Losses from the Super Bowl Blackout?

Just what caused the 34-minute blackout at the Super Bowl and how will that affect the big game as it heads to the New York area next year?

By Joel Berg, a freelance journalist and college professor.

Some blamed Beyoncé. Others blamed infrastructure yet to bounce back from Hurricane Katrina. Now, eyes are on a piece of electrical equipment.

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But as investigators trace the cause of the blackout that disrupted this year's Super Bowl, they may not be able to connect it to any kind of loss -- at least to anything other than reputation -- according to observers in the insurance industry. That's because the 34-minute blackout at the Mercedes-Benz Superdome in New Orleans didn't appear to trigger much in the way of bodily injury, property damage or business interruption. It was just embarrassing.

"There's going to be a lot of finger pointing," said Tracy Tenorio, a senior vice president for ABD Insurance & Financial Services, a brokerage firm in San Francisco. But, she added, "I just can't really see what the damages are. The good thing is that the game went on."

And the TV audience appears to have stuck around to watch. Ratings company Nielsen reported that viewership during the blackout was nearly 107 million, a slight dip from the 108.7 million people overall who watched the Baltimore Ravens defeat the San Francisco 49ers.

"It maintained the audience," said Brian McCarthy, an NFL spokesman who declined to comment further.

The slight drop-off could be attributed to the loss of viewers in England, who might have figured the game was over, given the lead built up by the Baltimore Ravens, said Brian Kingman, managing director of the entertainment practice at Arthur J. Gallagher & Co. The eventual champions were ahead 28-6 after the start of the second half, which is when about half the lights went out in the Superdome.

If the blackout had lasted longer -- and CBS had been forced to switch to another program while the NFL rescheduled the game -- TV advertisers could have demanded refunds, Kingman said. "And then there's going to be other programming that's going to be pre-empted, and it's going to be a major forensic accounting nightmare to quantify the loss associated with the rescheduling of the Super Bowl."

A total blackout, meanwhile, would have raised safety issues and could have led to claims from falls and other accidents, Kingman said.

The lights came back on, of course. And the lull might have even boosted revenue, as idle fans got up to buy more beer and hot dogs.

"It's pure speculation, but it certainly makes sense logically," said Scott Johnson, an insurance coverage lawyer with Robins Kaplan, a law firm in Minneapolis.

Still, the outage was long enough -- and public enough -- to serve as a warning to those planning the next Super Bowl. Electrical power already was on the minds of officials in New Jersey. At a meeting in September 2012, the board of the New Jersey Sports & Exposition Authority awarded a contract for adding a third electrical feeder from a substation serving MetLife Stadium, where the next Super Bowl is scheduled to take place.

"This third feeder will substantially enhance the reliability of providing electricity to all facilities on the MetLife Sports Complex," according to the minutes of the meeting.

Officials in New Orleans also beefed up power systems before the big game. And those enhancements appear to be the source of the blackout. In describing the cause of the blackout, Entergy fingered an electrical relay device that was installed to help prevent outages and had functioned properly during recent high-profile events at the stadium, including college football's Sugar Bowl.

The device's manufacturer, Chicago-based S&C Electric Co., said in a statement that the relay may have been set incorrectly: "Based on the onsite testing, we have determined that if higher settings had been applied, the equipment would not have disconnected the power."

At least the Superdome had a roof. Next year, the weather will be a wildcard at the Super Bowl which is in East Rutherford, N.J., -- and subject not only the icy cold of February but also to an area that has suffered several severe storms over the last few months. The NFL is even putting together a contingency plan to move the game to Saturday February 1 in the event of a crisis, rather than its scheduled date of Sunday February 2, according to news reports.

"If all of a sudden 'Sandy II' looks like it's going to hit the day of your game, somebody's going to have to be making some really, really tough choices," said Chris Rogers, risk control director for the national entertainment group at Aon Risk Solutions. "Most likely, it would be a postponement or a delay, and I'm sure there are contingency plans for that in place."

For fans, that could mean stocking up on travel insurance in addition to hats and gloves.

February 12, 2013

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