Santa’s Net Worth
Written for Bankrate.com
Every year American kiddies hand Santa Claus their wish lists in complete trust that he can deliver. Meanwhile, their parents endure the lines because Mr. Claus’ willingness to fill the small fry’s requests frees up the family budget enough to gift Aunt Millie with a poinsettia or another bag of gourmet brownie mix.
By Julie Sturgeon
To date, he rarely has disappointed either audience. But curious minds eventually have to ask: Exactly how is the jolly fat man financing these requests, and at what point does the gravy train stop?
Bankrate peered into Santa’s balance sheet, and the surprises we uncovered there should leave every believer muttering, “hmmm, hmmm, hmmmm” this season:
Income
Since the 1950s, Santa Claus has found gainful employment at shopping malls across the United States, grinning for the cameras while hugging everything from screaming tots to drooling dogs. But the photography companies pocket the profit from those pricy picture packages – Santa is actually an hourly employee at the 1, 130 enclosed malls in this country.
According to the International Council of Shopping Centers, Santa reported for work at a majority of these locations in 2005 on November 25, which gives him 29 days of employment. Because 91 percent of the malls extend their shopping hours during December, it’s a safe bet he’s on duty 10 hours per day, even with two meal breaks, for a time card of 327,700 hours. Then, of course, he has his traditional haunts: Macy’s on 34 th Street in New York, and rival Bloomingdale’s uptown. Not to be outdone, South Street Seaport has also jumped into the fray demanding his presence, so add another 546 hours.
That means Santa should bank $1,690,466.90 at the federal minimum wage of $5.15. However, a few years ago, this savvy dude capitalized on years of experience (not to mention real beard) and negotiated an average salary of $8,000 a year with the photography vendors, so in reality he’s bringing home $9,040,000.
And because Christmas boils down to seasonal work, he has begun offering to entertain at awards nights, conventions, birthday parties and casinos throughout the year, commanding hefty fees between $1,200 and $10,000 per job. A couple of these gigs a month would pull in roughly $224,000 in extra cash throughout the year.
Turns out, that’s not chump change in Santa’s empire. According to Steve Weinberg, a shareholder with Greenberg Traurig law firm in Los Angeles, the holiday icon has no claim to any royalty income. For starters, his history is a bit too murky for a lawyer to establish intellectual property rights to the roly-poly, eye-twinkling, gift-giving image. Over the centuries, Santa’s identity has merged with Nicholas the Gift Giver, a sidekick to the Christ Child, St. Nicholas sans the red costume in Washington Irving’s tales, and Kris Kringle.
Haddon Sundblom created the current character known as Santa Claus as an advertising campaign for Coca-Cola in the 1930s, so the soft drink company actually holds a stronger case for the money than Mr. Claus himself.
“And assuming we could make the case he owns his reputation, he’s really given it up to the public domain,” Weinberg points out. “In IP law, if you don’t exercise control over other people’s uses of your reputation, you end up essentially abandoning your right to claim royalties.” Santa’s failure to send cease and desist letters to Tim Allen for portraying him in the movies was the final mistake.
Bottom line: Santa earns $9.264.000 annually. Weinberg’s former clients, the Muppets, are actually richer than Santa.
Expenses
Santa’s gift-giving extravaganza certainly has come a long way from the days Ralphie yearned for a Red Rider bee-bee gun. Twenty-first century kids crave everything from interactive musical chairs to PlasmaCars. Using Dr. Toy’s lists of top toys in 2005 for infants through age six – face it, after that they stop believing in Santa so the big guy is off the hook – we determined the average price per toy – one request per customer, please. The damage looks like this:
Age Average cost per present Number of children per U.S. Census Bureau Total dollar cost
0 – 2 $22.90 8,137,000 children $186,337,300
3 – 4 $50.29 8,077,000 children $406,192,330
5-6 $48.37 7,810,000 children $377.769,700
So Santa spends $970,299,330, which qualifies him for the free shipping deals. Lest you think him a spendthrift, these prices also reflect the lowest available on comparison shopping internet sites; and he has been known to shave a few additional bucks by watching the Sunday newspaper ads.
The staff at InsureMyTrip.com say baggage coverage for these presents would be written as a cargo policy through Lloyds of London, priced at 15 percent of value, so he needs to budget $145,544,899.,50 for the journey. On the other hand, “Santa’s never missed a Christmas, even when Rudolph’s nose was on the blink, so trip cancellation coverage is not an issue,” says Vikki Corliss, a spokesperson for the internet site.
With bird flu and other crazy diseases flying about, medical and medical evacuation coverage are critical this year. He can lock in a $2 million medical and $2 medical evacuation policy for a mere $129 premium. Corliss says her company would be pleased to cover the cost of the personal policies in exchange for an InsureMyTrip.com logo on the side of Santa’s sleigh.
He needs to consider the endorsement – after all, the volunteer group of seniors in Santa Claus, Indiana, save him $3,700 a year that he’d otherwise have to spend on postage answering the letters from children who choose this route over the more popular email route.
The sheer volume of presents means Santa’s elves need to work extended hours to handle the receiving logistics at the warehouses. While seasonal wages tend to be lower than salaries, Dan Maddux, executive director for the American Payroll Association, is very conscious of the fact the North Pole’s –31 degree winter temperatures puts a damper on recruitment. As a baseline, Maddux estimates Santa pays each elf $1,624 in bi-weekly salary. “Since the elves are under Santa’s control and direction, and work onsite at the workshop, they are considered seasonal, hourly employees rather than independent contractors,” he adds. That means Mr. Claus must also pay employment taxes and provide worker’s compensation.
And let’s face it, if Macy’s had to hire 12,000 seasonal workers across just its Western division this season, Santa needs to at least match that number.
So over the five-week frenzy, he must budget $ 5,237,40 in payroll needs.
Finally, tired of the same old scenery, Santa Claus indulged in a summer home in – where else? – North Pole, Alaska, this year. He secured the four acres on Lot 3 on Santa Claus Lane from a ReMax Realtor at $1,425,283 and built a six-bedroom, 5,300-square-foot home valued at 550,000 in the neighborhood. A 30-year mortgage loan for the $1.975,283 at 6 percent with 5 percent down means he has to cough up a $11,250.67 monthly payment, or $135,008.04 on the year.
His dimples won’t be so merry when his calculator determines that he owes $1,121,216,637.04 -- at least $ 1,111,952,637.04 than he makes. That’s serious bankruptcy material, and he has yet to feed his reindeer.
Tara-Nicholle Nelson, M.A., a licensed real estate broker and attorney in Oakland, California who owns Tierra Real Estate and Mortgage Services, offers Santa one small option. She sized up the value of his current workshop at the North Pole -- which includes a 3,000-square-foot single-family residence with special features like a gourmet chef’s kitchen, a campus that houses 2,5000 bed dormitories, a 500,000-square-foot warehouse and stables -- against similar properties in Alaska and determined that he is sitting on $39,745,720 worth of property.
“He has to find other work if he wants to make money, “Weinberg says flatly. “Maybe he can be the next Harry Potter character, but of course this is only one Jewish guy’s opinion.”