Super Bowl Awash in Money
In fact, its ability to generate revenue, on several levels, is as sure as the hands of Shaun Alexander, the Seattle Seahawks’ MVP running back who only fumbled the ball five times in 370 chances this season.
From the network airing the game, to the city hosting it, to the National Football League itself, the Super Bowl historically produces mind-boggling figures, and this year’s event is shaping up to be no exception.
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“It’s a branding opportunity that has grown beyond proportions, given all other championships in the United States,” said Milt Thompson, president of Grand Slam Cos., an Indianapolis-based sports marketing consultancy. “It is the crème de la crème.”
When the Seahawks and the Pittsburgh Stealers face off in Super Bowl XL Feb. 5 in Detroit, it is estimated that 130 million people will be watching in the United States alone.
Advertisers, paying ABC between $2.52 million and $2.57 million for 30-second spots, hope the steep investment will translate into increased sales.
Executives close to ABC have told various media outlets that the price for commercials this year has spiked about 5 percent, to 7 percent, from the $2.4 million that Fox received when it had the game last year.
Some media-buying executives, however, believe the price hikes are smaller than has been suggested—or even flat—because the current television advertising market is weak. Additionally, NBC’s Torino Winter Olympics—which begin airing five days after the game—has taken major TV advertising sports dollars.
Steve McClellan of Adweek said ABC had sold 90 percent of advertising airtime by mid-January, which is on par with past years.
“The rates, if you talk to buyers, are flat with last year,” McClellan said. “ABC is claiming that [it’s] getting a little more than that. On Super Bowl Day, [ABC] will still generate close to $200 million.”
The NFL and the Super Bowl have made giant strides since the first championship game Jan. 15, 1967, even if this year’s halftime entertainment—the aging Rolling Stones—already had released four albums in America by then.
Sprint paid the NFL a record $12 million to sponsor this year’s halftime show. By contrast, the University of Arizona and University of Michigan marching bands provided the entertainment for Super Bowl I, and a 30-second commercial cost $42,000.
The game, played in Los Angeles, hardly generated as much interest for the host city as it has for Detroit. Super Bowl I is the only Super Bowl to not sell out, prompting a blackout in the Los Angeles area. Moreover, local newspapers printed editorials days before the game decrying the $12 price for tickets as too expensive. A ticket for this year’s game at face value can cost $600, and the Seahawks made only 8,000 available to their fans, according to the Seattle Times. Corporate interests gobble most up.
For a host city, landing a Super Bowl now can mean hundreds of millions of dollars in economic activity.
A study commissioned by the Super Bowl XL Host Committee in Detroit estimated the game will generate more than $300 million for the city, translating into about 5,650 jobs and $124 million of income. The estimates are on par with economic activity surrounding last year’s game in Jacksonville, Fla.
The analysis, conducted by Lawrence Technological University in Southfield, Mich., and the University of Illinois, said the biggest impacts will be felt in the trade and service sectors. Those include the obvious choices such as hotels, restaurants, merchants and car-rental agencies.
A critical factor in reaching the economic goal depends upon how long visitors stay in the Motor City. Authors of the study said the challenge for Super Bowl organizers and community leaders will be to develop programs and activities that will attract visitors before the event, or that will encourage them to remain afterwards.
That could be more difficult in a colder climate than the traditional warm-weather cities where most Super Bowls are played. And Detroit has high hopes the game will jumpstart a city battered by manufacturing job losses and a declining population. The city last hosted a Super Bowl in 1982.
“Detroit will be center stage for a week or two leading up to the game,” said Ken Kettenbeil, the host committee’s vice president of communications. “It’s a great way to showcase the city.”
The allure of hosting a Super Bowl, and reaping the accompanying windfall, helped prompt a handful of cities to pony up for new stadiums. Raymond James Stadium in Tampa, Fla., opened in 1998 and was awarded the 2001 game, and Reliant Stadium in Houston opened in 2002 and hosted the 2004 game. Ford Field in Detroit opened in 2002, and Cardinals Stadium in Glendale, Ariz., will open later this year and host the Super Bowl in 2008.
Larger stadiums, equipped with more luxurious suites, have helped propel the NFL’s annual revenue this year to $5.7 billion. By comparison, Major League Baseball earned $4.1 billion in 2004, and the National Basketball Association about $3 billion.
New network contracts certainly could push the figure higher. Monday Night Football will move to ESPN this fall after the cable network paid $1.1 billion per year, from 2006 to 2014, for broadcasting rights.
Meanwhile, NBC, after losing its AFC package to CBS in 1997, reclaimed its share of the NFL broadcast rights. Its deal, worth an average of $650 million per year from 2006 to 2012, will give it the Sunday night package, as well as the Super Bowl and Pro Bowl in 2009 and 2012.