Christina Heinritz
Insight AP Econ
Mrs. Straub
7 February 2016
Super Bowl Sunday
Plane tickets. Hotel payments. Stadium tickets. Concessions and commercials. There is no doubt that all of these goods and services in the product market bring in more revenue for firms during the famous Super Bowl Sunday. During this day, the consumer spending increases from the rightward shift in demand and leads to an increase in output. Opposed to the rest of the labor force, pizza delivery guys, Best Buy investors, hotels and airports tend to be the most successful individuals maintaining the madness of this busy nationwide “holiday” (“Pizza”). This proves that whoever is unemployed or has a job in a different company loses out on all the revenue they could have made (Cassidy), however the unemployment rate is not affected. This is because the Super Bowl only accounts for one day of the whole year so GDP and inflation aren’t affected by it. For example, “December [tends to] average 13 percent greater sales...But January is its mirror opposite, with sales 12 percent less than normal. Take the two months together and everything evens out,” (Cassidy).
Although the unemployment rate is not affected by the Super Bowl, frictional unemployment and structural unemployment still exist in the economy. For example, if a man was working at a company and chose to quit on the day of the Super Bowl because he wasn’t receiving any sales, that would be considered frictional unemployment---the hiring or firing of workers and the consistent rate of new workers entering the labor market. However, if this man was replaced by someone that could do his job better than he could, that would be considered structural unemployment because he would be lacking the necessary skills that someone else could perform more effectively and efficiently.
Another major component of the Super Bowl is its famous commercials that market the newest product, goods or services. According to Business Insider, the average cost of a 30 second ad during the football game is about $3 million dollars; this commercial price was, “almost equivalent to the size of German GDP [in 2011], the world’s fourth largest economy!” (Monitor). To put that in perspective, GDP is the total value of all goods and services produced in an economy during a given year.
All in all, the Super Bowl does indeed affect the economy, but only for a short period of time. As a matter of fact, it hardly changes the rate of inflation and the GDP because they are measured over the course of a year; although a major event, the Super Bowl only accounts for a few days of the 365 when in terms of the economy as a whole.
Works Cited
Cassidy, Mike. "The Super Bowl's Economic Impact." The Fiscal Times, 30 Jan. 2015. Web. 08 Feb. 2016.
"Pizza Fun Facts." Fun Facts. Pizza.com, 2016. Web. 08 Feb. 2016.
Monitor, Global. "Annualized Cost of Super Bowl Ad." Business Insider. Business Insider, Inc, 05 Feb. 2011. Web. 08 Feb. 2016.
The Super Bowl makes an insane amount of money, it's crazy. It has a huge impact on our economy and the GDP because of how much they bring in. And just knowing that they bring in 3 million per 30 second commercial is insane. Obviously everything that has to do with the super bowl is over priced, but it does a lot for our economy.
ReplyDeleteYour perspective from the Macro point-of-view is interesting, because you're right, it doesn't affect the economy in the long-run. If you were to look at the Superbowl in the Micro point-of-view, it would have a lot of fluctuation considering it rakes in all that money in a short amount of time. The commercials are the really interesting part of the Superbowl because of their entertainment value and expensive price, if every commercial was as costly as these ones, our GDP would be very high from the Macro perspective. Great job!
ReplyDeleteIt's crazy to think 3 million dollars can be lost in 30 seconds. This obviously brings a huge question as to whether or not investing in a Super Bowl commercial space is worth it. Some companies, like Budweiser, are almost expected to provide humorous commercials for the viewers' benefit. For these large companies, this advertisement is sure to work. I believe the smaller companies, those who wish to gain popularity from these advertisements, are not gaining much attention. Overall, nice job bringing statistics to sum up the long run economic impact of the Super Bowl.
ReplyDeleteI would check the fact about the German GDP. The fourth largest economy in the world has over 3 trillion dollars, not 3 million. Despite that, your post was interesting, because during the Super Bowl a majority of people are not worried about how the magnitude of the event hinders firms or individuals sales. When you put it into perspective though, you can only imagine how many customers are off in a different state for a football game instead of spending their money elsewhere. I think it would also be quite interesting to look at how much the economy grows in a Super bowl city, even after just one weekend. The hyped up fans bring in millions and millions of dollars, and the products around the city will see a raise in prices just because it is the Super Bowl. The economy of the entire country may not change, but for the city and/or state the economy will definitely be boosted.
ReplyDeleteAs Robert mentioned, I would check the validity of your facts and sources before making such claims, in this case they were far from correct. The connections you drew between the Super Bowl and unemployment were tangential at best, I would recommended discussing the relevance of the Super Bowl to cyclical unemployment instead. Also it would've been interesting to hear how the inventories of firms are affected by events such as the NFL Playoffs and how firms dispose of any inventory they accumulate which may have been made undesirable as a result of the out come of a game (All the Carolina Super Bowl Champions merchandise which would'be been produced in advanced of the game and held in firm inventories now has no demand as the Broncos won the game).
ReplyDeleteOverall your topic was interesting and the factually correct statements you made were intriguing as well, good job.
I believe you data was wrong when you were talking about the world's fourth largest GDP in 2011 to be only 3 million dollars. That seems to be a bit low, however it still shows just how expensive it is to have an advertisement shown during the Super Bowl. Also it would be interesting to see after the Super Bowl if these companies that bought these advertisements increased sales and if so, by how much? Overall I enjoyed reading this post and believe that you seemed to be very knowledgeable about the affects of the Super Bowl on GDP as a whole.
ReplyDeleteI believe you data was wrong when you were talking about the world's fourth largest GDP in 2011 to be only 3 million dollars. That seems to be a bit low, however it still shows just how expensive it is to have an advertisement shown during the Super Bowl. Also it would be interesting to see after the Super Bowl if these companies that bought these advertisements increased sales and if so, by how much? Overall I enjoyed reading this post and believe that you seemed to be very knowledgeable about the affects of the Super Bowl on GDP as a whole.
ReplyDeleteThe Superbowl, and its affect on GDP, are a perfect example of economic upturns within the business cycle because output and employment increase a result of this major event in sports. Output increases to meet the aggregate consumer demand, as you hinted towards. And I would argue that the Superbowl eliminates some frictional unemployment. But it is important to keep in mind that this is a short-run affect, contributing to the overall increase in GDP overtime, not accounting for the downturn after the Superbowl and until the next "holiday". You did a great job connecting a current event to Macroeconomics!
ReplyDeleteThe Superbowl is famous for its commercials. Even if your team isn't playing, chances are you'll watch the game just for the commercials or the half time show. The rise in consumer awareness of products from the commercials allows for an increase in consumer spending on these products. This means the savings of consumers would decrease as they spend more on products. The increase in consumer spending allows for an increase in production which allows firms to increase production to meet the consumer demand. This time of year is the most important for marketing national products for the entire nation to see. The firms will see a increase in production, but they must prepare for the decrease after the commercials have become common and not as exciting.
ReplyDeleteThe anticipation of the Super Bowl get tons of people revved up, for not only the game but also the commercials. Most just watch the Super bowl for the commercials and the halftime show. With the millions of people watching the consumers become more aware with the products advertised and then their spending on their products. With the increased amount of consumer spending it allows for an increase of production. Around this time of year companies are making consumers more aware of their products which in return will increase the consumer spending on their products which will lead them to have a greater amount of production.
ReplyDeleteIt's amazing how much goes on around the Super Bowl. Tickets alone were at the lowest $4,000 so think of how much people spent. Between the tickets, airfare, sky high hotel prices along with a $7 water bottle at the game. Prices become real high all around just for one event. Then add on the millions for commercials and players salaries. Think of how much money is involved in the Super Bowl. On a side note: I'm so glad Manning won another Super Bowl instead of watching Cam Newton brag about his first.
ReplyDeleteNo doubt, the Super Bowl has been a major part in sporting history. As discussed, it also has a impact on the US economy during its couple hour time spand. To just show the importance of this game, companies are willing to spend about $200,000 a SECOND for a commercial, during the Super Bowl! If consumers would consume as much as they do before, during and after the Super Bowl, the United State economy which be much different than it is today. In the future, I don't see the demand decreasing for football. Overall, interesting topic and good job!
ReplyDeleteThis post was very informative, I did not realize that commercials were so pricey! I agree that the Super Bowl is only contributing to short run economic growth but I think you didn't really emphasize enough the economic contribution of the event. Even though it's only a one day deal, the amount of money being made is incredible. Consumers are paying between $1000-$2000 for a ticket in some cases, plus airfare, hotels, food and beverage, apparel. Plus the commercials being shown! I wonder how much revenue the Super Bowl contributes to the economy overall?
ReplyDeleteSuper Bowl Sunday is one of the most profitable days in America. Because of the costs associated with the big game, tickets being about $4,000 for nosebleeds, and companies having to pay $4.5 million dollars for 30 seconds, the Super Bowl pulls in a boatload of money. A soda at the game was $10 and a hot dog was $8, so the prices for everything goes up, not just tickets. The amount of revenue the teams playing in the big game get from all the apparel being bought also has a big impact on the economy. Many football fans, even if their team is not in the game still attend to watch it and be a part of history. Even the fans watching at home go out and buy snacks and pizza for the game, helping the economy out further. I wonder if the companies that bought time for a commercial on Super Bowl Sunday if their sale increased and if so how much? $4.5 million dollars is a lot to put into an advertisement, so the sales they get would need to be high for so many companies to want the commercial time at that expensive of a rate.
ReplyDeleteI agree with you about the short term impact the super bowl has on the economy, I would argue that it mainly affects the host cities economy more than anything else. I disagree with you about the fact that the worlds fourth largest economy has a GDP of only 3 million dollars. That seems very very low for a whole nation. The price for a 30 second commercial shows how popular the super bowl is though, even though it costs 3 million dollars for a 30 second commercial. That commercial is viewed by 111.9 million people on TV, so it seems like it would be worth it for the company to spend that much money on a commercial.
ReplyDeleteWhen looking at how much revenue the Super Bowl brings in it's insane. During the weekend that it happens almost everywhere benefits, from restaurant's to hotels and much more. And that doesn't even discuss what the game itself brings to the economy with the crazy ticket price along with the big name companies paying millions for seconds of time on the t.v during the big game. There's no way that less people stop wanting to see this big event in the future. To the essay alone, intriguing topic and great points!
ReplyDeleteOften times, you hear about many people watching the super bowl, even if it's not "their team" playing in it. You made a many good points with this post, and it is very accurate, and there are some things that I can even verify, working at Walmart. One of those would be the large number of sales made in December, then how few there are in January. The drop of sales is noticeable, but like you said, the high number of sales in December helps to even that out. There is one thing though that was left out: security. Most years there is upwards of one million dollars spent on just security guards, and police to just keep the crowd from being rowdy the best they can. This year though, with all of the mass shootings and bombings going on, security was the highest it has ever been. Thousands of officers were patrolling the stadium, not to mention the snipers, helicopters and swat teams that were all on stand by. Overall, this writing was very good, and you got the point across very well.
ReplyDeleteIt's crazy to realize how much of a impact the Superbowl really has. Also the amount of money for just a ticket. This was very informative like said above and I did also not realize how pricey the commercials were. It makes sense though if you think about it millions of people are going to see it. I don't see really all the points you made though with the Superbowl contributing a lot to the short run economic growth, but I do agree how you looked at the perspective from the Macro point-of-view because you're right,it doesn't affect the economy in the long-run like aid above but in the short run. I do think that the commercials that are put on TV gets the most income after being showed this because even if you are not watching the game because you really care (me) you will still watch the commercials, which means their market will go sky rising.
ReplyDeleteI think you connected economics to a popular and relevant topic, the Super Bowl, really well. Wherever the Super Bowl is held is sure to gain a lot of revenue in their hotels, restaurants and the workers at the actual stadium. Also, merchandise for the competing teams is in higher demand, so stores selling that merchandise will increase revenue as well. Not to mention the TV stations who get paid tons of money to air commercials. Overall, I think it would be interesting to see how effective Super Bowl commercials are to the companies, compared to how successful their commercials on normal days are.
ReplyDeleteI believe this piece did well to relating to macroeconomics. It was very well connected when explaining the different forms of unemployment by giving different scenarios. I am surprised at how low the German GDP in 2011 was because compared to the U.S. (or even a SuperBowl commercial) is quite low. It was also good incorporating some microeconomics also when describing that consumer spending increases the demand curve. Very well articulated paragraph overall.
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ReplyDeleteLeading up to the Superbowl, thousands of products are made for this nation-wide event; Super Bowl 50 T-shirts, signs, football, etc., are all produced for this one huge event, creating a large boost in our economy. However, I agree with you that most of these purchases will be made the day of or shortly before or after the big game, making it a very short spike in revenue and sales. Overall, I thought you did a great job incorporating tons of vocab words in this piece, as well as effectively explained how they contributed the effect on the country's overall GDP.
Super Bowl Sunday is one of the most highly anticipated days of the year for Americans. Many people are awaiting this day anxiously, buying things to prepare for a party, etc. Since it was one of the most watched programs during the year, I am not surprised that it costs so much for a commercial to be played during it. Although unemployment rate is not affected, I believe that jobs are still being provided this day because some people may be hired just for the day. All in all, I found this post to be very interesting and it was great how you connected the Super Bowl to economics. In order to make this better, you could have showed how it may be expensive to run a commercial during this time, but it could increase the revenue for the company.
ReplyDeleteIt really is crazy how big of an impact the Super Bowl make. It has a huge impact on our economy and the GDP because of how much Revenue is generated during a single night and leading up to it. It would be interesting to see the average returns companies see after airing a 30 second commercial to see if it really is worth it. Obviously everything that has to do with the super bowl is over priced, but it does a lot for our economy and I'm sure had many trickle down effects.
ReplyDeleteWhen looking at how much revenue the Super Bowl brings in it's a truly crazy amount. The amount people pay to get there commercials in the super bowl is absolutely bonkers.
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