Economic Blitz: The Business of the Super Bowl

Unless you've been living under a rock for the past few weeks, you probably know that this Sunday is the Super Bowl to be played between the Kansas City Chiefs and the San Francisco 49ers in Las Vegas. The Super Bowl is considered to be the largest single event on the planet. While it is definitely a game, the Super Bowl is not just a sporting event; it is a global economic phenomenon. 

Last year on game day, the average spectator inside the arena spent an average of $167 each. Overall gameday revenue - including tickets, hospitality, VIP passes - reached a total of $60 million! The average ticket price for this year's game in Las Vegas is hovering around $9,800, which is 70% more expensive than last year's big game. Ticket prices this year are the second highest ever, only falling behind to the 2021 game that limited the number of fans because of COVID. One major reason for the sky-high prices is that tickets are not initially offered for sale to the general public. Instead, the NFL and its teams distribute the tickets - most of which go to corporate partners and season ticket holders. Other factors that are driving up the ticket costs include the location and the teams playing.

The host city gets a huge economic boost in the days and weeks leading up to the big game. In 2020 when the 49ers and Chiefs faced off in Miami, the Super Bowl Host Committee and Miami Beach commissions reported that the Super Bowl brought in over 4,500 new jobs to the area and had a total economic impact of $571 million. When talking about the jobs created, it's important to realize that most of them are service industry jobs (restaurant workers, hotel workers, Uber or Lyft drivers, etc) and are mostly temporary. Tim DeSchriver, associate professor of sport management at the University of Delaware's Alfred Lerner College of Business and Economics, noted, "Once the crowd goes away, they don't need those service workers, but that's still money in people's pockets... [and] that's still important." Matt Robinson, professor of sport management, agreed but also added, "Because the costs of those services are higher during the week, those workers might make in a week what they would normally make in six months. So there is a significant benefit."

Not only does the host city benefit from the Super Bowl, but the participating cities also benefit. Watch parties are usually held in the cities - both in large venues (sometimes even in the home stadium) to small bars. What about those of us who host a Super Bowl party at our house? According to Sports Illustrated, Super Bowl Sunday is the second-largest food consumption day in the United States, behind only Thanksgiving. On Super Bowl Sunday, Americans will spend $1.3 billion on beer. Experts estimate that 1.45 billion chicken wings will be consumed during Super Bowl weekend. But what food is eaten the most on Super Bowl Sunday? According to the American Pizza Community, it is pizza - with an estimated 12.5 million pizzas sold in the US on game day in 2022.

In terms of advertising revenue, everyone knows that the Super Bowl provides the most valuable content on TV. For 2023's Super Bowl, one 30-second ad cost $7 million. Last year, Amazon spent a total of $32 million on Super Bowl ads; Toyota and Budweiser each spent $25.6 million on ads during the game. "During a typical TV program, ads are a nuisance that people tend to avoid by changing the channel, leaving the room or shifting their attention to something or someone else. [But] during the Super Bowl, ads can be the main reason why the viewer is watching," said Matthew McGranaghan, an assistant professor of marketing.

In addition to the ads, some people watch the big game for the halftime show. While the artists may not be paid for their performances, the exposure they gain is invaluable. The halftime show serves as a platform for artists to showcase their talent to a massive global audience - leading to increased music sales, concert ticket purchases, and brand endorsements long after the Super Bowl.

Whether you are watching the Super Bowl for the game, for the ads, or for the halftime show, everyone is bound to find something to enjoy on Sunday!