Is Macy’s Thanksgiving Parade Its Most Valuable Asset?

The 166-year-old chain, which is fighting extinction, calls the parade its “gift to the nation.” With 30 million TV viewers, it’s also a big moneymaker. At least we think it is — Macy’s is famously tight-lipped about parade economics. We try to loosen them up. (Part one of a two-part series.)

This article comes from Freakonomics Radio. You can listen and follow our weekly podcast on Apple Podcasts, Spotify, or elsewhere.

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I really only started paying attention to the Macy’s Thanksgiving Day Parade about 10 years ago, when my family and I moved into the neighborhood where the parade starts, and where the night before, they stage everything. This is on the Upper West Side of Manhattan. They take over two extra-wide streets to lay out the giant balloons. Each balloon arrives folded up flat, in its own small rolling cart. It gets unpacked, unfolded, laid out on the pavement — and then comes the helium. There’s a truck nearby with big helium canisters stacked horizontally on a rack. Up close, the balloons are really big. You see this as soon as they start drinking up some helium, and puff up to full size. But tonight is Wednesday, the night before the parade — inflation night, they call it — so the balloons aren’t allowed to rise to parade height. Each one has a net thrown across the top, and the net is held down by sandbags. If you happen to be passing by on foot, this can provide an unusual view of your favorite balloon character — a bulging eyeball, a massive derriere, some very chubby fingers.

Many thousands of people come see the balloons on inflation night. It is an unusual and joyful scene — for the visitors and the locals. For many people, myself included, it is the best New York night of the year. A lot of people who live on these blocks throw inflation parties up in their apartments, and when you look straight down out of your window, you get another unusual, and wonderful, view of the balloons. I’ve watched this whole operation for several years now, and every year I’m a little bit more impressed. The parade people execute the mission with a blend of military efficiency and childlike glee. You can’t help but marvel at how much planning must go into it. Also, how good the execution has to be — not just from the parade side of things but from the city side and the broadcasting side. And it’s not like they have weeks, or even days, to set up. On Wednesday morning, the streets are normal, full of cars, trucks, jaywalkers, dogs, bikes — and then the balloon people come, and you get to see the real, up-close version of the thing that everybody else has to watch on TV, in miniature. The cleanup begins as soon as the last balloon enters the parade, on Central Park West, and by the time they reach the Macy’s flagship store, down in Herald Square, our streets are back to cars and trucks again — although not so many, since it’s still Thanksgiving morning.

Like I said, it’s only recently that I began paying attention to the parade. I do remember it being on TV when I was a kid but, I dunno, I guess I just wasn’t a parade person. Seeing it up close made me curious, and after last year’s parade, I took a look at the TV ratings. Holy s***! Nearly 30 million viewers. Another three-million-plus watch in-person, from the sidewalks and grandstands. But the TV numbers blew me away. As you may know, the television juggernaut these days is the National Football League; of the 100 most-watched broadcasts last year, 93 were NFL games. The Macy’s Parade was one of the remaining seven, beaten out only by the State of the Union address. A TV audience of 30 million must generate a lot of ad revenue, and then I got to wondering: how much? Then I got to wondering how much it costs to produce the parade. Simple questions, right? As it turns out, not so simple. Macy’s is one of the oldest department stores in the U.S., and it has a lot of traditions. One of those traditions is not talking about the economics of its Thanksgiving parade. They like to call it their “annual gift to the nation,” and we all know it’s not polite to ask how much a gift costs. But today on Freakonomics Radio — we ask anyway.

Tony SPRING: Why? Do I need to know how much Lion King cost to produce? 

This is the first of a two-part series. We will look into the cost of the raw materials.

Will COSS: We do have our finger on the pulse of helium.

We’ll look at how New York City pitches in.

TOLSON: I don’t know how you guys found me, by the way, because most people don’t know I exist. 

We will hear from the C.E.O. of Macy’s, who’s trying to keep an old store alive when so much retail is dying.

SPRING: I want to be perceived as giving this gift to the city and to the nation. I also want to do a lot of business.    

And we ask an industry expert what Macy’s stands for today.

Mark COHEN: Macy’s doesn’t stand for anything today.  

So come along as we drink the helium and wonder if the Macy’s parade may be the most valuable asset Macy’s has?

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We are hardly the first people to wonder how much it costs to stage the Macy’s Thanksgiving Day Parade. There are published estimates, ranging from around $10 to $15 million. But they’re just estimates, and it’s unclear where those numbers come from. Which makes sense: Macy’s doesn’t like to talk about it, and therefore it’s hard to even identify all the costs. It’s also hard to quantify the benefits. Keep in mind that most of the balloons and floats in the parade are sponsored by big brands that are presumably paying big money for the millions of eyeballs that will see them. And the parade itself is one big ad for Macy’s. But let’s start by focusing on the costs. There is of course the expense of building and maintaining the balloons and floats; there’s the casting and wrangling of the marching bands and other performers, and there are all sorts of city services — police and sanitation and counterterrorism — that somebody is paying for; and then there are all the personnel costs for the Macy’s parade unit, which is a year-round operation. So we figured we might as well start at the source.

COSS: Will Coss. And I’m the executive producer of Macy’s Thanksgiving Day Parade.  

And what does Will Coss actually do?

COSS: The executive producer oversees the entire production of the parade, from our balloon and float design, construction, fabrication, and delivery to New York City on parade day to all of the logistics as it relates to shutting down three-and-a half-miles of New York City on the busiest travel day in New York.  

Coss grew up in New York, in the Bronx, and he went to college nearby, on Long Island.

COSS: I traveled really far.

Coss now lives on the Upper West Side with his wife and daughter. He’s 44 years old. He started out as a producer for MTV, Nickelodeon, and YouTube, and he got the Macy’s job in 2021. But he sounds like a lifer.

COSS: We are part of the tradition of Thanksgiving morning for millions of people. If you love marching bands, we’ve got that. If you love giant balloons, we’ve got that. We’ve got floats. We’ve got celebrity. We’ve been a staple. Whether you’re sat in front of the television or have it on in the background just using us as the soundtrack to your Thanksgiving morning, we’re there. 

Macy’s itself was founded in 1858 by Rowland Hussey Macy, a former whaler from Nantucket. He ran dry-goods stores in Massachusetts and California before settling in New York City. They sold everything from clothing and furniture to groceries and books. By 1902, according to one history of the store, “The human wants were few indeed that the Macy store could not meet.” By 1924, the Macy’s flagship store in Herald Square was the “world’s largest store,” with over 1.5 million square feet. That year, Macy’s sponsored its first parade — a six-mile march through Manhattan. It featured “three horse-drawn floats … four professional bands, and … camels, elephants, bears borrowed from the Central Park Zoo.” In these early days, Macy’s released big helium balloons into the sky after the parade and offered a $100 reward for their return. That tradition ended in 1932, when a novice pilot, going for the reward, crashed into a balloon in the sky. It has now been 100 years since the first parade, although this year’s edition is only the 98th, since they took three years off during World War II. The parade today looks a lot different than it used to. When there are 30 million people watching on TV, appearances matter.

COSS: We are the largest televised variety show of the year. There’s something about the work that we do that connects multi-generational. It’s a responsibility that we don’t take lightly, knowing that we have that impact on so many folks.

That is Jen Neal. 

NEAL: And I oversee the strategy, the creative development, and the operations for all of our live events and specials across N.B.C.U. 

NBCUniversal is the network that has carried the Macy’s parade for 71 years. Neal’s team produces roughly three dozen big live events a year.

NEAL: Christmas at Rockefeller Center, New Year’s Eve, the People’s Choice Awards, red carpets around Hollywood’s biggest nights, like the Grammys, the Oscars. My role focuses on the entertainment side, but we have incredible teams on the sports side that do the Super Bowl and the Olympics.  

That’s Will Coss again.

COSS: My full Macy’s Studios team is over 65 full-time folks that range from our partnership team to our creative team to our studio production team, logistics, project management, production management. The 65 number is our full-time. As we get closer we expand considerably. 

In other words — yes, the Macy’s Thanksgiving Day Parade is a parade but unlike a memorial parade or a victory parade or a pride parade, this one is plainly a commercial venture — a marketing venture.

NEAL: If you have a Minions float, you’re definitely going to talk about Stuart, the Minions, and the frantic bananas. Ronald McDonald, Smokey the Bear, all of these are traditions and floats that have their own unique messaging, from forest fires to fundraising for children’s hospitals to the Wondership float.  

We did later find an estimate from Vivvix, a company that tracks commercial ad spending; they report that brands spent $76 million to advertise on NBC during last year’s parade broadcast. Macy’s would — as the saying goes — neither confirm nor deny. And that TV revenue presumably wouldn’t include money the brands pay Macy’s directly for the rights to sponsor a balloon or a float. Although we should say — not every balloon or float is bringing in sponsor money, because some of them are promoting Macy’s itself. Here’s Will Coss again:

COSS: Tom Turkey and Santa are Macy’s-owned and are the iconic elements that open and close the parade.  

Well, maybe not quite members-only but it’s a small club. This year, there are 17 giant balloons in the parade. Sadly, the Freakonomics orpple is not one of them. But this guy has one.

Jeff KINNEY: I pinch myself when I see the balloon fly down the main avenue there. 

That is Jeff Kinney.

KINNEY: I’m an owner of An Unlikely Story bookstore in Plainville, Massachusetts, and I am the author of the Diary of a Wimpy Kid series.  

This year will be Wimpy Kid’s 14th consecutive Macy’s parade. That puts him on the all-time leaderboard, but he’s still way behind Snoopy, with 43 appearances, and Pikachu, with 24. Kinney told me that a balloon typically lasts three to five years; he is now on the third version.

KINNEY: I think we’ve gotten better and better at it. And now Greg really looks exactly like I’d like him to look.

Since Jeff Kinney’s first Wimpy Kid balloon, the Macy’s Parade Studio has moved from Hoboken to nearby Moonachie, New Jersey. And rather than clay, balloon modeling now is done with 3-D printers. Coming up, let’s go to Moonachie!

COSS: Welcome to Macy’s Studios. 

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Will Coss, the parade’s executive producer, met us at the Macy’s Parade Studios in Moonachie, New Jersey, just a few miles across the Hudson River from Manhattan.

COSS: This is our 3-D printing room. So this is Diary of a Wimpy Kid. 

We are looking at a three-foot plastic model of Greg Heffley.

COSS: We’ve got our character here actually laying on the table at the moment. But if he was sitting in flight position, he would be pointing at the stinky cheese, which will be preceding him down the line of march.

We’re inside a sprawling brick-and-glass building that, from the outside, looks like an office building. But inside, it’s a 72,000-square-foot warehouse, with 44-foot ceilings and a variety of workshop stations. It’s also a little bit noisy.

COSS: The floor that we’re standing on right now is our fabrication floor.

As we walk through, Coss points out some floats under construction — including a new float representing the Bronx Zoo.

COSS: So, we’ll have giraffes, we’ll have tigers, we’ll have gorillas, birds.

These giraffes and tigers are not real, the way they would have been back in the beginning.

COSS: Every element that you see here being sculpted by our very, very talented artists start as a block of foam. We’re going to walk over to meet the legend himself, Mr. John Cheney. 

John Cheney is a carpenter who has worked on nearly 50 Macy’s parades.

CHENEY: I came to New York, and I wanted to be an artist, so I went to the Art Students League, and in a few months, I started running out of money. But my dad used to always have the parade on, and I’d met some girl who wanted to work in the costume shop. So, I said, I’ll just walk over to Macy’s and see what’s happening. Fifty years ago, it was a lot different than all the paperwork now. They had this hiring rail, you got up to the rail and there were all these kids around with very nice suits and everything, and I got ripped up jeans and a t-shirt on. I said, “I want to work the parade.” And that’s how I got hired.

And how does it feel for Cheney to work year-round on something that will be seen for just one day?

CHENEY: Well, millions of people see it. So, the exposure is really great. But there is something mind-boggling about doing all this work for one night, and setting it all up in one day and now taking it down. I guess that’s part of the pressure. You have this incredible deadline and we work all night in the beautiful weather because we don’t even dare say that other word. The week before is maybe the hardest time. It’s like getting into the water. You know, once you’re in there — damn it, we’re doing it, I don’t care what’s going wrong. Let’s go! 

Cheney is one of a couple dozen members of a team of carpenters, sculptors, welders, electricians, costume designers, and what are called “balloon technicians.” Here’s Will Coss again:

COSS: Right now, we’re on the balloon studio floor. Once our balloons are flattened, they make their way over to our heat-sealing tables. And this is essentially a sewing machine, but instead of a needle and string, it’s actually melting the two pieces together. And we actually have a balloon in process right now. This is Marshall, our PAW Patrol pup.  

Marshall is a firehouse Dalmatian from the animated kids show PAW Patrol.

COSS: So Marshall is presently rigged to one of our rigging points in the ceiling.

At this point, he just looks like a big, white, round blob, with no distinguishable limbs; that’s because of how these giant balloons are built.

COSS: The head right now is the chamber that’s inflated. The rest of the balloon is deflated because we’re working specifically on the head unit. And that’s how all of our balloons are fabricated. They’re fabricated into chambers, which gives us some flexibility if we do run into a situation on parade day to quickly try to remedy that one specific area without it compromising the integrity of the entire balloon. 

Jeff Kinney had told us earlier about a mishap with the Wimpy Kid balloon.

KINNEY: Yeah, I think Greg’s hand popped this last year, and it looked a little bit sad. But these things happen. 

Marshall, the Dalmatian, is a new balloon in this year’s parade, one of six. All the new balloons will need to have a dry run, outdoors, before the parade.

COSS: Our volunteers, our balloon handlers and our flight management team have an opportunity to see the balloons working in real time and reacting in wind conditions, and take notes and prepare for Thanksgiving Day. 

This dry run is called Balloonfest. It happens in the parking lot of MetLife Stadium in East Rutherford, New Jersey, about four miles from the Macy’s studio in Moonachie. Balloonfest is always held on the first Saturday of November.

MACY’S STAFFER: Good morning, everyone. Welcome to Balloonfest. 

There are several hundred volunteers to handle the balloons; on parade day, there will be 5,000 parade volunteers.

MACY’S STAFFER: Okay, I need 20 handlers.

The six new balloons — including Marshall and Minnie Mouse and a new Spider-Man — they’re already inflated, and held down, under a net, with sandbags. When the time comes, the sandbags are taken away, the nets are pulled off, and the volunteers slowly unroll the thin ropes that are attached to what they call the handling bones, which are plastic, X-shaped grips. 

VOLUNTEERS: Here we go. Two, three, four, five, six, seven, eight, nine, ten. 

Once the balloons are up in the air, the volunteers walk them around the parking lot. Will Coss is paying close attention; everything looks good. Nearby is the helium truck. Here’s the helium guy:

Kevin LYNCH: The trailer is about 40 feet long. There are 12 high-pressure steel tubes in there. If you can get all the helium out of each one of those tubes, you could fill about six to eight of these balloons with a single trailer.  

His name is Kevin Lynch.

LYNCH: I’m the Vice President of Global Helium for Messer.  

Messer is one of the big players in the helium market. It, and the companies it has acquired, have been providing helium to the Macy’s parade for decades.

LYNCH: The helium that’s here today started in an underground helium reservoir in Amarillo, Texas. And here we are filling balloons. But if you put too much helium in it, that whole crew of people would be rising up into the sky.

Lynch tells us that each giant balloon takes around 15,000 cubic feet of helium. So, how much does that cost Macy’s?

LYNCH: I can’t tell you that. We can’t talk about sensitive commercial topics out here. 

The price of helium itself is not a particularly sensitive topic. Helium used widely in medical settings and elsewhere, and there’s a strong global market for it; believe it or not, giant balloons consume only a tiny share of the helium market. We did a rough calculation of what it would cost to fill the 17 balloons in this year’s parade if you paid market price: it was around $425,000.  I asked Will Coss if this sounded about right, but he wouldn’t take the bait. I also asked him what Macy’s does about the occasional helium shortage.

COSS: We do have our finger on the pulse of helium. It’s a market that adjusts over time, but we plan for it and we have good relationships with our vendors across our helium supply teams. 

So far, we’ve heard from the key people who create and broadcast the Macy’s parade, but there is one more partner — sort of a silent partner — without whom it could not happen:

TOLSON: If there were no permits, it would be a free-for-all. 

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Yes, there are giant character balloons drifting through the sky. And yes, there are floats, and marching bands, and Broadway performers. But the real star of the Macy’s Thanksgiving Parade, if we’re being honest? Come on, you know who it is. It’s New York City.

TOLSON: My name is Dawn Tolson, and I’m the executive director of Citywide Event Coordination and Management and the Street Activity Permit Office. And those are a lot of words. 

Tolson has worked in New York City government for a decade. Her office issues permits for many types of events: street fairs and farmers markets, festivals — and of course the Macy’s Parade. We told her we were trying to put together the costs of the parade, and she did give us a little bit of pricing information. 

TOLSON: An application fee is nonrefundable, and that’s $25. And then it ranges from zero — no cost whatsoever — up to something that could be $66k per block, depending on the use of space and the impact. 

The Macy’s parade uses 40-plus blocks, and it is undeniably high-impact. Does that mean that Macy’s pays the city something like $3 million — 40-some blocks times 66k per block?

TOLSON: Oh, I can’t say how much they pay. Good try. Macy’s is a partner with the city. They put on two very iconic events in New York City that are birthdays and holiday events for America. 

The other one she’s talking about is the Macy’s 4th of July Fireworks — which, no offense to fireworks, is nowhere near as big a deal as the parade.

TOLSON: And so, we know the importance of that, and we work with them. But I can say that they do work really hard with us to make sure that we are very cognizant of the amount of resources that we’re using, that we’re not overextending, that we’re also being fair to the employees and the workers. 

When Tolson talks about the resources the city is using — these are serious resources, including law enforcement and emergency crews. Here’s Will Coss again, from Macy’s.

COSS: The security plan is a quite detailed plan.  

You could imagine if you were throwing a parade for three and a half million people on the sidewalks and 30 million watching a live broadcast that you would invest a lot in security planning and execution.

COSS: There’s a variety of personnel that are visible on the parade route, and other layers of security that are less visible.

And what does it cost to “enact the entire N.Y.P.D”? And how much of that comes from Macy’s? The parade, for all its goodwill and vibes, is a commercial event. So you could imagine Macy’s contributing heavily to the city services. On the other hand, even if you don’t buy my argument that New York City is the real star of the show, the city does get a lot out of the parade. When I was a kid and I saw the parade on TV, I barely noticed the floats and balloons; I was staring at Central Park West. To a farm boy, which is what I was, the balloons and floats were cute; but the fantasy was New York. So does New York City kick in all those resources for free for the Macy’s parade? Does the cost of the permit itself cover all these services? Those are questions that no one would directly answer, on either the city side or the Macy’s side. And there are other city resources to talk about, other city agencies that get involved.

TOLSON: We have four walkthroughs with all of those agencies, as in we’re walking the route four times. In New York City — the city of scaffolding — there’s a lot of obstructions along the path. And so we have to walk that path to see what construction is going on, what potholes are in the street, what is up above.  

Streetlamps, for instance. In 1997, the parade was held on a very windy day. At Central Park West and 72nd Street, the six-story-tall Cat in the Hat balloon hit a lamppost, and knocked off part of it. Several people were injured, including one woman who was in a coma for 24 days. Macy’s and the city now work together to prevent that kind of thing. Will Coss again:

COSS: All of our balloons and floats are starting up at 77th Street and all the way through 34th Street, that entire parade route has to be cleared of any aerial obstruction. 

This clearing process includes what Coss calls “light swings.”

COSS: We have a team to physically move all of the light poles out of the way. So they’re loosening them and then we’re actually swinging all of the poles. It’s done under the dark of night.

And Dawn Tolson again:

TOLSON: Sanitation — we haven’t even talked about sanitation. I didn’t know this until a couple years ago, that there’s a special unit that deals with the horse refuse. 

This “horse refuse” comes from the N.Y.P.D. and Parks Department mounted units that march in the parade.

TOLSON: So, we forgot to call them one year. It was not pretty.  

That is Jessica Tisch. When we spoke with her, she was New York’s sanitation commissioner.

TISCH: We have one to two sanitation workers for every four to five horses. 

Tisch has just been named commissioner of the N.Y.P.D. As sanitation commissioner, her job was to make the parade route as photogenic as possible on Thanksgiving day from 8:30am Eastern Time until noon.

TISCH: Those streets, about 42 blocks, they need to sparkle because New Yorkers and people from around the world all converge on that part of the city. And we want those streets to look really good. After the parade is obviously a huge effort. We have about 150 sanitation workers who are involved in the post-parade cleanup. They are doing manual cleaning with brooms and baskets, but also our mechanical brooms, which can sweep 1,500 pounds of litter, are out in full force. About 71,000 pounds of trash is collected by the Department of Sanitation as part of the cleanup of the Thanksgiving Day parade. 

Once again, we couldn’t learn anything significant about how these costs are allocated, or perhaps shared. New York City plainly derives value from the parade — there’s the marketing value of the broadcast but also: three-and-a-half million in-person spectators generate a lot of economic activity. How much? Those numbers, too, are — shock of shocks — hard to come by. If we began this episode hoping to run even a rough cost-benefit analysis of the Macy’s Thanksgiving Day Parade, we have failed. Too many of the costs are privately held. We can guesstimate the overall TV ad revenues, but we don’t know how that money is split between Macy’s and NBC and whatever agencies or other middlemen are involved. So we took one more shot. We asked to speak to the man at the top.

SPRING: Tony Spring, chairman and C.E.O. of Macy’s Inc. 

Okay, so the Macy’s parade is still relevant. Here’s the bigger question, especially for Tony Spring: is Macy’s still relevant? Coming up next time, in part two of our series: brick-and-mortal retail has been declining for years, and Macy’s is planning to close 150 of their stores. Tony Spring took over less than a year ago, and he is pushing for a renaissance. At least he’s optimistic:

SPRING: Now is the time to buy Macy’s. 

Next time, we go deep with Tony Spring — and we get another view too.

COHEN: Macy’s has a hell of a challenge over the next few years to remain upright, let alone become successful as they once were. 

We also visit Wimpy Kid author Jeff Kinney up in Massachusetts, where he is trying to launch his own retail renaissance:

KINNEY: If you invest in your downtown, can you change the fate of a town? And I don’t know the answer to that.

That’s next time on the show. Until then, take care of yourself and, if you can, someone else too. Also: if you want to learn more about helium, be sure to follow another podcast we make, The Economics of Everyday Things. Host Zachary Crockett went deep on helium supply and demand in an episode that will be out very soon.

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Freakonomics Radio is produced by Stitcher and Renbud Radio. This episode was produced by Alina Kulman;  We also had recording help from Alexander Overington; and special thanks this week to Thomas Recupero, for the research paper, and to Harlan Coben. Our staff also includes Augusta Chapman, Dalvin Aboagye, Eleanor Osborne, Ellen Frankman, Elsa Hernandez, Gabriel Roth, Greg Rippin, Jasmin Klinger, Jason Gambrell, Jeremy Johnston, Jon Schnaars, Lyric Bowditch, Morgan Levey, Neal Carruth, Rebecca Lee Douglas, Sarah Lilley, Theo Jacobs, and Zack Lapinski. Our theme song is “Mr. Fortune,” by the Hitchhikers; our composer is Luis Guerra.