February 6, 2012 – Privately-held New York Giants emerged victorious after a nail biting finish against also privately-held New England Patriots on Sunday. One of the most watched sporting events annually, the Super Bowl is the pinnacle of broadcast spectator sports. So does winning the Super Bowl actually increase the revenue of the winning team the following year?
The answer in a word: No.
PrivCo, the private company financial data authority, has compared the revenues of the past 8 Super Bowl winners (all of which are privately held) and tracked their revenues the year after their Super Bowl wins.
PrivCo crunched the financials and here is what we found:
|Year||Super Bowl Winner||Following Yr Rev||% Increase||Avg. NFL Rev. Increase*||% Revenue Bump|
|2010||New Orleans Saints||$261,000,000||6.53%||0.85%||5.68%|
|2008||New York Giants||$230,000,000||7.48%||7.10%||0.38%|
|2005||New England Patriots||$250,000,000||5.93%||2.31%||3.62%|
|2004||New England Patriots||$236,000,000||23.56%||12.96%||10.60%|
|2003||Tampa Bay Buccaneers||$175,000,000||4.17%||7.81%||-3.64%|
The results are rather interesting:
- Between 2010 and 2006, of the 5 teams that won the Super Bowl, only 2 showed an extra revenue “bump” compared to the average revenue growth of all NFL teams
- 3 of the 5 teams actually saw their revenues increase at a slower rate relative to the other teams
Per PrivCo analysis, the three main factors nullifying the wining teams' revenue boost:
- The "socialistic" NFL revenue-sharing model: Each of the league’s 32 teams receive an equal share of league revenue (consisting of national broadcast and merchandising revenue), typically accounting for 2/3rd’s of each team’s total revenue. The teams also keep 2/3rds of local ticket or “gate” revenue; the remaining 1/3rd is pooled together and evenly split. The methodology is to keep all teams competitive and healthy to attract more fans to the franchise, boosting the revenue of all teams involved.
- Short Postseason: The postseason for the NFL is also very short compared to other sports. Winning teams have a limited window of opportunity to take advantage of a good year (typically by increasing the price of post-season tickets).
- Advanced Bookings: Media rights are usually contracted for several years, and a team may easily be losing once the contract is renewed due to the competitive nature the league’s business model (with limits on team spending to even the playing field).
PrivCo Conclusions: Although winning the Super Bowl brings prestige and respect to a team, the win does not necessary translate to a higher top line for the franchise. A short postseason, a “socialistic” revenue-sharing model, and pre-sold media rights and tickets nullifies the advantage of winning the Super Bowl as a revenue enhancer. Despite the impressive win over the Patriots, the Giants should not expect any added influx of revenue in 2012.