The Super Bowl: How to Make $509.6 Million in a Single Day


I watched the Super Bowl wedged between my Serbian girlfriend and a diehard fan.

She wondered why the score goes up 6 points at a time. He argued that Texas high school football is the purest form of sport. I ate ribs. We were all enthralled. Not just by the game, but with the entirety of the experience — the sport, betting squares, commercials, Lady Gaga, overtime — all five hours of it.

The marketer in me wondered how the hell did the NFL get us to happily sit through hours of sponsorships and commercials?

The Super Bowl is truly a unique spectacle, even when compared to other great sporting events around the globe. Not only for its showcase of world class athletic prowess, but also for its world leading media savvy. This year, the Atlanta Falcons and New England Patriots set an unprecedented number of records on the field, 31 to be exact. Off the field, amazing feats of business prowess were also on display:

  • In a single day, Fox made an estimated $509.6 million in Super Bowl advertising and sponsorships1
  • In the final 8 minutes, a first ever Super Bowl overtime brought an extra $20 million in advertising revenue2
  • That's a total of $1.69 million per minute of total broadcast time
  • Advertisers paid $5.5 million for each 30-second Super Bowl ad slot, up 45% in 5 years2
  • Nevada saw its largest betting day in sportsbook history at $138.5 million, 40% increase in 5 years3

To put these numbers in perspective, NBC sold an estimated $1.2 billion in national advertising and sponsorships for the 2016 Rio Olympics.4 While that figure is quite impressive, its split over 19 days and 6,755 total hours of total programming.5

The Olympics are an incredibly complex and technically challenging broadcast. NBC had to manage a mix of terrestrial and cable TV channels, thousands of hours of online streams, dozens of presenters and correspondents, and hundreds of support staff. NBC reported a $250 million net profit from broadcasting the games, which it considers a huge windfall.

The Super Bowl made Fox over $500 million in just five hours.

US ad revenue by sporting event

I didn't truly appreciate the NFL's business performance until I compared it to other sports leagues. Its no secret that it leads American sports in terms of revenue. The NFL makes about $11.9 billion per season compared to MLB's close second $9.6 billion.6

This aggregate revenue number makes the MLB appear quite close to the NFL. However, when you consider that the MLB hosts 2,430 games in a regular season while the NFL just 256, a 10x gulf in revenue per game emerges. The NFL makes about $1.45 million per game, while the MLB just $132k.

US major sport league revenue

The NFL's dominance isn't limited to the North American market. It continues to stand out when compared to other major sports leagues around the world. When comparing the top 10 leagues in the world regardless of sport, North American leagues clearly dominate.

Worldwide revenue by league

One can argue this dominance is the result of a much less fragmented media market. The United States and Canada have a combined population of over 350 million who largely share the same language and cultural background. Compare this with the linguistic and cultural fragmentation in Europe, South America, and Asia. The architects of the EU will tell you: a common language and culture is good for business, and the US wins big in that respect.

The last graph I'll share is the most impressive. If you combine the revenue of the top 67 professional sports leagues in the world and sort it by sport, American football (NFL) comes in second only to Soccer (association football). With just 32 teams, the NFL generates almost half the revenue that the world's top soccer leagues do with a combined 762 teams.

Worldwide revenue by sport

Ok, I lied. I have one more graph to show you. While writing this article I realized that America has a unique division between professional and amateur leagues.

The NCAA, an association in charge of American collegiate sports, runs their own amateur leagues comprised of thousands of teams across dozens of sports. NCAA is only technically amateur because the athletes don't get paid. Unlike their amateur counterparts around the world, the NCAA routinely signs multi-billion dollar broadcasting agreements. The amateur status of these athletes is a highly controversial issue in itself.

Division I-A college football made $3.73 billion dollars.9 When we throw those revenue numbers into the mix, the gap between American football and professional soccer is surprisingly close.

Worldwide sport revenue with college football

Sports thrive in the American market for a number of reasons. American sports teams simply have less competition. Top soccer teams in Europe compete with teams in their home league, but also teams from other nations and leagues. Here we have a one league per sport monopoly.

Additionally, a shared language and culture helps create a larger media market — attracting more eyeballs and advertising dollars.

Conclusion
The NFL stands out from other American leagues because they turn every game into a spectacle.

People bemoan the breaks between football plays. However these breaks allow players to give a full effort every single play, giving us a more entertaining product. Unlike other sports, there's very little idle jogging or uninspired effort when the ball is live. Top basketball and soccer players routinely take plays off. A short season and fewer games also add a sense of rarity. Each game is sacred when your home team plays only 16 a year.

Above all, what makes the NFL a colossal business success is it's partnership with advertisers. An NFL game is the perfect vehicle for a national media campaign. The inherent rarity means higher viewership per game, while the natural breaks in action provide space for commercials. This creates a perfect storm for attracting national brands with big budgets — leading to more creative, funny, and provocative ads.

Unlike any other television event, the Super Bowl brings together Americans from all social-economic classes, cultural groups, and education levels. Some come for the game, some for the half-time show, others for the ribs. They all sit through the commercials though.

Looking forward, NFL revenues along with other live sports broadcasts will continue to grow at an even faster rate. The rise in popularity of Netflix, Youtube, and other streaming services means networks can no longer guarantee a growing audience for pre-recorded broadcasts. However, the experience of a live sporting event can't be replicated by streaming services just yet. Sports fans have little patience for low quality streams and traditional networks won't easily give up their lucrative sports broadcasting rights.

Advertisers looking for a national audience will increasingly shift budgets to live sports. Hopefully their commercials continue to get funnier.

References