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NFL Cashing In With Super Haul on Super Bowl

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TIMES STAFF WRITER

Super Bowl XXVII will be the most profitable one-day event in American sports history.

How profitable?

Given the National Football League’s penchant for secrecy, it’s impossible to pinpoint all the costs and revenues associated with the annual extravaganza.

But interviews with league executives, vendors, marketing experts and people connected with the Super Bowl XXVII Host Committee put Sunday’s contest in the Rose Bowl at the hub of a meticulously crafted money machine.

The league’s revenue from tickets, broadcast rights, licensing, sponsorship, concessions, videos, parties, exhibits, game programs and other Super Bowl wares easily exceeds $50 million.

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And many of the NFL’s expenses are absorbed by the Host Committee or sponsors who want to share in the glory of the game.

“It’s scary how good these guys are at making other people pay for the privilege of associating with them,” said a Manhattan-based sports consultant who has worked with the NFL.

For an idea of the size of the Super Haul, consider that the NFL expects its agents to seize up to $2 million worth of “knock-off” merchandise from unlicensed street vendors this week--a tiny fraction of the legitimate sales.

The NFL is a private business run by 28 wealthy team owners. To protect its privacy, the league papers over the landscape with non-disclosure agreements. If you want to do business with the NFL, you sign a gag order.

Still, it’s possible to sketch out an income statement that even Jim Steeg, the NFL’s executive director of special events, acknowledges is close to the mark, although he will not confirm specific numbers.

Easiest to calculate is ticket sales. With about 101,000 seats selling for $175 each, the take is more than $17 million.

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The biggest source of Super Bowl revenue--and the most mysterious--is U.S. television rights. Super Bowl XXVII is just part of a four-year, multibillion-dollar agreement involving five networks. Super Bowl fees are not broken out separately.

NBC, which is carrying the game this year, puts the figure at $40 million. The NFL and other observers say that’s too high.

The last time Super Bowl rights were auctioned off separately, they brought $18 million, Steeg said. A very conservative estimate of today’s value is $25 million, but $35 million is probably closer, considering that Dick Ebersol, president of NBC Sports, said the network’s advertising revenue from the broadcast will total $39 million.

A big moneymaker is the souvenir game program. A source close to the NFL said the league expects $4.5 million in advertising and circulation revenue from the glossy book, which sells for $10.

Sponsorship revenues are tricky to estimate because they, like TV rights fees, are part of long-term contracts. Steeg, a veteran of 14 Super Bowls, didn’t argue with an estimate of $3 million, which probably means it is low.

Service America, concessionaire for this year’s Super Bowl, predicts that the Rose Bowl crowd will need 100,000 20-ounce cups of beer at $6 each and 55,000 soft drinks ($3) to wash down the 70,000 hot dogs ($3), 6,000 pizza slices ($2.50) and 4,500 bags of popcorn ($2) they will consume. The total take on food? About $1 million.

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If you can spend $175 and up for a ticket, you don’t balk at expensive souvenirs. Fans at the Super Bowl will spend another $1 million-plus on those.

The league’s share of the concessions and on-site merchandise comes to about $500,000.

The “NFL Experience,” an instant theme park that the league set up outside the Rose Bowl, may draw 100,000 visitors paying $5 to $14 each. Sponsors also pay for the right to set up exhibits inside. Steeg said the NFL will lose money on the show, however, because the feature’s costs are exorbitant.

The expense side is harder to itemize than the revenue because so much depends on what the league chooses to allocate as Super Bowl-related. Therefore, let’s accept Steeg’s word that the NFL’s main office budgets about $15 million for the game; its NFL Properties subsidiary--in charge of sponsorship and licensing--budgets $6 million to $10 million, and its NFL Films video production unit will spend about $500,000.

One large expense that is known is the players and coaches’ share of the profits: $4.86 million, according to Steeg. That’s $36,000 apiece for the 90 players, coaches and staff members on the winning team, $18,000 apiece for the 90 on the losing side.

Good money, to be sure, but it’s the same amount the players have received for the last 10 years. The shares have been frozen since the expiration of the players’ last labor contract with the NFL.

Here’s a quaint nugget of NFL lore: The league used to pay for the use of a stadium. Now, cities compete for the right to play host to the Super Bowl, noting its huge impact on the local economy.

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The Los Angeles-Pasadena group is covering $4 million of the NFL’s costs, including free rent for the Rose Bowl, limousines, buses, meeting space and a parade of other perks. The Host Committee said the Super Bowl will give the Greater Los Angeles economy a $150-million boost.

According to a formula devised by Clemson University economist Robert McCormick, the event’s total impact approaches $1 billion. His formula-- Tickets Sold x Market Price x 12.5 --is meant to account for everything from a Super Bowl T-shirt that a dad buys at the airport to the value of the three hours a fan in Tokyo invests in watching the game on TV.

A key variable is market price. This does not refer to the $175 stated ticket price but to the much higher street value. People have paid $500 to $1,250 for Super Bowl XXVII seats. If the street value is $800, and 100,000 tickets are sold, the total impact is $1 billion.

Compared to $1 billion, any profit for the NFL may seem modest.

It was possible to identify $55.5 million in revenues and $25.5 million in expenses, for a profit of $30 million.

Steeg noted that the league does not include TV rights fees in its Super Bowl budgeting, so its own profit figure is much lower.

In a sporting gesture, Steeg offered one observation about efforts to penetrate Super Bowl finances: “Usually when people do this stuff, they underestimate.”

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The Super Haul

As the biggest event in American sports, the Super Bowl is also the most profitable. The National Football League is notoriously closemouthed about its finances, but here is a conservative estimate of the big game’s profit picture. (In millions of dollars) REVENUES

SOURCE AMOUNT Tickets $17.0 U.S. TV Rights 25.0 Foreign TV Rights 1.0 Radio Rights 1.0 Licensing* 1.5 Sponsorship 3.0 Programs 4.5 “NFL Experience” 1.0 On-Site Concessions* 0.5 Video Sales 1.0 TOTAL $55.5

EXPENSES

SOURCE AMOUNT NFL Executive Office $15.0 NFL Properties 10.0 NFL Films 0.5 TOTAL $25.5

PROFIT: $30.0

* NFL’s share of gross receipts

Sources: NFL, Super Bowl vendors, marketing experts.

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