Posted by John Vrooman on Monday, February 1, 2016 in National Football League.

General Super Bowl Statement 2/2016:

Super Bowl profits

 The NFL post season is at best a break even financial proposition for the participating clubs. For all NFL post season games (including the SB) all of the gate and media revenue are divided evenly among 32 teams in league after modest deductions (probably about 15 percent of the gate) for game hosting and travel expenses.

 The home playoff team keeps only venue revenue (concessions and parking) and shares all of the gate with the League from which the NFL pays flat expense fee to the participating clubs (for hosting and travel costs) that increases as participating teams progress through the playoffs. The remaining revenue is then distributed evenly among clubs in the League.

 During the NFL regular season 34 percent of the gate revenue is shared and the home team keeps all of the venue revenue from concessions, club fees and parking. All of national media revenue is shared equally.

 The players receive post season bonuses that pale in comparison to their regular salaries. Players receive $25,000 per divisional round game; $46,000 for the NFC Championship game; and $151,000 for the SB winners and $102,000 for the SB losers. So each player on the winning SB club would receive $25,000 + $46,000 + $151,000 = $222,000 for playing in a series of 3 post season games that gross over $150 million.

The season ticket holders for either SB club only get 17.5 percent of the Levis Stadium tickets for each of their fan bases and the 49ers get 5 percent of the ducats. The remaining 60 percent goes to the rest of the league (35 percent) and league sponsors (25 percent). The super bowl is essentially a post season blow out bash for NFL friends and family and a financially losing proposition for the 2 participating clubs and negative-sum economic impact for the host city.

Even though the host city experiences a negligible if not negative net economic impact, the Super Bowl host team can usually turn a modest profit based on unshared venue revenues. Here are some estimates of the profitability of the last 7 SBs for the host Stadiums.

The external spread effects of the Super Bowl on the regional economies of the host sites is negligible if not negative sum because almost all of the economic gains are hermetically captured within the new luxury venues like Levis Stadium in Santa Clara. Most host cities experience modest if not zero-sum net economic benefit from hosting the Super Bowl because of local inflation, congestion and crowding out of other economic activity.

The realistic rule of thumb is to move the self-promotional impact estimates one decimal place to the left, and so a self-promoting $500 million impact estimate of a Super Bowl is more accurately less than $50 million by the time the smoke clears.

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Interview with Brazilian Financista.

Here are answers to your more specific questions:

1) What is the Superbowl economic impact? Does SB affect mostly the US? 

See above

2) How can SB affect San Francisco’s economy this year?

The SB is actually being played in Santa Clara which is a small satellite city in the South Bay. Most of the traffic will come through SF with almost no positive impact and mega congestion. Hotel and car rates will explode and crowd out most non-SB spending and occupancy rates in SF and Santa Clara will probably get nothing but the negative crowding and congestion.

Smaller Santa Clara will be blown away by the mega-event and could realistically never capture any economic gains that extend beyond its limited political jurisdiction. NFL teams prefer locations in suburban edge markets because the land is cheaper and the local political governments are easier to manipulate to their advantage. It doesn’t really matter where in a metropolitan area a club puts it stadium because of the extensive revenue sharing in the NFL.

3) If we had to list the sports events that most impact the economy, in which position would Superbowl be? Is it the #1 event?

Ironically the only real economic impact of the Super Bowl is the intangible social networking that occurs in local bars and pubs and Super Bowl parties. The commercial spots are usually just as entertaining as the game itself.

Outside of the US the big game is relatively meaningless. In terms of mega-events the SB probably ranks 4^th worldwide behind the Olympics, World Cup and any of the El Clasico matches between Spanish La Liga giants Barcelona and Real Madrid, in that order.

4) Are the economic projections related to Superbowl 50 similar to the last SB? What changed from 2015 to now?

The projections are probably the same $500 million to $700 million as were boasted for the last two in East Rutherford NJ and Glendale AZ. Both of the previous two SB were played in smaller suburban satellite cities that pay for the congestion of a mega-event and get almost nothing in return.

Remember the realistic rule of thumb would reduce the total net impact to $50 million to $70 million spread across the entire Bay area and Santa Clara will be left to clean up the mega-mess, just like Arlington TX (suburb of Dallas), Glendale AZ (suburb of Phoenix) and East Rutherford NJ (satellite of NYC) before her.

V