The Super Bowl is more than just a game—it’s a cultural moment each year. And even better, there are a number of fascinating economic lessons we can learn. Today we dive into four aspects of the Super Bowl’s economics: ticket prices, the financial effect on host cities, the cost of advertising, and the infamous "Super Bowl hangover."
The Sky-High Cost of Super Bowl Tickets
Attending the Super Bowl is a dream for many fans, but it’s an expensive one. Last year, the average price to attend the game was an astonishing $8,600. This year, even the cheapest seat on resale platforms like StubHub costs over $5,000 after fees. These prices dwarf those of other major events, including concerts by global superstars like Taylor Swift, where tickets for some of the least desirable seats might go for around $1,000.
So, why are Super Bowl tickets so expensive? The answer lies in the intersection of limited supply and massive demand. The Super Bowl is a singular event, offering a unique cultural and sporting experience that fans are willing to pay a premium for. Unless you have connections that can get you discounted tickets, attending the game requires a significant financial commitment.
Host City Economics: Reality vs. Hype
When a city is chosen to host the Super Bowl, there’s often a flurry of headlines touting a massive economic windfall. Reports frequently claim that the event generates as much as $1 billion for the host city. However, many economists, including myself, are skeptical of these figures.
The real economic impact is likely far smaller. Credible studies estimate that the true number is closer to $150 million—still significant, but a far cry from the lofty $1 billion figure often cited. There are several reasons for the large discrepancy.
First, a large portion of the spending during Super Bowl week doesn’t stay in the local economy. For instance, if visitors stay at a major hotel, much of that money goes to the corporation rather than the local area. Additionally, the influx of visitors often displaces other events that would have taken place during the same time. Conventions and business meetings, which are typically held in major cities, may relocate to avoid the chaos and inflated costs associated with the Super Bowl. These substitutions dampen the net economic gain for the host city. There are other reasons as well, and when combined together the economic impact is much lower that what is publicly cited.
The High Stakes of Super Bowl Advertising
Super Bowl ads are legendary, often as memorable as the game itself. But creating these iconic commercials comes at a hefty price. Last year, a 30-second ad slot cost $7 million, and prices for this year’s game are expected to be even higher. Remarkably, all ad slots were sold out by August 2024, six months before the game.
Why are companies willing to pay such exorbitant rates? The Super Bowl offers unparalleled exposure, with over 100 million viewers tuning in. Beyond the immediate eyeballs, Super Bowl ads generate significant buzz. Companies benefit not only from the initial airing but also from the discussions and rankings of the best commercials that follow. This extended reach helps firms justify the steep cost of entry, as the value of the marketing extends far beyond the 30 seconds during the game.
The "Super Bowl Hangover"
The economic effects of the Super Bowl don’t end on Sunday. The day after the game, "Super Bowl Monday," is notorious for reduced productivity in the U.S. workforce. Studies estimate that around 16 million Americans miss part or all of work that day. Even schools aren’t immune; some districts have started canceling classes on the Monday after the Super Bowl to account for widespread absenteeism.
The reasons are clear. With the game’s late-night finish and people imbibing at parties, many people are either too tired, too distracted, or too hungover to work efficiently the next day. For businesses and organizations, the short-term disruption to productivity is a problem.