Super Bowl $$$

As the NFL playoffs start next week, I thought it would be interesting to see how the economy is affected by the Super Bowl, both regionally and nationally. It turns out it is equally as harmful as it is helpful.

Just a few quick stats about the Super Bowl:

• 84 million Americans age 18+ plan to watch—that’s three-quarters of the adult population.
• Average ticket prices have surpassed $7,500.
• Advertisers are spending as much as $4.5 million for 30 seconds of airtime.
• More than $100 million will be wagered at Nevada sports books, and perhaps 40 times that will be gambled informally.
• Fans will devour 1.25 billion chicken wings and 27 million slices of pizza—the latter from Pizza Hut and Domino’s alone.

Last year's Super Bowl was expected to give the Glendale, Arizona region (where it was being played) a $500 million boost that it desperately needed. With increased tourism and an average ticket cost of over $7000, you'd think it'd be only pluses right? Maybe not. The last time Arizona hosted the Super Bowl, they lost over 1 million dollars. That might be due to upfront costs like security ( a couple million dollars) and then decreased attendance in local restaurants and attractions and such. That's not to say the nation won't rake in cash. Taxable ads (over $360 million) and not to mention the millionaires playing on the field won't escape taxation. All of the merchandise, game tickets, air and ground transportation, among many other things all contribute to the growing consumption plus the economy is getting.

But not all that glitters is gold.

Opportunity costs are major on Super Bowl Sunday. As I said earlier, restaurants are hit hard( drop 15%), but not nearly as hard as movie theaters (drop 66% in sales). People choose watching the game and ordering food as opposed to going out and eating and visiting places. The thing about the economic aspect is that when people pay for all of these things, they don't pay for them for a while after. This is like the holidays: you spend a lot then so you don't spend any after. There is a similar plummet in sales after the Super Bowl, although much smaller. Two concepts that hinder the economic prowess of this event are marginal value and marginal gain. 14.3 billion will be spent because of the Super Bowl, but that is only part of the $12 trillion that consumers well spend throughout the year, and only part of the $161 billion that usually takes place over that same 5 day period.

And consumption has very little to do with economic growth. Economic growth is all about saving money instead of spending it: investment.