Why The Super Bowl Is Worth Billions Each Year

 The biggest football game  on American TV is upon us.The TV commercials are ready as broadcasters and sponsors will be waiting to cash in on the biggest sporting event in the U.S.

The NFL will reportedly pocket tens of millions for Sunday’s game, but for more accurate figures it’s better to look at the season as a whole. The NFL does not disclose the value of its contract with TV networks to broadcast regular season football games but it’s reported that networks such as CBS, Fox and NBC  pay around $3 billion a year collectively to do so,with a total of around $27 billion for the period 2013 to 2022. Each network gets the Super Bowl match to themselves three times over that period.

Of the three TV networks who alternate broadcasting the Super Bowl, CBS will show it this year. Total ad spend for pregame, in-game and post-game advertising during NBC’s Super Bowl broadcast last year was $482 million. CBS has broadcast the Big Game the most times and 2019 marks its 20th year, and its official line at a January 10 press conference was that it was 90 percent sold on ad spend.

The network might take close to half a billion dollars in advertising for just one football game, contributing heavily to the overall annual amount it pays the NFL for the right to broadcast.The Super Bowl is one of the most profitable pieces of programming for the network.

Stores are set to make $14.8 billion in sales around the game, with most of that money spent on food and drink to consume while watching, according to a survey carried out by Prosper Insights & Analytics for the National Retail Federation last week. That equates to $81.30 per person, up from last year’s $81.17. But, as fewer people say they will watch the Super Bowl in 2019, retailers will make slightly less than last year’s total of $15.3 billion.

Last year, the winners of the Super Bowl made an estimated $112,000 each while their opponents made $56,000 each. Referees, meanwhile, make between $4,000 and $10,000 a game, according to an estimate by analysts, and their annual salary is about $201,000.

If you look at annual figures, the New England Patriots are reported to be worth $3.8 billion, while their opponents, the Los Angeles Rams, are worth $3.2 billion, according to Forbes.

For Sunday’s game alone, members of the winning team will receive $118,000 each, per the NFL’s collective bargaining agreement. Players on the losing team will each receive $59,000.

But both the teams have already earned $83,000 per player in postseason play, meaning each winner could go home with a total of $201,000 and each loser with $142,000.The Super Bowl will be played at the Mercedes-Benz Stadium.The stadium, which opened in 2017 has raised close to $1 billion in sponsorship.

While the car company might not be able to directly track its sponsorship to sales, naming the stadium is more about generating “love” for the brand, according to Dan Conti, director of Sports & Live and a partner at media group Wavemaker, in an email to CNBC.

Fans should expect to pay between $4,000 and $6,000 for a ticket to watch the game in person this year, according to Scott Jablonski, general manager of NFL for ticket reseller StubHub. And at the time of writing, the NFL’s official hospitality partner was selling hotel and ticket packages for $5,645 per person when sharing a room.

Advertisers will be shelling out close to $500 million to air their commercials during the Super Bowl, but what returns can they expect? Measurement company iSpotTV, which tracked sales against ad spend in 2018, found that the cost per lead (CPL), or the amount of money spent to convert a viewer into a buyer was between $27 and $100, on the day of the game. But the CPL went down significantly after a fortnight, to $3.41 for one big game advertiser it tracked.For the last 45 years the Super Bowl has been a big deal and there are a lot of people familiar with how to monetize the event.”

Via CNBC

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