Press "Enter" to skip to content

The Spending Bowl

Lars Leimkühler looks into the ritual consumption that surrounds Americas favourite holiday.

Super Bowl LII has been record-breaking in many regards as both teams accounted for 1,151 total offensive yards in a wildly entertaining shootout where the Philadelphia Eagles clinched a 41-33 victory against the New England Patriots. However, off the field, even more records have been broken: 30 second commercials were sold with a price tag north of $5m which represents an 87% increase over the last decade. Additionally, the number of allocated advertisement spots has increased from 81 in 2008 to 98 this year. Combined, those two factors result in more revenue…, a lot more revenue! Overall, total spending on in-game spots amounts to a gargantuan $414m compared to the 2008 Super Bowl with $209m in ad revenue.

Whilst considering those statistics which just form the tip of the iceberg of the NFL’s commercialisation in recent years, uninvolved spectators might think that this year’s Super Bowl was a huge success. Nonetheless, NFL ratings have suffered throughout the whole year due to national anthem protests and a general decline in ratings on cable and broadcast. As a result, Super Bowl ratings hit a seven-year low and television viewership decreased to a mediocre 103m from last year’s 111m. Many fans are annoyed by the extensive advertisements during games. In the case of Super Bowl 52, this meant 49 minutes and 35 seconds of draining commercials accounting for 22% of total broadcasting time – the third highest in Super Bowl history. In light of recent developments, many fans have criticised the NFL’s commercialisation and wished for the ‘glorious old days of plain football broadcasting’ as stated by an elderly man near US Bank Stadium, Minneapolis.

Not Just A Game
Unfortunately, it is too late for such anachronistic thoughts. In today’s world, the Super Bowl has moved far beyond its origins as a sporting event. Instead, since the 1990s the Super Bowl has become a globally televised, all-encompassing entertainment program featuring funny adverts and a flashy halftime-show designed to please every potential audience. This trend is exemplified by a YouGov study in 2016 which asked people about their preferred part of the Super Bowl. Therein, only 47% of respondents indicated they would watch the event for the game itself, while the other half would watch because of commercials (35%), the halftime-show (12%) or other reasons (6%). Among millennials, Super Bowl commercials were actually the most popular reason for watching the game.

Those statistics serve the purpose of highlighting the Super Bowl’s true being: an impressive, well-oiled commercial machine with extremely important implications – especially on an economic level. Thus, it is worth taking a closer look at some of the outcomes of the Super Bowl’s commercialisation.

The average American spent over $81 on match day for food, beverages, decorations and team apparel. Overall, national spending on the Super Bowl adds up to a whopping $15.3 billion in total. Of course, this number marks a significant contribution to the US economy and provides many companies with important revenue streams. Nevertheless, the event’s contribution to social welfare is likely to be much lower than the numbers suggest due to some nasty habits which come along with the Super Bowl.

First of all, the average adult consumer spends an incredible $44 on alcohol which is considered to be a demerit good. Hence, economists regard its consumption as socially undesirable due to its negative health effect on consumers which will cause a higher burden for the health care system in the long run. Speaking of demerit goods, Americans place bets worth almost $5bn on the game. Additionally, the average consumer spends close to $30 on fizzy drinks and junk food like Pizza and Chicken Wings. Suddenly, those spending numbers don’t sound so great anymore.
Considering the type of products advertised during the Super Bowl, these unhealthy habits are actually enhanced. Auto manufactures had the biggest presence of all categories, accounting for 9 minutes of ad time, but were closely followed by producers of alcoholic beverages. Moreover, soft drinks like Coke, Pepsi and Mountain Dew and snacks such as Pringles, Doritos and M&Ms were heavily advertised. Most of what those products have in common is that they are certainly not great for the consumer’s health. Unfortunately, the goods that are most widely advertised tend to create the least social welfare. Certainly not a great combination!

Economic Value — Anything But Super
Now, let’s consider some more economic concepts and watch those impressive Super Bowl numbers deflate faster than a New England football. Although Americans spend approximately $15bn per year on their Super Bowl plans, the event displaces other activities and thus comes with an opportunity cost. Only 5.5% of Americans are expected to watch the big game in a restaurant or bar and the total number of guests during Super Bowl day is usually half the normal rate – representing a loss of approximately $367m for restaurant owners. But other industries are hit as well: In 2016, box office sales plummeted by 66%, causing a loss of $39m to theatre operators. If one considers that movies account for roughly a seventh of household entertainment spending, this implies a loss of further $273m. Overall, it’s a bad day for every business which is not involved in watching football from your couch.

Then again, it is only one day, which is concept number three: intertemporal substitution. The Super Bowl undoubtedly alters consumption patterns, concentrating a lot of spending in a single event. But does it change the volume of our spending? Unfortunately, money is a finite good for most consumers, thus forcing most of us to save after a big feast like Christmas or the Super Bowl. What goes up must eventually come down.

The aftermath of the Super Bowl does not only have negative effects on the demand side, but also on the supply side of the economy: A study from Challenger, Gray & Christmas, Inc. estimated that the Super Bowl would cost US employers approximately $3bn in lost productivity. This number was mainly calculated from the lost productivity of 17m workers who planned to skip work the following Monday and a estimation from researches that claims that the average worker comes in an hour late or wastes an hour during work the next working day.

Do the negative effects of the Super Bowl outweigh its contribution to the economy? Probably not! Should there be government intervention? Again, probably not! After all, experts estimate that the Super Bowl makes a ten-figure contribution to US GDP. Thus, it would be vastly superfluous to pretend to be Colin Kaepernick 2.0 and call for a boycott of Super Bowl LIII, thereby giving in to those nasty rumours in your head about the sometimes extensive consumerism surrounding the Super Bowl. Instead, maybe think twice about buying that third pitcher at Teviot or getting that 2 for 1 Pizza deal at Domino’s although you can actually just eat one. In the end, those marginal efforts add up.

Be First to Comment

Leave a Reply

Your email address will not be published. Required fields are marked *

%d bloggers like this: