The NFL is preparing to put on its biggest show of the season in a week’s time. Super Bowl LIV is set to kick off at 6:30 PM EST on Sunday, February 2, 2020 as the San Francisco 49ers and Kansas City Chiefs will do battle to be declared the league’s champion. One of the highlights of Super Bowl viewing isn’t what takes place on the field, but what happens when the game isn’t being played. Commercials have become not only a highlight of the big game, but an institution that keeps viewers glued to their television after the whistle blows. The post game commentary and media is not just about the game, it’s about what company nailed it with their Super Bowl commercial. Those companies that are prepared to let their best work air are about to be holding their breathe because if their commercial flops they will have wasted a large amount of money.
First, let’s take a look at the Super Bowl as a business when it comes to ad revenue. Dating back to 2003, advertising generated roughly $130 million during the Super Bowl. Minus a few down years that number has consistently grown over the next 16 years. “Grown” might be an understatement because 14-years later in 2017 that number ballooned to an all-time high of $390 million – 3x the number from 2013. Interestingly, after 2017 the number dropped in 2018 and 2019. There are a variety of reasons why this may be the case – one of which is TV ratings. It should come as no surprise that the ad revenue dipped the two years after 2017 and the TV audience was the lowest it has been in a decade. Important to note that the teams playing in the Super Bowl don’t have as big of an affect on this number as you’d predict – that includes the market size of the respective teams as well. This year the NFL figures to see a big rebound because the early feedback regarding commercial inventory has been strong.
It’s no secret that a 30-second commercial during the Super Bowl costs a fortune, but just how much do they cost this year? This year is interesting because its the first time Fox Sports (who will be airing the big game) sold out all of its available commercial inventory weeks before the Super Bowl. In fact, there are several companies who weren’t prepared with their commercial or were being a bit indecisive that had to be slotted to the pre- and post-game commercial inventory. One of the reason there was increased demand this year was because there was less supply. Historically, there have been 5 ad breaks during a given quarter of the big game. This year there will only be four breaks making for less commercials, increased demand invariably means a higher price. This year a 30-second slot will cost advertisers $5.6 million. In 2019, the commercial inventory did not sell out and the network had to scramble to fill slots right up until the game. That year the price per commercial was still around $5 million. This year with everything sold out, companies are getting bumped to before and after the game. Cost-wise, the pre- and post-game slots run between $2 and $3 million per slot. To put all of this in perspective – this year’s main commercial inventory cost is up 107% increase in cost from 10 years ago.
The NFL makes a fortune from its TV network contracts. It is estimated that they earn over $3 billion annually from its respective partners. The league does not disclose exact numbers, but Fox itself has paid handsomely for the broadcasting rights for the Super Bowl. The estimated revenue from commercials alone is over $500 million. The details of how this is worked out aren’t exactly laid out, but you can be sure Fox is banking on this commercial revenue to recover the massive amount of money they shelled out to get the Super Bowl in the first place.
This year you’ll have the privilege of seeing political campaign ads from current President Trump and Democratic challenger Michael Bloomberg. Thus, every time you see a political ad you know it cost each respective party $5.6 million. The usual suspects will be back this year and they include Anheuser-Busch, Pepsi, and Doritos. Snickers and Squarespace are returning after a few year hiatus and will be joined by newcomers Facebook and Sabra hummus. Historically, the best commercials have come from the beer makers, soda guys and our personal favorite – McDonald’s: The Showdown between Larry Bird and Michael Jordan.
The Super Bowl is the most valuable sports event brand in the world. It’s projected revenue dollars are in the billions when it’s all said and done. Remarkably, the commercials that air during the event are one of the top revenue generators. We would be remiss if we didn’t mention that ticket sales for the 2020 Super Bowl between the Chiefs and 49ers are at an all-time high as well. The average price per ticket right now is hovering around $8,000. That number is insane! The last time the 49ers were in the Super Bowl in 2013 vs. the Baltimore Ravens the average price per ticket was around $3,000. Also, that $8,000 per ticket number for this year’s game is almost double the average cost from last year’s Super Bowl in Minnesota between the Patriots and Eagles. Clearly, there is an extra buzz around this game. The advertising and ticket price numbers are putting Super Bowl LIV in a position to be the highest revenue generating Super Bowl of all-time.