Maybe.
Summary
The Super Bowl has become the largest entertainment phenomenon in American history. And aside from World Cup soccer in many other countries, it is the largest sporting event in the world. Hundreds of millions of people watch the game, including the commercials that cost millions to make and air. We spend billions of dollars on the Super Bowl, including millions of gallons of beer and millions of pounds of food. We comment incessantly on Facebook and Twitter, in addition to our conversations at home, at work, or via telephone or e-mail.
Makes you wonder, does anyone even watch the game any more?