How much money should Katy Perry pay to play the Super Bowl halftime show?

The NFL is asking artists if they would pay to play the Super Bowl halftime show. We calculated how much Katy Perry should pay if they had their way.

What do Rihanna, Katy Perry and Coldplay have in common? They were all asked to pay to headline the Superbowl XLIX halftime show. This was met with outrage from artists and fans alike, who saw it as an attempt to exploit musicians and cheapen the value of a storied institution. All three acts refused – at least that’s what they claim – and Katy Perry ended up with the coveted spot through traditional means.

But with the economic juggernaut that is the Super Bowl just around the corner, it’s worth asking the question: Should artists pay to play? If so, how much?

The push and pull between the NFL and halftime performers comes down to two opposing forces:

  1. There is a clear benefit for artists– a halftime performance guarantees a tangible bump in album and concert sales, and an intangible rise in fame that will contribute to lifetime revenue.
  2. There is a debatable gain for the NFL– the halftime show is a multi-million dollar spend without any direct payoff other than viewership numbers – the value of which is crucial or negligible depending on who you ask.

For the sake of this article, let’s say the NFL is right and they’re effectively giving away millions of dollars in free publicity to halftime performers, and that it’s time for them to pay their fair share. How much would Katy Perry owe them for the favor?

Factor 1: The halftime show is a bigger deal now than ever

First, it’s important to understand the magnitude of Super Bowl halftime shows and how they’re a relatively new phenomenon. When the first Super Bowl was played between Kansas City and Green Bay in 1967, the halftime show featured the University of Arizona marching band and a high school drill team. Far from the game’s main attraction, it was a time to let players rest, enjoy some pretty marching formations, and go to the bathroom.

That’s how Super Bowl halftime shows worked until Michael Jackson changed everything in 1993. In an unforgettable extravaganza of a performance, he showed that star power shines brighter than marching bands, and that the 15-minute gap between the halves is some of the most valuable real estate on TV.

The game saw a record 90 million viewers despite a lack of action on the field, prompting the NFL to start thinking about halftime performers in terms of big names and big productions.

For the next decade, the NFL experimented with variety of halftime formats, leaning toward multi-performer galas that packed as many stars as possible into a single performance. Take, for instance, the year with the inexplicable combination of Aerosmith, ‘N Sync, Britney Spears, Mary J. Blige, and Nelly. The idea was to offer a little something for everyone, but with ratings staying more or less flat, the NFL needed a new way to connect.

Starting in 2005, the NFL figured it out: People want to see a single big name performer give a mini-concert filling out the full 13-minute halftime gap. Take a look at the halftime performers correlating with the steady incline in viewers from then onward:

2005 – Paul McCartney
2006 – The Rolling Stones
2007 – Prince
2008 – Tom Petty
2009 – Bruce Springsteen
2010 – The Who
2011 – The Black Eyed Peas
2012 – Madonna
2013 – Beyoncé
2014 – Bruno Mars

Each of these years has brought in more viewers than the last, and from 2008 onward, each year has set a new overall record. The only exception is 2013 when a 34-minute blackout in the second half interrupted the television broadcast, but viewer numbers had been steadily rising through Beyoncé’s halftime performance. Last year, Bruno Mars’ performance attracted a mind numbing 115.3 million viewers.

The point is this: The Super Bowl halftime show is a bigger deal right now than it ever has been, and the shift toward single headlining performers is the crux of its success.

Factor 2: Katy will make tens of millions in album and ticket sales

It has been clearly demonstrated that Super Bowl performers experience a major bump in revenue. Last year, Bruno Mars’ album Unorthodox Jukebox jumped from 18 to 7 on the Billboard chart, his subsequent tour sold out, and resell value of tickets skyrocketed from $150-500. When Madonna performed, sales of her back catalog went up 410% and she became the highest earning musician of 2013 with $125 million in recorded income. Beyoncé experienced a very similar effect, as sales of her album 4 jumped 59% and she ended 2014 as the second highest paid musician in the world with $115 million in the bank.

As for Katy Perry, she was already named 9th highest paid musician in the world with $40 million/year in earnings before her Prismatic world tour started. That tour? It has already brought in $142 million in gross revenue, and there’s an upcoming European leg expected to make her at least another $40-50 million. The album Prismatic was the 6th best selling album in the world in 2013. And all of this is before the help of the Super Bowl.

Katy Perry is poised to experience the same effect as Madonna and Beyoncé and could very likely become the world’s top earning musician in 2015. At the very least, she’ll almost certainly post earnings over $100 million – quite a bit higher than her already impressive $40 million.

Factor 3: The halftime performance airtime is worth $104 million

We all know the Super Bowl has the most coveted and expensive airtime on television, with a history of companies making their whole careers from a single advertisement. How much is that worth? The price of 30-second slot during the Super Bowl is $4 million, meaning that the average 13-minute halftime performance would cost $104 million. That’s $104 million in free advertising for whatever lucky artist gets the headlining spot.

Factor 4: The production cost of the halftime show is rising

Wait, did we say free advertising? Because, actually, it’s not just free, but paid for by the very people putting on the event. The NFL doesn’t pay halftime performers but they do cover all production costs plus travel and hospitality. With performers very aware of the financial boost they’ll feel from a stellar halftime show, the scope of their performances has been steadily increasing and so have the associated costs. Last year, Bruno Mars’ performance cost $10 million and the NFL footed the bill.

In a recent press conference, Katy Perry promised her halftime show would be “larger than life.” Considering Bruno Mars kept it relatively basic, we have to reason that the NFL will be cutting her a check bigger than his $10 million. And as long as the NFL keeps handing out the money, what’s to stop artists from going bigger and bigger each year?

Factor 5: Even if Katy Perry’s breaks another record, NFL wont profit

That’s because all that advertising revenue doesn’t go to the NFL, but to the network broadcasting the event – in this case, NBC. This is part of their agreement to grant NBC full rights to the NFL season. It brings in about $5 billion for the NFL but how much of that is tied directly to the Super Bowl is unclear.

What’s clearer is that the NFL makes the majority of its Super Bowl revenue off of ticket and merchandise sales, which typically total at least $50 million.

While the NFL stands to make more money as more viewers are attracted to the Super Bowl, and a successful halftime show is a factor in attracting viewers, the increase in revenue they’ll see in correlation with the halftime show is diluted over various income streams and pretty intangible. The NFL can count the number of tickets sold, but the stadium will be packed whoever performs. The TV network and the artists are the ones really bringing home marginal gains from the halftime show.

So, with all this in mind, how much should Katy Perry pay to play the Super Bowl halftime show?

Based on the numbers we have, we’ll say $5 million – half of the show’s production costs. She can think of it as purchasing one Super Bowl ad for herself, covering the costs normally incurred by one of her performances, and then footing the bill for her and her crew’s travel expenses. The NFL can think of their part as an investment in maintaining a beloved institution.

And hey, either one could easily defray the costs with sponsorship deals. The real question everyone should be asking on Super Bowl Sunday: Will Katy Perry show up in a Pepsi t-shirt?

Greg Bouchard

Greg Bouchard is a former Content Marketing Manager at Firmex.