super bowl recession, super bowl economy
Morry Gash/AP
A nearly empty hallway is seen at the Tampa Convention Center for NFL football Super Bowl
XLIII Wednesday, Jan. 28, 2009.

Super Bowl Hit by Recession

January 31, 2009 07:59 AM
by Denis Cummings
Buzz surrounding the Super Bowl is down from previous years, as fans and corporations have cut back on spending due to the recession.

Economic Woes Felt at Super Bowl XLIII

The Super Bowl has long been an “an outright orgy of football, glitz and gluttony, a celebration of excess where too much was never enough,” writes The Associated Press. This year, however, there are empty hotel rooms, cancelled parties, less advertising, lower ticket prices and less money being generated.

“When I think of the NFL, I think of recession-proof,'” said Arizona Cardinals lineman Elliot Vallejo. “But that's not true anymore.”

The global recession has cut down on the number of fans traveling to Tampa. Even with a wave of dedicated Pittsburgh Steelers fans making the trip, more than 60 hotels in the Tampa Bay region still had empty rooms earlier this week. Furthermore, people are far less willing to pay thousands of dollars for a ticket.

Online ticket broker StubHub is reporting that the average price of a scalped ticket is under $2,500, down from more than $3,500 in 2008 and more than $4,000 in 2007. “These are the lowest levels we've ever seen,” a spokesman for StubHub, which has operated for nine years, told MarketWatch. “People just don't have the disposable income they've had in the past.”

The effects of the recession are especially seen in the amount that corporations are spending on advertising, sponsorships, parties and other promotional events. FedEx and the “big three” automakers are among the big names who have decided not to run Super Bowl commercials. Companies such as Playboy, Sports Illustrated and Nike have cancelled their lavish Super Bowl week parties, while several other corporate parties were scaled back significantly.

The rich and famous are not attending the game in the same numbers as usual, which is due in part to the location of the game. “We knew in March that it was going to be a light year, having nothing to do with the economy,” said Brian Gordon, president of Miami Marketing Group, to the Pittsburgh Business Times. Gordon noted that the Tampa Bay region does not have the luxury hotels or overall glamour of other Super Bowl locations.
Rob Canton of PricewaterhouseCoopers told The Wall Street Journal that the Super Bowl is likely to produce about $150 million for the Tampa Bay region, down from more than $190 million for each of the last two Super Bowls. Canton calculates that in a healthy economy, the game would have produced about $180 million for Tampa Bay.

Still, in the current current economic climate, $150 million is a good yield for the area. “The one thing I can say, we are glad to be having the Super Bowl this year more than any other year,” said D.T. Minich, executive director of Visit St. Petersburg/Clearwater, to CNBC. “We need the business now. … We need these kind of events now, more than ever.”

Analysis: How the recession is reflected in commercials

NBC is charging $3 million for a 30-second commercial, the highest rate ever. It had trouble finding buyers, as it had to sell 10 percent of its commercial spots in the final week before the game. Several large companies have chosen not to run ads this year, including the “big three” American automakers: Ford, Chrysler and General Motors. It is the first time that none of the three has had a Super Bowl ad, according to The Guardian.

The reason for the commercial slowdown, explains Forbes, is that many companies aren’t generating innovative products to promote and many are too focused on their short-term survival to pay $3 million for a commercial. Others are concerned that it is bad for their corporate image to spend money on Super Bowl spots while cutting salaries or laying off employees.

Those who are advertising this year are concerned about making ads that appeal to people hit by the recession, without being too serious or lighthearted about the situation. “They need to recognize the environment we’re in, so they don’t want to appear too flip, making light of a tough situation,” marketing professor Tim Calkins said to The New York Times. “But the people who watch the Super Bowl, they still want to be entertained.”

The reduced number of large company commercials has opened the door for Cash4Gold, a company that uses direct-response advertising to offer money for spare gold. It may be the first time that a direct-response ad—ads that are typically cheaply produced and aired outside of primetime slots—has aired during a Super Bowl.

“In tough economic times, these ads seem to gather more traction, particularly as TV networks find it harder to sell inventory amid an economic pullback,” writes Advertising Age.

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