Americans spent $14.1 billion on purchases related to the Super Bowl last year. Trade groups and the NFL portray the biggest event in American sports as a holy grail of economic stimulus. The 10 days surrounding last year’s Super Bowl gave Houston hotels 337,000 room nights populated by tourists who spent an average of $502 per day in Greater Houston, instead of the $130 spent by the typical Texas tourist.
But as Super Bowl LII draws near, local governments and taxpayers have to consider if that cash infusion is worth it. The reality is that cities have to pay to play, even though the cost of hosting the Super Bowl is often overshadowed by the potential for a positive Super Bowl economic impact.
Click through to learn why cities are so eager to host the Super Bowl, and why billionaires are so eager to own an NFL team.
No one can argue that the Super Bowl is big business.
There is a legitimate debate surrounding the true economic impact that Super Bowls have on host cities, but one thing is not open for discussion — an astonishing amount of money changes hands.
During last year’s Super Bowl LI in Houston, for example, 150,000 visitors flooded into the city, according to a report by Rockport Analytics. Those visitors paid tens of millions in state and local taxes, supported more than 4,000 jobs and spent $428 million that created an economic ripple effect of $102 million.
Economic impact reports reflect the biases of the organizations that compile them.
All kinds of organizations — including trade groups like the kind that represent the hospitality industry, prospective host cities, independent economists and the NFL itself — release reports detailing the potential economic impact of a Super Bowl. These reports vary wildly depending on who writes them. Organizations that have a vested interest in the big game coming to town are known to greatly exaggerate the potential for profit. Host committees often predict the largest possible impact to try to convince skeptical taxpayers to foot part of the bill. The NFL inflates the potential impact to sway governments to pick up as much of the tab as possible.
Some reports inflate numbers by including unrelated profits.
One way that groups misrepresent the potential benefit of a Super Bowl is to pack economic impact reports with money that isn’t related to the event, would have been spent anyway or doesn’t actually benefit the city. This distracting economic filler includes the amount of money visitors spend on air travel, money spent by residents who already live in the city, money that tourists spend outside of the city or money spent on tickets to the game itself.
Yes, Super Bowl ticket prices have skyrocketed, but host cities definitely can’t lay claim to any of that money.
Other reports inflate numbers by leaving out revenue reducers.
Some organizations that support the Super Bowl inflate the potential for profit by including revenue not directly tied to the event. Others make the numbers appear rosier not by adding extra dollars, but by ignoring factors that detract from the host city’s windfall. In some cases, these reports fail to subtract NFL tax exemptions. In other cases, they don’t account for “displaced tourism,” which refers to regular tourism dollars that aren’t spent when the Super Bowl is in town.
Minneapolis is hosting this year’s Super Bowl, so visit one of these cities instead for affordable winter travel.
Super Bowls go to cities with new, expensive stadiums.
According to Bisnow, all but three of the nine Super Bowls scheduled between 2011 and 2019 were — or will be — played in stadiums that are fewer than four years old. The NFL incentivizes cities to build expensive modern stadiums, and cities often cite the potential for landing the Super Bowl as a key factor in the decision to construct a new stadium, much of which is financed by taxpayers.
Cities have to spend money for the chance to earn money.
According to MarketWatch, the city of San Francisco had to make big sacrifices just to be considered for Super Bowl 50, including having its NFL team, the 49ers, leave San Francisco itself for nearby Santa Clara, where taxpayers were more receptive to spending nine figures toward a new stadium. The city’s stadium authority spent nearly $1 billion, which it hopes to reclaim through stadium naming rights.
San Francisco was not alone. Cities such as Glendale, Ariz., Minneapolis and East Rutherford, N.J., all reportedly spent small fortunes on things like transportation, public safety, rebates to the NFL and the obligation to play a “home” game the following year in London.
Money flowing in doesn’t always flow down.
In some cases, the big money Super Bowl tourists spend never makes it to the people who helped earn it. For example, large chain hotels often jack up the cost of a room — tripling or even quadrupling rates in many cases — without increasing the wages paid to the local residents who work in those hotels.
Save money even when room rates are high — see what things your hotel will give you for free.
The NFL is a high-maintenance organization.
A document uncovered by the Minneapolis Star-Tribune in 2014 showed just how far this year’s host city had to go to secure its spot. The NFL’s previously confidential demands — which Minneapolis had to agree to just to be considered for the Super Bowl — included 35,000 free parking spots, free billboards throughout the region, free police escorts for team owners, free presidential suites in luxury hotels and an automatic claim to 100 percent of ticket sales revenue. In total, the league’s list of demands ran 153 pages long.
Super Bowls buy lots of civic pride and public exposure.
Whether the economic benefit to the host city is worth the massive expenditure, there is no doubt that cities benefit when their skylines, landmarks and names are repeatedly broadcast during the biggest television event in the country. Hosting the big game can also go a long way toward boosting the city’s self-esteem and bragging rights.
After Hurricane Katrina, the city of New Orleans enjoyed a palpable boost in civic pride when it played host to the Super Bowl. Whether or not it turns into cold hard cash for local businesses, few things make politicians and chambers of commerce happier than having the eyes of the world trained on their cities.
The Super Bowl is usually good for cities, but not as good as the NFL would have you think.
The Super Bowl is the biggest event in America’s biggest sport. There is fierce competition to host the game, and the NFL has a vested interest in stoking that competition. In most cases, hosting a Super Bowl is undoubtedly good for a city, but not nearly as good as you might be led to believe. Some reports make outrageous claims of net economic gains creeping up to $250 million.
The reality is that Super Bowls do bring in hundreds of millions of dollars, but cities also spend hundreds of millions of dollars for the privilege of hosting them. The truth is probably most accurately portrayed in a report by the Guardian that estimates the real impact to be somewhere between $30 million and $130 million for the host city.