Final preparations for Super Bowl LVI between the Los Angeles Rams and Cincinnati Bengals in L.A. are wrapping up and other special events affiliated with the game will continue up until game time.
An all-star hip-hop lineup featuring Dr. Dre, Snoop Dogg, Eminem, Mary J. Blige and Kendrick Lamar will hit the stage for an 11- to 12-minute performance at halftime. That'll be preceded and followed by several clever commercials that will cost the game’s sponsors $6.5 million for each 30-second slot during the telecast.
Fans are shelling out thousands of dollars for seats. This will be, as always, the most expensive Super Bowl ever, no matter which side of the transaction you’re on.
But how much is this game actually worth? How much money does the Super Bowl make?
It depends entirely on who you are.
The National Football League has several sources of revenue from the Super Bowl.
Every year the NFL makes tens of millions of dollars in merchandise sales both leading up to and during the game. This is on top of the league’s branded partnerships, which typically take a central position during the Super Bowl. While the NFL does not release specific numbers on its partnerships, in the consulting firm IEG estimated that they were worth $1.8 billion, according to SportsPro.
Tickets will account for many million dollars’ more. While the NFL has not released details, SoFi Stadium in Los Angeles has a 70,000 seating capacity but can be expanded to 100,000 people. Standard ticket prices reportedly range from $950 to $6,200 (not counting the five-figure luxury boxes). Even at the lowest possible range that would value the tickets to this Super Bowl at $66.5 million in total.
This is enormous money -- but it pales compared with the value of the Super Bowl’s TV rights. Every year Fox, CBS (VIAB) - Get Viacom Inc. Class B Report (VIACA) - Get ViacomCBS Inc. Class A Report and NBC collectively pay the NFL $3 billion for the rights to broadcast the league’s games. This deal includes the rotating right for one of these three networks to host the Super Bowl. In 2021, CBS broadcast the game. This year NBC (CMCSA) - Get Comcast Corporation Class A Common Stock Report will do so.
The NFL in 2021 signed an 11-year media rights deal for about $110 billion with CBS, NBC, Fox (NWSA) - Get News Corporation Report (NWS) - Get News Corporation Report, ESPN (DIS) - Get The Walt Disney Company Report and Amazon (AMZN) - Get Amazon.com Inc. Report, which will begin in 2023, according to a New York Times report.
Networks pay so much money because broadcasting NFL games is worth so much money.
In the era of so-called cord cutting -- people leaving standard cable TV and subscribing to streaming -- live sports have increasingly become essential to the network television business model. It is one of the few forms of TV that viewers can be counted on to watch in a specific way at a specific time. As a result, ads for popular sports have become both more expensive and more important to the bottom line.
Nowhere is that more true than at the Super Bowl. CBS sold out all its Super Bowl LV advertising last year at $5.6 million for a 30-second slot, which reportedly generated $545 million, according to Reuters.
NBC has sold out its advertising for Super Bowl LVI mostly at $6.5 million for a 30-second spot, and some slots have been going as high as $7 million, Sports Illustrated reported.
The Super Bowl’s impact on a local economy is debated.
In the short term, business booms. Hotels raise their rates by anywhere from 50% to 300% during the weekend of the game, netting as much in a few days as they ordinarily might in a month. But bargains can be found on prices at Hotels.com, with rooms running as low as $247 at the Holly Crest Hotel – Los Angeles, 0.6 mile (1 km) from the stadium.
Airlines are a bit tougher on price. A round-trip flight on American Airlines from Cincinnati to Los Angeles for the weekend is now at least $817 if you leave on Saturday and return Monday. Most Sunday return tickets are sold out.
But someone has to pick up the tab. Events like a Super Bowl don’t come cheap, and moving the sheer volume of people and material needed for a game like this comes at a particularly high cost. Ordinarily that someone is the local taxpayer.
While the NFL is no longer a tax-exempt organization, it does conduct a competitive bidding process for the cities that want to host the Super Bowl. This tends to draw enormous interests from governments eager to draw in tens of thousands of high-spending tourists, but to do so they need to make very expensive concessions to the league.
In 2019, an investigation by the Atlanta Journal-Constitution found that the city’s successful bid for the Super Bowl cost Atlanta some $46 million. This came in the form of sales tax concessions, a hotel-motel tax designated for major events, reimbursement for any state or local taxes connected with the event, and $20 million pledged by local businesses.
This money comes on top of the additional expenses that a city takes on during a major event like the Super Bowl. Although through its tax breaks the NFL did not directly pay for Atlanta’s municipal services, those fire, police and medical personnel still had to keep the city running while serving a significantly larger, more centralized population than usual. A major influx of tourists costs the city additional money in maintenance manpower, public transportation and countless other local expenses that a tax-free event does not pay for.
This is not to say that the Super Bowl isn’t worth it. The most rosy projections of 2019’s event suggest that it brought in 10 times as much revenue as the city spent, making it a very worthwhile expense. It is, however, important to remember that all this revenue comes at a cost.
Around the Country
Then there’s the spending outside Los Angeles.
While most fans aren’t willing to drop thousands of dollars just to see the game, that doesn’t mean they’re not excited. According to the National Retail Federation, this year’s Super Bowl is expected to generate roughly $14.6 billion in spending nationwide. The average fan will spend about $79 on food, drinks, decorations and other merchandise to celebrate the game.
In large part this is driven by the fact that almost half of everyone watching the game plans to attend a Super Bowl party, and roughly 80% of them plan to buy at least some food and drinks.