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Tuesday, February 05, 2008
 
After the Super Bowl Euphoria: How Bad Does The Economy Have To Get Before They Share Ad Money With the Rest of Us?

The title is obviously a rhetorical question laced with ironic humor, but the American reality is not so funny. With the opulence of the Super Bowl still in our consciousness, we are teetering on the brink of a nationwide recession. We just finished January 2008, and one of our major stock exchanges (NASDAQ) had the biggest drop (10%) in its history. Foreclosures are skyrocketing at rates reminiscent of The Great Depression in the 1930’s. Through foreclosures, over 400 US families lost their homes in 2007. And the foreclosure rate shows no signs of getting better. Foreclosures filings are up 75%. One out of every 100 homes is in some state of foreclosure (e.g. demand letters forward). And oh by the way, the US just recorded a net job loss for the first time in over 20 years.
As bad as it is for millions of Americans, corporations still find millions to spend on a “game” designed just for fun. PepsiCo paid more than $5 million for a 60-second music video that featured the winning artist selected by consumers in an on-line vote. On balance, corporate advertisers paid $2.7 Million for a 30-second spot – 30 seconds! Audi, maker of luxury automobiles, didn’t just run one 60-second ad. It also entertained potential customers since the Wednesday before Super Bowl Sunday. Try to find that business expense on the financial statements. How many people on that invitation list are feeling the pinch of the economy? Perhaps they and the corporate Board of Directors are the same people looking to buy the home of the now-deceased “Queen of Mean” Leona Helmsley in Greenwich, Connecticut for $125 million. And oh by the way, as most blue collar fans of football went to the gas pump with no raise in salary, Exxon-Mobil just announced record profits of $40 Billion, among one of the highest reported earnings gains in history.
So how bad does the economy have to get before the Super Bowl is cancelled? After watching Mr. Macho Plaxico Burress cry after being overwhelmed with the pure joy of victory, I am again convinced the players would play in that game for free (plus a little someum’ someum’). But if corporate advertisers call time out, there would be no super in Super Bowl. The Wall Street Journal has reported that at least on some occasions the spike in sales for Super Bowl advertisers after the game exceeds the Standard & Pours 500 top firms. But we don’t know if the spike was simply about that one event, how long the “spike” lasts, and whether that same money would have been better spent on other elements of profiteering (e.g. like reinvestment in the entity that drives the income). So we really don’t know if Super Bowl advertising adds to the bottom line commensurate with the cash investment.
With that uncertain return on investment, isn’t it logical to ask: “What events must take place before the Board of Directors collectively says: “You know , our country is hurting at such a level we should donate, oh say, 3 seconds worth of what we spend on advertising to help those who could not afford the Super Bowl ticket.” And if those corporate advertisers huddled with those with responsibility for the infrastructure of America (e.g. public transportation companies that can deliver urban want-to-work people to the ‘burbs where many jobs exist, or to help fill the gap in health care for those who can no longer afford it) the Super Bowl would not starve. If the plan was to help the homeless, the Super Bowl would still have a home the next year. If The Great Depression actually hit, maybe the Super Bowl would be cancelled. But why wait until then to do the right thing? And what is the “right thing” you ask? Answer: just get a better balance between profit-making and philanthropy. Those strange bedfellows actually co-exist in many non-governmental agencies, the Gates Foundation, and the multi-million dollar foundations of several professional athletes. If Super Bowl’s corporate advertisers joined that movement, we would be cheering more than that one game played once a year just for fun.





5 Comments:

Okay, but many of these corporations already give thousands, and in some cases, even millions of dollars to philanthropic causes already, far, far exceeding the standard you put forth here - "3 seconds worth of what we spend on advertising to help those who could not afford the Super Bowl ticket".

Anonymous Chad -- 2/05/2008 3:43 PM  


Also, the post ignores the fact that these advertisers are among the biggest employers in America as well. Advertising drives sales. More sales leads to increased revenue and growth. When businesses grow, they create jobs and the economy grows and we get out of economic downturns.

Skeptical about the effects of Super Bowl advertising? Opportunities to have 100 million people see an ad for your product don't happen often. And unlike other television advertisement, the Super Bowl is known for having great advertisements, which draw as much fanfare as the game itself. Youtube and Myspace bid for the rights just to host the ads online. The ad money spent at the Super Bowl seems extravagant, but it is certainly money well spent.

3 seconds of Super Bowl advertising is worth approximately $300K. I would suspect that every single company that advertised during the Super Bowl spends at least that much, if not many times more in philanthropy each year. In fact, Anheuser-Busch has spent nearly $40 million per year in charitable giving in the past decade. $40 million would buy about 7 minutes worth of Super Bowl advertising -- far more than the 3 seconds you desire.

I certainly understand, and in some ways agree, with your stance in this post. However, the Super Bowl is definitely not among even the top 100 concerns facing this country today.

Blogger William -- 2/05/2008 5:51 PM  


What does this post have to do with Sports Law???

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Blogger tutekx -- 2/07/2008 4:01 AM  


Only 400 families lost their homes to foreclosure? There's something missing there. Could it be 400,000?

Anonymous Anonymous -- 2/07/2008 11:47 AM  


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