- Showpiece event at Mercedes-Benz Superdome expected to cost organizers $13m
- Historic college football bowl donating $8m from game’s revenues to fund championship
- CFP title game expected to generate $300m in economic impact to region
Despite bringing significant prestige and national publicity, the College Football Playoff (CFP) national championship game is often a loss-making venture for the event’s hosts.
In January 2019, the San Francisco 49ers lost approximately $10m (€9m) in staging the showpiece event between Alabama and Clemson. The 49ers reportedly generated $15m from advertising, premium suites, concessions and its allocation of 6,000 seats to the game. However, with the CFP organization controlling the game’s main revenue sources, including the vast majority of ticket inventory, it was nowhere near enough to cover the $25m staging costs.
Accordingly, host cities – especially ones with smaller business communities – have been forced to become far more creative in how they help pay for the event.
On January 13, the New Orleans Mercedes-Benz Superdome will stage the CFP title game between Louisiana State University (LSU) and Clemson, just two weeks after the 73,000-capacity venue held the Allstate Sugar Bowl between Georgia and Baylor on January 1, which attracted an announced crowd of 55,211.
It is the first CFP title game for New Orleans since the new four-team play-off format was created in 2014. It also promises to be a TV ratings hit: the two semi-final games combined to bring in an average of 19.3 million viewers on ESPN, up six per cent from last year.
And with the participation of LSU, who are based in nearby Baton Rouge, tickets for the event were selling for an average price of $2,863 as of December 31, three-times more than the 2019 average resale ticket of $1,043, according to secondary-ticket marketplace SeatGeek.
The principal reason why the Superdome was able to secure the CFP title game is because the Sugar Bowl Committee is donating $8m in revenues to the New Orleans College Football Championship Host Committee, with the state of Louisiana and private fundraising covering the remainder of the estimated $13m total costs.
According to organizers, without the financial capability and willingness of the Sugar Bowl – which has been played annually since 1935 in New Orleans – to put up the money, the CFP title game simply would not be at the Superdome.
The Sugar Bowl spearheaded the bid effort for the 2020 CFP title game with support from the Greater New Orleans Sports Foundation; SMG, the management company of the Superdome; the NFL’s New Orleans Saints; the Ernest N. Morial Convention Center; the New Orleans Convention and Visitors Bureau; the New Orleans Tourism and Marketing Corporation; as well as multiple government agencies on the state and local level.
The CFP title game – which includes three days of music concerts and other ancillary events – is expected to generate $300m in economic impact to the region. It is also hoped that the Superdome’s moment in the spotlight will bring more visitors and major events down the line.
Jeff Hundley, the Sugar Bowl chief executive officer and New Orleans Host Committee executive director, spoke to SportBusiness about the logistics of hosting two major events in a fortnight and the city’s CFP title game funding model.
Q. How great is the challenge to organize the Allstate Sugar Bowl and the college football title game within two weeks of each other?
Hundley: It’s been a significant increase in workload but one that we’re accustomed to doing, going back to the BCS National Championship era. The biggest difference with the CFP event is that 1) it’s larger in scope and 2) it’s one that you have to bid on. It’s more of a competition [to host the event] so we had to muster money, resources and a sales pitch to convince the organizers of College Football Playoff that New Orleans was a good spot and ultimately we were successful in getting that. The biggest difference in workload is that when we hosted the BCS Championship games, we called the shots. Now we have more of a facilitator role for the organizers.
We’ve been working simultaneously on both endeavors. The national championship efforts have been ongoing for the better part of two years and we’ve got a lot of moving parts. There are a lot of events outside of the game itself – there is a three-day music festival, there is a three-day interactive fan event at the Convention Center, we have another sponsorship activation area called the Allstate Championship Tailgate Plaza which goes on for three days. So there any number of logistics that go into that.
We assist with anything and everything throughout, such as traffic patterns, advertising, decoration, signage, invitations, you name it. Once we finish our Sugar Bowl duties, it will maybe lighten up just a little bit. But because of the size and the magnitude of the championship game, that will increase the workload. So we’ve got a big couple of weeks to get ready for that.
Q. How do the organizing committees for the two college football events align or differ?
H: The Sugar Bowl Committee is a group of 125 community volunteers, who are members of the organization, and on top of that we have a full-time staff of 11 people. Then with the national championship game, it is basically an all-hands-on-deck effort. Primarily making up the host committee are the Sugar Bowl Committee and Greater New Orleans Sports Foundation. We both have volunteers and we both have full-time staff and by having that we’re able to get a lot done and do it in a manner that is befitting the national championship game. I’m biased but I think we’re doing a pretty good job up until now and we’ll finish strong to help CFP put on what we think will be their best effort yet, but time will tell.
Q. Sugar Bowl revenues pay the bulk of the costs of the CFP title game, so is hosting two events back to back an essential part of the business model?
H: In competing against other cities, the event would not have come to New Orleans had the Sugar Bowl not stepped up and pledged millions of dollars of its own money to bring it here because we don’t have the same state and city funding that other areas have. We don’t have as big a business community and in fact we’re a smaller city than Atlanta, Dallas, Houston, Miami, Phoenix, Santa Clara…so it required us to step up and do it.
It’s not something that the host committee can make money on. Any money that the event generates goes to the College Football Playoff. But we feel that we’re doing our civic duty in bringing the game here. The Sugar Bowl organization is funding about 65 per cent of the expenses, the state is funding another 30 per cent and private fundraising is the remainder of how we got to our budget. It works for us but everyone does it a little bit different. In a perfect world, our state [Louisiana] would have the wherewithal to pay for the entirety of the event but that wasn’t the case this go-around.
Q. What specific goals are you hoping to achieve in hosting a successful CFP title game?
H: We want an event that runs seamlessly. We’ll definitely be gauging the economic impact of the event. Early estimates are that it could be a $300m economic impact event for the city and the state. The national spotlight is important to us in New Orleans because we have a reputation as a big-event city and you don’t maintain and sustain that reputation without every now and again getting back into the national spotlight. We think it will do well and ultimately everyone involved from top to bottom will judge how we did. But historically we’ve done well and these events keep coming back here and we think that we’ll have the opportunity to host this and other events down the line. We do have the men’s [NCAA basketball] Final Four in 2022 and the Super Bowl in 2024 so by staying in the national spotlight, it helps us stay in the hunt for these type of events.
Q. In what ways will the future $450m renovations Superdome help the facility gain new events?
H: Phase one of that will start right after the national championship game and will go on for three more years. That’s an important piece in all of this because although the Superdome is an iconic building, it’s an old building and for us to stay in the hunt for these type of events, we have to have these type of renovations. With this latest renovation when it’s complete, it will keep us competitive with any other facility in the country. We don’t believe we have to be the best but it needs to be in the ballpark [with other stadia].