The Weeknd's $7 Million Super Bowl Investment
The Weeknd's $7 Million Super Bowl Investment
Most people were shocked to hear that The Weeknd wasn't paid for his Super Bowl halftime performance, but based on future financial return, should they be?
Friends,
Given you subscribe to a sports business-focused newsletter, I’m sure you’re already well aware: Tom Brady won his 7th Super Bowl Championship last night, firmly cementing himself as the greatest NFL player of all time.
Hate him or love him; you have to respect him.
Rather than run through the economics of additional endorsements Tom Brady might see after winning a record 7th Super Bowl Championship, we’ll take a different approach today.
What am I talking about?
The halftime show.
Check this out….
Sure, some of you may already know this, but based on the response to my Tweet last night, there are plenty of people who had no idea.
Today, we’ll change that.
Let’s run through why The Weeknd performed for free, who pays for the production of the performance, and the economic impact on the rest of his career.
What Does History Tell Us?
First, let’s clear the air.
From Jennifer Lopez and Katy Perry to Justin Timberlake and Lady Gaga, the most famous halftime performers in history have never been paid to perform at the Super Bowl.
Instead, they are rewarded with exposure.
In a typical year, the Super Bowl has more than 100 million viewers worldwide tune in to watch the game, which provides an incredible stage for promotion, exposure, and the promise of future financial gain.
Here’s what I mean (Source):
According to Nielsen, when Jennifer Lopez and Shakira performed last year, purchases of their songs jumped 1,600%.
During the week after the Super Bowl, Jennifer Lopez gained more than 2.3M followers across her social media channels, while Shakira gained over 600,000.
Jennifer Lopez and Shakira saw their on-demand music streams increase by 150% and 220%, respectively, the night of and day after last year’s show.
As for The Weeknd, check this out:
It hasn’t even been 12 hours since the Super Bowl ended, and his music represents 8 out of the top 10 trending songs on Spotify already.
That’s what 100M viewers can do for you, not to mention the billions of social impressions generated before, during, and after the performance.
Simply put, it’s one of the greatest promotional events in the world.
Aside from the increased exposure through linear television and social media platforms, The Weeknd will see most of his financial benefit come via future tours.
Based on historical data from ticketing platforms like Stubhub, we know that concert ticket sales typically jump 50% for halftime acts following the Super Bowl.
Here’s an example via Forbes:
While [Jennifer] Lopez and Shakira weren’t able to capitalize as the pandemic canceled their concerts, Maroon 5’s per-city average gross grew by $200,000 to $1.7 million after performing in 2019’s halftime show. Travis Scott, who also performed that year, more than doubled his performance haul; he now grosses over $1 million per show.
The unfortunate part?
The Weeknd plans to embark on a 66 show tour across North America and Europe starting in June, but with COVID-19 still impacting the ability to conduct live performances with sold-out crowds, who knows if that will happen.
If not, given his last tour in 2017 grossed ~$100M, The Weeknd will miss out on a massive payday.
Even more interesting?
While it’s common that the Super Bowl halftime performer isn’t paid for their performance, The Weeknd actually paid the NFL to perform — about $7M in total.
Here’s how the production expense budget works:
In a typical year, the NFL and its sponsors cover all costs related to halftime show production. However, you’re still given a budget — presumably around $13M based on previous halftime performances' reported costs.
The Weeknd, on the other hand, felt that a $13M budget was inadequate given his vision, deciding to spend $7M extra — $20M in total — to make the performance what he envisioned.
My take?
It’s a no-brainer.
While countless brands spent $5.5 million for 30-second Super Bowl advertisements, which most likely will be forgotten by Friday, The Weeknd paid $7M, or just $1.5M more, for a 15-minute commercial.
Not to mention all the pre- & post-performance social impressions also.
That obviously makes a lot of sense.
Now, the ROI depends heavily on his ability to go on tour within 12 months.
On that front, only time will tell.
Have a great day, and we’ll talk tomorrow.
Extra Credit
Today’s extra credit is simple, but given the age of 28-36 is most often considered an NFL QBs prime, I found this stat absolutely wild.
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