ConvergEx's annual analysis of Super Bowl economics shows that, when the time and place is right, prices can soar like a Hail Mary pass to clinch the playoffs. Yes, the face value for tickets is unchanged in the last year - $800 to $1,200. But the street price for a ticket to the big game will set you back at least $2,000, and the average ticket is running closer to $4,000. The good news, sort of, is that there has been no inflation for the “Cheapest” seats since last year, when they were also two grand. And that is despite a smaller stadium this time around (68,000 versus +80,000). A signal about the stagnating confidence of the high end consumer? Perhaps. But anyone wanting to attend had better be ready to pony up for hotels, airfare and rental cars that run 3-10x the usual prices for this time of year. In Indianapolis. The good news – next year’s game is in New Orleans. So even if street prices don’t pick up this week, we’re pretty sure next year will set new records.
Via Nic Colas, ConvergEx Group: All My Rowdy Friends Are Coming Over Tonight
What percent of football fans would take a free ticket to the Super Bowl this Sunday? You’d think it would be close to 100%, but you’d be off by about 90%. The real answer is 10%. That surprising fact comes courtesy of the Indianapolis Star, which reported that only 246 of the 3,200 people who were accidently shut out of last year Super Bowl and got replacement tickets actually decided to cash them in for this year. The rest either took the cash offered by the league ($5,000) or are clearly hoping that their team (Green Bay or Pittsburgh) makes it back to the big game in a future year.
The Super Bowl is, of course, the most important game of the year in America’s most popular sport. But it is also a useful economics lab that allows us to study both the confidence of high end consumers as well as the pricing of resources that are temporarily scarce. The “Big Game” occurs every year at the same time, give or take a week, so any given year’s data is roughly comparable to other periods. And, of course, the content is the same.
Let’s start with the price of a ticket to the game, because to get into Super Bowl #1 would have cost you all of $12. That was in Los Angeles in 1967. And the best seat in the house. From there stated ticket prices went to $50 in 1984, $100 in 1988 and $500 in 2003. Now, the prices printed on the ticket for the Indianapolis game this Sunday are between $800 and $1,200. As the accompanying chart shows, this is an inflation rate of around 8,900% for the period, versus 687% for the Consumer Price Index.
We all know, however, that very few people pay the sticker price. No – if you want to go to the game, you’d better find a large crowbar for your wallet. The cheapest seats we found online run about $2,000 currently. The average is closer to $4,000, although prices appear to be softening a few hundred dollars in recent days.
We’ve kept track of “street prices” for Super Bowl tickets the last three years running, thinking of this as an indicator of high-end consumer confidence. Not every fan can go to the game with the prices noted above, after all. As the economy recovered in early 2011 from the same period in 2010, the market for Super Bowl tickers strengthened right along with stocks or gold bullion. The scalper’s price for a 2010 Super Bowl ticket - $1,300. In 2011, this jumped to $2,000, a 50% increase.
In 2012, however, there has been no further advance in the market price of a Super Bowl ticket. Yes, this measures only the price to physically get into the stadium - the rock bottom cheapest seat. This is puzzling, because by all rights it should have advanced this year. Here’s the logic:
- This year features two teams from major media markets – New York and Boston, versus the smaller demographic footprints of last year’s game.
- The price of a 30 second ad during the game is at a new record – some $4 million. And many advertisers will plunk down for “Long form” ads that go 45 seconds or even a minute, according to press accounts. Lastly, all the ad spots for the actual game are sold out.
- Lucas Oil Stadium has about 30,000 fewer seats than last year’s venue in Dallas. That alone should have popped street prices to new highs, but it clearly hasn’t.
So what gives? Well, it could be the amazing prices for seemingly every ancillary support service required to actually attend the game. Consider the following:
- Enterprise car rental is charging $84/day for a small car this weekend. Two weeks from now (presumably a more normal reflection of supply and demand), this drops to $29/day. If you are in the market for a car this weekend, by the way, our work shows that Enterprise has the best deal at the moment.
- Despite the fact that New York is closer to Indianapolis than Boston, it is actually more expensive to fly out of NYC. This weekend, roundtrip airfare is running $910 from the Big Apple and $650 from Beantown. But in two weeks time, these fares drop to $282 from NYC and $349 from Boston. As an aside, one of our senior partners who sits on one of our trading desks is going to the game. He is driving. With three other friends. From New Jersey. If you see a fellow walking along the side of Route 80 wearing a ConvergEx fleece this weekend, please offer him a ride.
- Affordable hotels/motels aren’t so budget friendly this weekend. Super 8s and Quality Inns that are usually $74 for the weekend are running $350. And something called America’s Best Value Inn was offering a room for $950/weekend. Normally, the rate would be less than $100.
I think it is probably a stretch to extrapolate that flat street prices are indicative of a turn for the worse when it comes to the high end consumer. It may well be that buyers are holding out to see if prices soften in the coming days. And if they don’t, then Super Bowl XLVI will set records for street prices, just as they have in prior years. And if they don’t, it may be more telling that the venue and the price gouging for basic services and accommodations are beginning to offset the appeal of attending the game.
One thing I know – next year it won’t be a problem to set a new street price for the Super Bowl, regardless of whatever the economy may bring. It is in New Orleans.