HBS Professors Make Super Bowl XLIX Play: MBA News

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While millions tuned in to watch Sunday’s Super Bowl XLIX, the centerpiece of the US’s sporting calendar, three Harvard Business School (HBS) professors took to Twitter to assess the economics behind the New England Patriots’ defeat of the Seattle Seahawks.

V.G. Narayanan, head of the HBS’s accounting and management department; strategy professor, Bharat Anand; and Jan Hammond who takes technology and operations management classes in the HBS MBA program, used the account of the school’s online education platform, HBX, to put their take on a game of (American) football that has a huge financial impact on the US.

Harvard Business School’s take on the game’s economics

From a business perspective, the advertising and marketing potential of an event watched and followed by so many is the most cited. Indeed, it’s estimated that spending in the US on Super Bowl-related merchandise, apparel and snacks will reach US$14.3 billion in itself. Small wonder then, that a 30-second advert during Super Bowl XLIX was priced at US$4.5 million.

Another professor at HBS, Thales Teixeira, gave his thoughts on why companies are willing to pay that price: "This year’s game is going to reach 120 million people, so it represents one of very few instances where advertisers can get access to so many people at the same time, particularly in a live situation in which they know exactly when consumers are watching their ads," he said.

Over on Twitter, meanwhile, the HBS faculty trio pointed to research from Stanford GSB and Humboldt University, Berlin which argues that prolonged advertising during the Super Bowl can help a brand develop an association between its products and the act of watching sport. Budweiser’s purchase of exclusive Super Bowl advertising rights for over 20 years is the major example given - something that the researchers say has brought in long-run returns for the company.

Indeed, the publicity potential is such that, according to the Harvard Business School professors, Katy Perry was willing to headline the halftime show of Super Bowl XLIX for free.

Away from advertising aspects of the game, there was also a debate on ticket pricing and the phenomenon that is the ticket reselling market – something that saw tickets originally priced between US$800 and US$1,900 exchange hands for as much as US$9,000 in the run-up to the game itself.

HBS MBA salaries pale in comparison to Super Bowl players

There was also some consideration for the players involved in Super Bowl XLIX themselves – in terms of salary. Just as MBAs working in the finance industry might look forward to those end of year performance-induced bonuses, so too can professional footballers. Each player on the Patriots’ team stood to receive a US$97,000 bonus for winning, with a US$49,000 consolation prize reserved for members of the Seahawks, according to the 2014 NFL Media Guide.

Of course, whether the players really attribute much significance to these amounts completely depends on their individual salary status. The average salary among both teams is US$2.1 million, with the median salary coming in at around US$765,000. That’s more than six times higher than the median base MBA salary of US$125,000 received by Harvard Business School’s class of 2014.

Having said that, an MBA career is likely to last a good while longer than a professional playing career in the NFL – where athletes come and go after an average of just 3.3 years, according to figures from the NCAA (National Collegiate Athletic Association) cited by HBS’s faculty members. Perhaps this is why initiatives to give athletes a grounding in business education in preparation for their post-playing careers have sprung to life, such as that seen between the NFL Players Association (NFLPA) and Indiana University’s Kelley School of Business.

The NCAA also says that only 1.6% of its seniors will ‘make it’ and be drafted by a team in the NFL – a number that is far lower than the acceptance rate of 12% seen at Harvard Business School over the past two years.