Super Bowl

Topics: Super Bowl, National Football League, Super Bowl XLIII Pages: 19 (7074 words) Published: April 1, 2013
Working Paper Series, Paper No. 10-01

Economics of the Super Bowl
Victor Matheson†

January 2010

Abstract The Super Bowl is America’s premier sporting event. This paper details basic economic facts about the game and examines the controversy surrounding the purported economic impact of the game on host communities. While the league and sports boosters claim that the game brings up to a $500 million economic impact to host cities, a review of the literature suggests that the true economic impact is a fraction of this amount.

JEL Classification Codes: L83

Key Words: sports, stadiums, Super Bowl, impact analysis, football

Department of Economics, Box 157A, College of the Holy Cross, Worcester, MA 01610-2395 USA, 508-793-2649 (phone), 508-793-3708 (fax), vmatheso@holycross.edu



Introduction The Super Bowl, the season-ending championship game of the National Football League, is by most measures the most significant annual sporting event in the United States. The game routinely attracts a sellout audience willing to pay top dollar for seats. In 2008, the face value for a typical Super Bowl ticket averaged $700, and ticket scalpers could expect to receive many times that figure in the secondary market. Table 1 shows the average price for a Super Bowl ticket sold on StubHub, a large secondary market dealer, between 2003 and 2009. The Super Bowl‟s television viewing numbers are even more astounding. The Super Bowl is far and away the most watched television program in the United States every year. For example, 19 of the 40 most watched programs in U.S. television history are Super Bowls, and more recently, the last 10 Super Bowls are the 10 most watched programs of the past decade. Between 2000 and 2009, the average Super Bowl attracted just over 90 million viewers in the United States. By way of comparison, over the same period the National Basketball Association (NBA) finals drew 14.3 million per game, the World Series attracted an audience of just under 19 million per game, and the National Hockey League‟s (NHL) Stanley Cup drew a paltry 4.1 million viewers per game. The Super Bowl‟s television ratings also dwarf non-sports programming. The Academy Awards drew an average of 39.7 million viewers over the same time period, and even the top-rated non-football program of the entire decade, the series finale of Friends, attracted only 52.5 million fans, barely half that of the typical Super Bowl. See Table 2 for a comparison of television ratings for various sporting and non-sporting events. Of course, sky-high television ratings also mean sky-high advertising revenues. A 30second television spot during the Super Bowl is the single most valuable piece of real estate in all 1

of American broadcast television. In 2009, a 30-second commercial during the Super Bowl sold for $3.0 million, an 11% increase over the previous year despite the turmoil affecting the national economy. As shown in Table 3, advertising rates at the Super Bowl have experienced a rapid increase over the past two decades, far outpacing inflation as well as advertising rates for other major television events.

Economic Impact of the Super Bowl While the spectacle of the big game may be of the greatest interest to the media, marketing experts, and the general public, the economic impact of the Super Bowl on host cities has attracted the most interest from academic economists. Unlike championships in the NBA, NHL, and MLB, the Super Bowl takes place in a neutral site rather than being hosted by the participating teams. Furthermore, unlike the major bowl games played in college football, the location of the game changes from year to year. In this sense, the Super Bowl is most similar to major international competitions such as the Olympics or World Cup. The Union of European Football Association‟s (UEFA) annual Champions League final, arguably the biggest annual single day sporting event in Europe, also plays at rotating neutral sites in...

References: Advertising Age (2009). Super Bowl 2007 - Advertising History: 40 Years of Prices and Audience. http://adage.com/SuperBowlBuyers/superbowlhistory07.html; accessed November 15, 2009. Baade, Robert, Robert Baumann and Victor Matheson (2008). Selling the Game: Estimating the Economic Impact of Professional Sports through Taxable Sales. Southern Economic Journal, 74: 794-810. Baade, Robert and Victor Matheson (2000). An Assessment of the Economic Impact of the American Football Championship, the Super Bowl, on Host Communities. Reflets et Perspectives, 30: 35-46. Baade, Robert and Victor Matheson (2006a). Padding Required: Assessing the Economic Impact of the Super Bowl. European Sports Management Quarterly, 6: 353-374. Baade, Robert and Victor Matheson (2006b). Have Public Finance Principles Been Shut Out in Financing New Stadiums for the NFL? Public Finance and Management, 6: 284-320. Coates, Dennis (2006). The tax benefits of hosting the Super Bowl and the MLB All-Star Game: the Houston experience. International Journal of Sport Finance, 1. Coates, Dennis and Craig A. Depken, II (2006). Mega-Events: Is the Texas-Baylor game to Waco what the Super Bowl is to Houston? International Association of Sports Economists, Working Paper Series, 06-06. Coates, Dennis and Brad Humphreys (2002). The Economic Impact of Post-Season Play in Professional Sports. Journal of Sports Economics, 3: 291-299. Davis, Michael C. and Christian M. End (2009). A Winning Proposition: The Economic Impact 25
of Successful National Football League Franchises. Economic Inquiry, in press. Donovan, John (2005). From downtown? Jax 's urban sprawl makes for Super tough week. Sports Illustrated online, http://sportsillustrated.cnn.com/2005/writers/john_donovan/02/04/scene.jacksonville/; posted February 4, 2005; accessed November 15, 2009. Humphreys, Jeffery (1994). The Economic Impact of Hosting Super Bowl XXVIII on Georgia. Georgia Business and Economic Conditions, May-June, 18-21. Matheson, Victor (2005). Contrary Evidence on the Economic Effect of the Super Bowl on the Victorious City. Journal of Sports Economics, 6: 420-428. Matheson, Victor (2009). Economic Multipliers and Mega-Event Analysis. International Journal of Sport Finance, 4: 63-70. National Football League (1999). Super Bowl XXXII generates $396 million for South Florida. NFL Report, 58. Porter, Philip (1999). Mega-Sports Events as Municipal Investments: A Critique of Impact Analysis. In Fizel, J., Gustafson, E. & Hadley, L. Sports Economics: Current Research. Westport, CT: Praeger Press. Rovell, Darren (2008). Super Bowl Tickets: What They Could Cost This Year. CNBC.com. http://www.cnbc.com/id/22647777; posted January 14, 2008; accessed November 15, 2009. Steeg, Jim (1999). Inquiring Minds Should Know. Fox Sports Biz online; posted November 9, 1999.
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Tampa Bay Super Bowl Host Committee (2009). FAQs. http://tampabaysuperbowl.com/faqs.htm; accessed December 1, 2009. TNS Media Intelligence (2009). TNS Media Intelligence Reports Academy Awards Spending Reached $691 Million. TNS Media Intelligence online. http://www.tns-mi.com/news/02112009.htm; posted February 11, 2009; accessed November 30, 2009. TVbythenumbers (2009). Various pages, accessed November 15, 2009. W.P. Carey Business School (2008). Economic Impact Study: Phoenix Scores Big with Super Bowl XLII. http://knowledge.wpcarey.asu.edu/article.cfm?articleid=1597; posted April 23, 2008; accessed November 30, 2009.
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