The Economy of the Super Bowl

Like millions of football fans around the globe, stock market observers will once again perform the annual ritual of gluing themselves to the tube Sunday, anxiously awaiting the outcome of the Super Bowl. We've heard how accurately the so-called "Super Bowl Stock Market Predictor", has, ever since Super Bowl I, indicated the direction the market would take (http://www.forbes.com/2004/01/28/cz_jd_0128inlwatch_print.htm). Theory has it that if the NFC team (this year the Giants) wins, the stock market will rise during the course of the year; if the AFC team (the Patriots) wins, the market will take a downward turn.

I won't bother to rehash the experts' explanations for this phenomenon, but I will go out on a limb and declare that the Super Bowl game itself, no matter which team wins or loses, is a boost for the economy as a whole and particularly for the stocks of all parties involved.

According to Bloomberg.com, as of Friday morning, February 1, two days before the Big Game, Class A shares in News Corp. (Fox Network's parent company) rose 28 cents, or 1.5 percent on the NYSE. Fox expects to bring in over $215 million in ad revenue from pre-broadcast promos and the broadcast itself.

A 12-year study by marketing profs at the University of Wisconsin-Eau Claire found that in general, "firms that advertise in the Super Bowl get a stock price bump" (http://www.uwec.edu/newsreleases/08/jan/0124SBFactSheet.htm). Surprisingly, likability of the ads didn't matter--the company's stock still rose. Seems like it's the simple exposure that counts, not the fact that the ad might make you want to run to the rest room.

So regardless of whether or not your favorite team wins the Big Game; if you own shares of stock in News Corp., Toyota, Procter & Gamble, Anheuser-Busch, or any of the other giant companies that have poured millions into the Super Bowl broadcast, you should be sitting pretty when the bell rings Monday morning at the NYSE. That is, barring a Janet Jackson wardrobe malfunction-type incident.