(Levi’s Stadium in Santa Clara via Kirby Lee/Reuters)
The Super Bowl is the world’s most commercially successful sporting event.
With a record 127.7 million people watching last year’s game, NBC will generate more than $700 million this year in advertising revenue from commercials alone. Dozens of luxury suites have already been sold for $1 million or more, and the San Jose airport expects 150 private jets, each paying a $10,000-$20,000 special-event fee just to land.
But everyone knows that stuff. What people don’t understand is how the NFL actually determines which city hosts its biggest game. Spending billions to build world-class stadiums certainly helps, with SoFi Stadium (Los Angeles) and Allegiant Stadium (Las Vegas) hosting Super Bowls in 2022 and 2024. But that’s just the tip of the iceberg — with more cities than ever interested in hosting the NFL’s Super Bowl, the league has used its leverage to create one of the most lopsided business deals in sports today.
Nearly everything, from use of the stadium to hotel rooms, luxury suites, golf courses, bowling alleys, rental cars, and parking spaces, is provided free of charge. The NFL also controls 100% of ticket sales and is completely exempt from paying sales taxes.
So for today’s newsletter, we’re going to do something different. After spending the last few days reading through the NFL’s entire 154-page bid submission document, I have outlined 40 of the most interesting details below. This document is a decade old, so specific dollar amounts need to be adjusted for inflation. But given that this report outlines (in incredible detail) exactly what is required of a Super Bowl host city, it also provides a unique behind-the-scenes look at the economics of the NFL’s biggest game.
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The NFL gets to use the Super Bowl stadium rent-free for 30 days before the game and 24 days after — a total of 54 days of use, completely free of charge.
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The Super Bowl stadium must have at least 70,000 seats. If the stadium is located in a city where the historical average daily temperature over a 10-year period during the week of the game is below 50 degrees, it must have a dome. If the NFL decides to make a weather-related exception, as it did at MetLife Stadium in 2014, the stadium must install an under-field heating system (at its own expense).
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The NFL sets ticket prices and receives 100% of ticket revenue. As for ticket allocation, the two participating teams each receive 17.5% of the total tickets available (35%); the host team receives 5%; the 29 other NFL teams each receive 1.2% (34.8%); and the NFL controls the remaining 25.2% of Super Bowl tickets.
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The host city must provide the NFL with three championship-level 18-hole golf courses and two top-quality bowling alleys, free of charge, for charity events.
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The NFL can cover or remove ATM machines inside the Super Bowl stadium if they conflict with its preferred payment partner. This also applies to food and beverages. So, if the stadium typically serves Coca-Cola and Heineken, the NFL can replace those beverages with league sponsors, such as Pepsi and Bud Light.
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The host city must provide the NFL with sales tax exemptions on all revenue generated from ticket sales, parking fees, merchandise, and NFL-related events.
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Sixteen months before the Super Bowl, the NFL will send 180 people to the host city for a “familiarization trip” to inspect the region. The host city must cover all the expenses for this trip.
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The NFL must be allocated at least 50% of all luxury suites (no less than 70). At least 75% of these suites must be between the end lines, with 30 suites on the press box side and 4 suites at the 50-yard line. The four best suites go to the participating teams, the league’s broadcast partner, and Commissioner Goodell.
