Does your local restaurant advertise specials for Super Bowl Sunday? Maybe you made a bet with a friend on the winning team? Super Bowl is such a big event that it creates many opportunities for other unrelated businesses to make money. Sometimes it means other businesses will lose money.
If you watch Super Bowl at home, chances are you bought snack foods and things to drink from a local store. You just helped businesses in your neighborhood take advantage of Super Bowl externalities. In 2012, it was estimated that people in the United States spent $55 million on food and $237 million on drinks for the Super Bowl. How about betting? About $90 million in bets are placed for the Super Bowl, the biggest single-day-sports betting event of the year.
INTANGIBLE COSTS OR BENEFITS
What effect does a winning Super Bowl team have on the local economy? Some economists say it’s only about a $180 annual increase per person. But a win may provide intangible benefits. City workers feel increased city pride through a winning team and may work harder. Happy people spend more money, giving a small boost to the local economy. After a win, more people attend home games the following year, where their spending increases the city’s revenue, which in turn can benefit community-funded projects such as swimming pools and other resources for the community to enjoy.
Sometimes a win is a negative externality. During the 2013 parade through Baltimore, crowds were so huge that downtown businesses closed while others gave employees the day off. When businesses have to close, they can’t make money. If employees can’t get to work, the company still has to pay them. But there is an intangible benefit creating workers who are happy to celebrate at the parade.
Adam Vinatieri, a placekicker, has played in five Super Bowls Signing autographs for fans is part of being a good representative for the team.
“If you are a great player on a losing team, the chances for national endorsements are slim.
If you are a great player on a bad team in a small market, they are worse. Companies want winners!”
Jack Bechta, sports agent
Joe Flacco’s contract with the Ravens was up but he stalled contract talks until the season was done. That move worked in h favor. After his Super Bowl win in 2013, where he was also awarded the game’s M Valuable Player, he signed a contract with Baltimore for $120.6 million over six years.
A team’s highest paid players are usually quarterbacks. An NFL team has about three quarterbacks on a roster of 53 players. It’s an important position. Fans recognize quarterbacks more easily since they have their helmet off more than other players when they talk to the media. Consumers recognize quarterbacks as representing a team’s brand.
What a win! A Super Bowl win brings many benefits. In 2012, the NFL paid winning team players $88,000 each and losing team players $44,000 each for being in the Super Bowl game. Winners also get a Super Bowl ring. NFL players sign contracts, which are binding agreements between a team and player that guarantee what the player will be paid. A player who performs well in the Super Bowl, such as a game MVP (most valuable player) is seen as more valuable and can ask for and geta much higher salary. There’s no guarantee he’ll perform that well again, but a team values players who perform well.
A player who stands out in a Super Bowl becomes a familiar name to a mass audience, so he’s likely to get a bigger fan following. The more fans a player has, the more likely he is to get an endorsement contract. That’s when a well-known person promotes a product or service in an ad. But endorsement deals can be a risky investment for a company because, if the player suddenly becomes unpopular, it can reflect badly on the company.
A player with a lot of followers on social media can attract more fans to a game. More interaction with fans will increase interest in the player and the team he plays for, as well as in the NFL as a whole.
SUPER BOWL BENEFITS Photo Gallery
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