The Chilly Economics Of Super Bowl XLVIII

Tyler Durden's picture

Tickets to see this year's frigid battle between Seattle and Denver would have cost no more than $85 if they had kept pace with the government's perspective of inflation (CPI). If Super Bowl  tickets had tracked the S&P 500's reflationary trajectory, they would cost $275. Instead, in what is the biggest surge in face-value prices YoY ever - more than doubling last year's - the highest Super Bowl tickets this year cost $2,600 face value, a record high.

Source: Bloomberg

However, resale tickets – where the market really sets the price – tell a quite different (and more) negative story. 

As ConvergEx's Nick Colas notes, in the 48 hours prior to the weekend before Super Bowl XLVIII, the average price paid for a ticket was $2,505, which ranks as the cheapest since the 2010 game.  Prices have fallen fast, too, down almost $1,000 and more than 27% in just three days.  Meanwhile, current hotel and airfare inflation for the New York area isn’t even close to what New Orleans experienced last year.

Note from Nick: Is New York City “The best corner in the game” to host a Super Bowl?  You’d think so, given Gotham’s popularity as a tourist destination and first-class sporting venues in New Jersey to showcase the actual event.  And you’d be wrong.  This year’s game has less of the frenzied pricing for tickets, rooms and amenities compared to past events.  Beth’s been looking at Super Bowl economics for the last four years and has all the details here.
It was billed as the most expensive Super Bowl on record, but it isn’t.  Despite Costco selling trip packages starting at $14,000 for two people and the National Football League (NFL) jacking up its maximum face value ticket price by more than 100%, a Super Bowl experience is a relative bargain-buy this year.  And while it didn’t pan out to be the priciest on record, the 2014 showdown between the Denver Broncos and the Seattle Seahawks is indeed the “most amateur” in 32 years.  Peyton Manning is the only participant to have a Super Bowl ring; just three other Broncos have been to the game without winning; and no Seahawk has ever played for an NFL championship.  In other words, this year’s game showcases the fewest players with prior Super Bowl experience since 1982.

Which generally means both teams are really, really hungry for a win.  And coupled with the relative wealth of the New York City metro area, it wasn’t unrealistic to expect record high costs of attending the game.  Regardless, we analyze pricing surrounding the game every year, because in addition to being the most popular game in America’s most popular sport, the Super Bowl is also a useful case study in economics that allows us to gauge both the confidence of high-end consumers as well as the pricing of temporarily scarce resources.  The game occurs every year at roughly the same time, so this year’s data is comparable to other periods.  And obviously, the content is the same.  We summarize the costs of attending the 2014 edition below.

We’ll start with the ticket price to the game.  Getting into Super Bowl I in 1967 would have cost you $12, assuming you were lucky enough to pay face value to the NFL, which as we know today is no easy feat.  From there, stated ticket prices went to $50 in 1984, $100 in 1988 and $500 in 2003.  Today, the prices printed on the ticket for Super Bowl XLVIII in East Rutherford, NJ are between $500 and $2,600.  The NFL actually reduced the price of its cheapest ticket by $100 this year, but boosted the maximum price by 108% from last year’s $1,250.  The logic behind this huge price increase involves the population density of the Northeast, the probability for a greater number of fans driving to the game (saves money on airfare and rental cars) and the NFL’s desire to close the gap between resale and face value prices.


However, no one pays sticker price with the exception of very lucky lottery winners (roughly 30,000 entries for a chance at one of the one-thousand $500 seats), close friends and family of NFL players and coaches, and lucky season ticket holders for one of the two Super Bowl teams.  The “street price” always sets you back a bit more, but this less so this year than in recent years.  Resale prices started out high – $2,700 on average the Monday after the conference championship games – but fell fast and fell sharply.  As of January 24, with nine days to go before the Super Bowl, the cheapest price in the aftermarket was $1,779, which was $409 less than the same period a year ago and $809 less than in 2012.  By Monday, January 27 we found an upper-deck seat available for $1,242.


As for the cost of a plane ticket, it’s considerably higher than normal this weekend, though airfare inflation is nothing compared to what visitors to New Orleans experienced last year.  A nonstop, roundtrip flight from Denver to the New York area this weekend goes for about $480, compared with just $230 two weeks from now, or an increase of 196%.  Flights from Seattle to New York are available for $752 this weekend, versus $328 on a typical weekend, marking a 129% inflation rate.  Last year’s matchup between the Baltimore Ravens and the San Francisco 49ers in New Orleans resulted in airfare inflation of 335%.


The difference in hotel inflation this year is even starker.  The cheapest room still available within five miles of the Meadowlands is at the Knights Inn in South Hackensack, NJ; this 2-star accommodation is going for $133 a night, or 85% more than its usual nightly rate of $72.  For a more upscale experience, the Four Seasons in Manhattan has rooms available for $1,150 a night, or 82% more than the normal $633 nightly rate.  As of press time, there are plenty of rooms still available (ranging from 2- to 5-star options); last year though, the only choices this late in the game were 3-star hotels in the $2,600 to $2,700 range outside of downtown New Orleans.  Inflation there was as high as 1,645%.

Corporations, too, are getting somewhat of a break this year.  The cost of a 30-second ad stands at an exorbitant $4 million, but that’s flat from last year, when big companies faced a 14% markup from 2012.  Still, $4 million is tied for a record high, and the ad slots sold out months in advance of the game.  And as an indication of the relative importance of football versus baseball and basketball, Super Bowl ad sales generate more revenue than ALL of the World Series and the three game of March Madness Final weekend.

So what do we gather from all of this data?  At first glance, it would seem as though the mood of the high-end consumer is a little gloomier than in the past couple of years.  Resale ticket prices – where the market really sets the price – imply more about the economy than NFL-mandated pricing decisions, and this year’s aftermarket is quite soft and getting softer by the day.  And yes, the cost of traveling to New York City this weekend is more than double the norm, but it’s relatively “cheap” versus what New Orleans experienced last year.
To be sure, there are some noteworthy economic signals in the data, but a couple of distinct factors indicate that a lukewarm economy is note the sole reason for this year’s relatively soft pricing.  First, the abundant supply of hotel rooms in New York, as well as a total of three major airports in the area, means that resources for getting to the game aren’t as scarce as they are in most other cities in the country (i.e. New Orleans).  It’s basic economics – more supply equals less pricing power.  Also, East Rutherford was blanketed by over a foot of snow last week, and the current forecast for Super Bowl Sunday calls for a high of 38 degrees.  It’s really no surprise that a lot of people prefer to watch the game from the comfort of their own living room, especially with the super technologically-advanced TVs these days.
Luxury items are of course a good way to gauge the relative health of the upper middle to upper classes, though pricing a “Bucket list” item (such as the Super Bowl) is a bit harder than just luxury goods in general.  Next year’s game in is Glendale, AZ; it will be 73 and sunny on Sunday.  Since there is a Super Bowl every year, perhaps some people are waiting for a more climatically appealing destination before crossing this item off their bucket list.  True fans, however, will show up regardless of the conditions – they’re not in it for a fun vacation.  The NFL must have understood the pressure on pricing from a cold weather game, and its decision to hold the game in the Northeast in the dead of winter actually made the experience more affordable for diehard fans.  As a result, this year we’re uniquely able to isolate the value of the event to the true fan versus the event-driven bucket list person.  It is certainly enough to command a premium for tickets, airfare and lodging.  But we’ll likely have to wait for next year’s Super Bowl to have a reasonable economic comparison point to past warm weather games.

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Dewey Cheatum Howe's picture

It is not about price it is about showcasing the police state on a national scale...

Stockmonger's picture

This article had all of the tight logic and reasoning of a Krugman blog post.

NoDebt's picture

Not enough inflation.  Fire up the presses, Janet.

El Oregonian's picture

$1250.00 for a ticket to ignorance or, a 1 OZ. gold coin Buffalo. Hmmm?? Not even close... GIMME THE GOLD, BABY!!!!

RafterManFMJ's picture

Excellent point; a ticket to the Fascist Bowl or an oz. of Au?

Choose wisely.

Dick Buttkiss's picture

The question is when all the NFL stadiums are turned into FEMA-run Supper Bowls.

A Nanny Moose's picture

I think NOLA and Katrina summed it up nicely.

Oldwood's picture

Why is teh NFL not paying for all of the security, rather than the taxpayers? The general welfare my ass!

disabledvet's picture

It all stated when Edison invented his "light bulb." Been all downhill ever since.

"In the Darkness" (space) "there is light." And "in the light there is nothing but darkness."

Turn off the television...and the bulk of all other "media's."
We only go to sporting events because psychologists a century ago "determined" it the safest place for an "us" to exist.

Apparently they never went to Veteran's Stadium "back in the day."

Cornholiovanderbilt's picture

People are tired of the police state and NYC robbing America. I hope the non-profit NFL turns less of a profit than normal

I am Jobe's picture

Never underestimate the intelligence of the sheeples

logicalman's picture

Never estimate the intelligence of the sheeples - it's depressing.

RafterManFMJ's picture

Pretty sure you meant to say 'overestimate'.

Dewey Cheatum Howe's picture

The NFL must have understood the pressure on pricing from a cold weather game, and its decision to hold the game in the Northeast in the dead of winter actually made the experience more affordable for diehard fans.

I guess the author never heard of seasonal pricing on travel and lodging. Prices goes up when demand is expected because they can get away with it.  

Dewey Cheatum Howe's picture

His inflation argument differential is flawed for one reason more traffic in general flows through the New York for air traffic than New Orleans. That difference is reflected in how much the inflation is relative to each airport(s) in the area. The volume of traffic even with seasonally inflated prices allows for a lower overall inflated price in relation to out of season for the same airport(s). Well traveled routes or hubs are always cheaper flights in relation to when destinations than non ones.

The Axe's picture

P.T. Barnum was right.....

Panem et Circus's picture

If we could only get them swords or something and they could fight to the death. Or maybe they could execute political dissidents and religious minorities in there. Then we could make the tickets FREE, and give extra bread rations or something.

logicalman's picture

Could maybe raise money to save African lions, if a few inconvenient types were thrown to them.

Ignatius's picture

Pulling for the Seahawks though they've got their hands full today.

Line:  Denver -2.5

Overfed's picture

I too am pulling for the team from FEMA region X to defeat the team from FEMA region VIII in this 48th annual munus.

Overfed's picture

I'll probably miss most of the game. I have to go out and dormant-spray my fruit trees. Afterwards,  I think I'm gonna brew up a batch of beer.

greatbeard's picture

Screw the NFL.  Screw the Suberb Owl.  Screw TV.

Skateboarder's picture

greatbeard, I came up with a sweet rock'n'roll chorus in the shower just now:


"Green, it's what's for dinner
Greed, it makes the Soylent" (repeats circularly)

greatbeard's picture

Man, I don't want to get that tune stuck in my head.  I'm cynical enough.

rum_runner's picture

In summation, unless you're stupidly rich you're an idiot to pay these prices.  Espeically considering there is something like a total of 11 minutes of actual ball-in-motion time.  A fine game on TV, idiotic in a chilly bleacher.

FredFlintstone's picture

Add: unless you are a lobbyist angling for a government contract for a client.

Make_Mine_A_Double's picture

When Green Bay can't sell out a play off game at Lambeau (and it doesn't matter how the fuck cold it is) you know the NFL (tax exempt 501 no less) has reached the upper limit of what they can wring out of the common man.

For most it's a descretionary income purchase and everyone has had to throw certain things overboard - with the exception of the 1% of course.

GooseShtepping Moron's picture

The SWPL Boomers who have been buying most of the tickets and merchandise over the last 15 years are starting to feel the pinch. I think that huge influx of money was very destabilizing to the NFL. The rise of the whole suburban football culture (the fantasy leagues, the mainstreaming of NFL apparel, the 24/7 "Sportscenter" media) has been something I never understood. To me, it wrecked whatever semblance of respectability still remained in professional sports.

Kirk2NCC1701's picture

I'm pretty sure that the big hotels owned by the event organizers etc, will do well.  Especially for what is otherwise a poor Feb.

The League owners and their billionaire friends must all take turns raking in the money.  /s

GooseShtepping Moron's picture

I'm not even going to watch it on television. Couldn't care less.

logicalman's picture

My son was asked, last night, at work if he had any plans for the Superbowl.

He asked 'when is it?'

When he got home we got into a discussion about the insanity of such big sporting events.

Good thing Google was there so we could find out which teams were taking part!


hidingfromhelis's picture

Just finished up a late lunch, and I'm about to head back out into the woods.  No corporate welfare participation or support from me!

logicalman's picture

Can't beat being out in the woods - keeps me sane(ish)

jerry_theking_lawler's picture

I love partaking in the SB festivities. I love watching the game (even though I don't care who wins). I like watching the commercials (even though I do not partake in ANY purchases of this crap). It is an evening of free entertainment....

Makes me feel good that someone is spending millions upon millions for advertising....advertising that will have ZERO impact on me. (as I purchase local food...wear clothes until they are none function....and make my own hooch). I save my excess 'capital' for real asset purchases...primairly PMs. Now if there was a PM dealer commercial on here, then I would watch it and may pay attention.

Here's to helping the corporates in their ever approaching decline.

Withdrawn Sanction's picture

"When he got home we got into a discussion about the insanity of such big sporting events."

Good on both of you.  

In addition to ignoring the Stupor Bowl, not planning to watch a minute of the Olympics either...or should I say, the semi-pro athletic/political rah rah.  Frees up a lot of time to be productive.

merizobeach's picture

"He asked 'when is it?'"

That's funny, too, but I think I managed to miss the boat even a little more: reading the comments on this article, I realized that the super bowl was probably a few hours ago..

Super Bowl Monday is practically a holiday in Guam, but here in the 'Wan, I woke up today with no idea and haven't seen a football game in years.  I'd like to be out in the woods as well, but at least I don't have the clutter of these 'cultural' events in my mind anymore.

akak's picture

GSM, +1 for not caring about the StuporBowl, and another +1 for (properly) saying "couldn't care less".

logicalman's picture

couldn't - agree more.

Iam_Silverman's picture

Well, I could care less.  But I won't, since it would take more effort on my part.

Bárðarbunga's picture


Now you have to pay for the bread and the circuses.

cynicalskeptic's picture

You have to wonder how much longer it can last given that they're cutting back on the government sponsored bread (foodstamps and unemployment) .........


booboo's picture

Chas and Buffy ain't getting up and down in their seats, drinking beer from a bottle and pissing with the common man in stainless steel troughs for 2 large.

IridiumRebel's picture

New York sucks....I'm sorry. Even my wife, who didn't really want to leave, but under the auspices of furthering my education, moved cuz the costs of living in SW Ohio are far less than NY. She even is beginning to say, "Ok, I think I am liking this lifestyle better." People are right about the unveiling and forced acceptance of "the police state". I lived it in NY and watched it grow in scope. Every day brought new liberties lost. I voted with my feet. I am so much happier here. We are able to live off of much less, our commute is now mere minutes compared to hours on infrastructure that will continue to decline with more injury and death. The people there are quite nice for the most part, but you can feel the duress when they exclaim, "I love it here!" Remove yourself as I have and you understand all of the crap that comes along with living there. 40 million people in a condensed area from CT down to PA is simply too many. It's stressful. I don't want my little girls growing up in that shit storm. 

As for the Stupor Bowl and inflation. Why on God's green earth would I want to fight that crap, pay that money and go through that hassle for something I can watch at home for thousands less? I went to a game years ago for my birthday. We paid hundreds for a game between the Jets and the Chiefs. it was cool, but the game is better at home with our 80 inch NSATV's and cheap food with friends. Deflation awaits folks. These tickets are further signs of the decline of this once great nation. 

Seasmoke's picture

IR. You will never regret that move !!!

IridiumRebel's picture

I know you're from Jersey. I know you know.

RafterManFMJ's picture

IR, young grasshopper, you have traveled long but your journey is not yet complete; when you replace

"Why on God's green earth would I want to fight that crap, pay that money and go through that hassle for something I can watch at home for thousands less?

with, "Why would I watch a Fascist State Circus while my country burns? Can I not find anything better to do with my time?" then your journey nears it's end, peace at last.