We’re in the thick of the winter holidays now, which means it’s officially impossible to turn a corner without seeing some manifestation of Santa—on the side of a bus, a product’s packaging, ringing a bell for Salvation Army donations. But while he may be everywhere, there’s still a lot of mystery surrounding the jolly man.
What time does he have to leave the North Pole to deliver presents on Christmas Eve? Do the elves manage to produce all those toys in a 40-hour work week? How much does it cost to deliver presents to so many children?
We don’t have all the answers. But we did work with Erin Carmody, PhD, professor of mathematics at Fordham University, to figure out what Santa probably shells out to deliver toys to American kids—and, just for fun, if anyone else in the world is rich enough to take over his job one day.
What are the operating costs of Santa’s Workshop?
To figure out how much St. Nick spends to keep his workshop running smoothly, Carmody began by calculating the average cost per child served:
= 66.4 million American children served by Santa’s Workshop
Let’s assume Santa makes goods at a wholesale cost with the toy and game industry’s average markup of 52 percent, and each child receives approximately $330 worth of gifts. The average cost for one child’s toys would be: $330 ÷ 1.52 = $217.11
Multiply that by 66.4 million children, and you’ve got $14.4 billion in annual operating costs.
How about labor and shipping?
Ordinarily, the cost of labor nudges overall operating costs up quite bit—but since Santa’s elves are building toys out of the sheer love of the job (we think), we’ll assume they’re already covered for basic lodging and pointy hats.
One huge bonus: Thanks to Santa’s magic sleigh, shipping costs are also a moot point. If the Big Guy had to shell out for UPS trips from the North Pole, it would run him roughly $200 extra per kid—that’s the cost of sending five 1-pound packages from Anchorage to New York City—bringing operating costs up to $27.7 billion.
The expense of maintaining a fleet of eight reindeer is negligible (around $24,000 a year, extrapolated from average equine care output), so Santa’s Workshop costs in this model are still about $14.4 billion a year.
Who could afford to be Santa?
At an annual cost of $14.4 billion, not too many people. But the 99 richest people in the world are all wealthy enough, according to the Forbes Billionaires List; the 99th richest person in the world, Viktor Vekselberg, actually had a net worth of exactly $14.4 billion for 2018. (But after just one year of Santa operations, he’d be financially tapped.)
The current richest person on Earth, Jeff Bezos, had a net worth of $112 billion for 2018—enough to last at least seven Santa years without any additional income. The second richest person, Bill Gates, could afford to be Santa for six years with his current net worth.
The fact that Santa’s incredible holiday generosity can realistically be replicated by normal people using giant piles of cash may take away some of the magic, but keep this in mind: None of those billionaires look nearly as good in a big red suit and hat. Except maybe Elon Musk.
December 17, 2018