America has changed a lot since Super Bowl 1 in 1967 but, as the cost of tickets, airfare, commercials, and beer have soared, real median incomes have risen just 9%... is it any wonder the 'people' are revolting.. towards Bernie and The Donald? However, the economics of Super Bowl 50 are every bit as cloudy as the general American economy... which looks set to be re-named "The Unicorn Bowl."
Distraction - Nearly 1 in 4 are watching just for the commercials...
No matter what - you better watch anyways, because the winner of the Super Bowl will determine if stocks are heading up or down in 2016.
Are you a Carolina Panthers fan? You might want to start buying stocks. Denver Broncos fan? Better start selling.
- A win by an original National Football League team—from the days when there was an NFL and an American Football League, before the 1966 merger pact—means the market will be up for the year.
- A win by a descendant of the AFL sends the market down.
- Teams created since the merger count for their conference, National or American.
But away from Wall Street, the American man's REAL median income has gone up by only 9% over the last 50 years, and, as The Burning Platform's Jim Quinn exclaims, that is using the blatantly fake CPI calculation. Using a true measure of inflation would reveal that men make less money today than they did in 1967. And the MSM & corrupt politicians wonder why so many people are so pissed off.
But, as ConvergEx's Nick Colas reports, looking at everything from aftermarket ticket prices to travel costs and ad spending shows that the economics of Super Bowl 50 are every bit as cloudy as the general American economy.
The “Get In” price to attend the game is currently $2,950 on Stubhub, down 11% from last year’s $3,300/seat. Average ticket prices are, however, higher at $6,007 versus $5,684 in 2015 (a 6% bump). The former is essentially “Bucket list inflation”, and lower prices signal a weaker mass-affluent consumer. Higher averages mean more high net worth/corporate interest in the Big Game, and that extends to ad prices and other expenditures. A 30-second ad costs $5 million, a new record and 11% higher than last year’s $4.5 million.
Lastly, that the Super Bowl is in San Francisco this year means you might as well call it the Unicorn Bowl. Uber reportedly paid at least $250,000 in sponsorship to get access to a remote parking lot to use on Sunday. No word on surge pricing, however.
“Old age and treachery beats youth and exuberance.” That’s an old saying on Wall Street, but it’s not transferring too well to the gridiron. ESPN reported today that Cam Newton is the current favorite in Las Vegas to win the Super Bowl 50 Most Valuable Player title. His odds sit at 5-7, versus Peyton Manning at 7-2. This is the first year Nevada sports books are allowing wagers on the winner of the MVP, and so far the crowd likes youth over experience.
Over the past 6 years we’ve looked at the Super Bowl as not just a marquis event in the American sporting calendar but also as a unique window into the country’s economic life as well. For many well-heeled football fans, getting to the “Big Game” is something of a bucket list item. That demand pushes up against the inherently limited supply of tickets, airplane seats, hotel rooms, and other amenities. On a larger scale, the Super Bowl regularly draws the largest TV audience of any event, sporting or otherwise – some 114 million people last year. In an increasingly fractured media world, that reach is ever more valuable.
What we found this year echoes the push-me-pull-you message of other, more standard, economic indicators. Here’s our list of Super Bowl indicators, with comparison points to prior years:
#1 – Ticket Prices. The face values of Super Bowl tickets are basically unchanged from last year, at $850-$1,800 in 2016 versus $800 - $1,900 in 2015. Only a fortunate few get to pay that price, however. The rest go to the ticket brokers.
There, it is a “Tale of Two Super Bowls”. For the bucket listers out there who just want to experience the game, the cheapest seats are less expensive now than last year. We found a ticket in Section 401 (upper tier) for $2,950 on Stubhub. That is less than $3,300 we logged as the “Get In” price last year. Prior year cheapest-available prices were: $1,242 (in New York, 2014), $1,769 (2013, New Orleans), and $2,000 (2012, Indianapolis).
In contrast, average ticket prices, which we assume are more heavily influenced by corporate spending and high net worth fans, are up. This year the mean price on Tiqiq is $6,007 versus $5,684/seat for the game last year in Arizona. Prior year averages were: $2,505 (2014), $3,398 (2013), and $4,000 (2012).
The upshot here seems straightforward: the average football fan/bucket lister seems a little more price sensitive this year, with Get in prices down about 11%. Corporates/more affluent fans who would like prime seating are willing to pay more – about 6% more – than last year.
#2 – Airfare. We always see price increases for airfare to the host Super Bowl city around the dates of the game. The only real question is “How much” relative to fares 2 weeks later when things return to normal.
Here, the story is generally better for the travelling football fan than in prior years. Wall Streeters who want to fly to San Francisco this weekend will pay $822 for a direct flight, or 2.7x more than the same journey in 2 weeks’ time. Charlotte fans will pay $1,197 for the same trip from their home town, or 2.3x more than two weeks from now. Both are less than the “Typical” Super Bowl market we’ve measured over the past 5 years at 2.9x. New Orleans 2013 was the worst Super Bowl for the fly-in fan, at 4.4x the normal rate. Bad news for Denver fans, however: flights to San Francisco are $892 this weekend but $186 in two weeks’ time. That 4.8x spread is the worst we’ve seen in 5 years for any participating city travel to the host venue.
#3 – Hotels. Since San Francisco is the home of Airbnb, you’d assume there would be loads of extra space for visiting fans and hotels would have no pricing power. Not so much… Press reports (see links below) quote locals as saying Airbnb asking rates are coming down this week. Hotels, by contrast, are holding the line. The Hilton Santa Clara wants $1,999/night for this weekend, up from $287/night in two weeks. If you are the bucket list plan, consider the Extended Stay America in downtown San Jose: $149/night, close to its 2-week-hence price of $119/night.
#4 – Ad Spending. While the consumer side of Super Bowl 50 is a mixed bag, the media story is fantastic. Thirty second spots cost $5 million, up from $4.5 million last year and $4 million the prior three years before. That breakout stems from the increasing popularity of the game, which last year had 114 million people tuning in.
#5 – The Unicorn Bowl. San Francisco hasn’t hosted a Super Bowl since 1985 when the game was held in the +60 year old Stanford University stadium. Now, the Valley is anxious to show the world, or at least +114 million Americans, that it can put on a great tech-enabled show. SAP developed an app for the 7,000 volunteers that will provide logistical support for the weekend. Google has a “Road to 50” app for visitors this weekend. Verizon is turning up the bandwidth on its local 4G LTE system. Even Super Bowl network CBS is getting in to the tech spirit, with a new camera system and (believe it or not) a new logo.
But perhaps the most telling signal is the price of something much more prosaic: parking. Every sports fan knows that securing a great parking spot – near an exit with easy access to a highway heading home – is the key to a first class experience. Uber, the ride sharing app, knows it too. That’s why they are paying somewhere between $250,000 and $500,000 to sponsor the Super Bowl Host Committee in return for access to a remote parking lot near the stadium. They will also have expedited service after the game.
No word on surge pricing, of course...
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And finally, in the interests of full disclosure - Go Broncos, Go Coach Knapp!!