Daniel CianciosoCase written by: Victor Matheson

Super Bowl is the most significant sport event in US Highest ticket prices Advertising Neutral site with location changes every year average television viewership Super Bowl: 90 million World Series: 19 million NBA Finals: 14.3 Stanley Cup: 4.1 million

NFL claims Super Bowls generate large benefits NFL/ W.P. Carey MBA Sports Business Program $500.6 million from Super Bowl XLI in Phoenix (2008) NFL SMRI study $670 million in taxable sales in South Florida 1999 $396 million increase in economic activity Average income of Super Bowl attendees vs. tourists $144,500 compared to $40,000-$80,000

NFL has strong financial incentives NFL uses Super Bowl to get public subsidies 325 million tax increase for $1.1 billion AT&T Stadium $400-$500 million boost to local economy New NFL stadiums $5 billion in taxpayer money since cities hosted Super Bowl in the last 15 years 6 were awarded immediately after new stadium Tampa, Dallas, Indianapolis, Phoenix, Houston and Detroit

Super Bowl XXVIII in Atlanta Number of visitors $306, xSpending per visitor $ =Direct Impact $77,000, Indirect Impact (Multiplier Effect) $89,000, =Total Economic Impact $166,000, *Numerous difficulties with this estimation method 1)Substitution Effect 2)Crowding out 3)Leakages

Consumers spend money on a sporting event that would have been spent elsewhere Ex/Christmas present Few local attendees/week long event 75% available tickets to individual teams 17.5% for participants 1.2% for 5% for host team 25% for sponsors, networks, VIPs and host committee

Crowds and congestion assorted with a sporting event displace regular economic activity Some people less inclined to visit host city during that time because of large crowds Super Bowl in warm cities with large tourism 80% Economic impact should only include extra rooms sold to sports fans over what would have been there Sep. 11 th Example New Orleans auto dealer convention

Much of the money made in the host city may immediate leak out of the city The event may generate income for the city but not its local residents Hotels raise rates 3-4x normal level during Super Bowl Shareholders, not local hotel members see that money Capacity constraints Labor and capital must be imported to meet demand Jacksonville Jaguars 6 cruise ships holding 7,600 guests

Casual visitors Tourists who attend sporting event on travel, not sport Spending counted in typical economic impact study Not significant issue during Super Bowl week Time switching Planning to visit a city anyway but rearranges to coincide with sporting event Event doesn’t influence if but when Once sports fan has seen the city, crossed off vacation destination

Independent scholars not connected with NFL examine ex post impact of hosting Super Bowl Employment, personal income, per capita income, taxable sales, tax revenues, visitor statistics Conclusion: Super Bowl generates a fraction of economic impact claimed by NFL boosters

2000: Baade/Matheson 25 Super Bowls Average economic impact of $30 million (1/10) 2002: Coates/Humphreys (per capita income) All post-season play in North America Hosting Super Bowl no effect on per capita income Winner experiences $140 in per capita income 2005: Matheson said $50-$60 increase in per capita income Not statistically significantly different from zero at 5% Negative effect? 2009: Davis and End study of hosting and winning Super Bowl Winning had positive coefficient at 5% Hosting had a negative coefficient at 5%

Hard to isolate within large, metropolitan economies $500 million is less than 0.2% of Miami’s annual GDP Super Bowl only lasts for a few days Taxable sales Available monthly Cover individual cities instead of entire metro areas Used to finance many publicly funded sports facilities Single largest component of GDP is consumer spending

NFL claimed $670 million increase in South FL 1999 (Miami Dade, Broward, and Palm Beach) NFL did not to account for factors besides Super Bowl Inflation, population growth, routine economic expansion Over 90% of increase because of these variables Broward and Palm Beach had taxable sales lower than expected despite Super Bowl ($14 and $16 million) Only Miami had increase($67 million) Taxable sales were $1.26 higher the year after the Super Bowl!

Assessing impact of Super Bowl in Glendale, Arizona Powerful memories and good feelings Return visits, family and business relocations Word-of-mouth marketing Game serves as an advertisement to the city 30-second shot of downtown Miami- $3 million Value of commercial Diminishing marginal returns

NFL convinces cities that a new stadium will bring a significant economic impact to host city Because Super Bowl is used to extract public financing, we should be skeptical NFL measures activity that does occur because of the Super Bowl but not activity that doesn’t Scholars not connected with NFL found observed effects of the game on real economic variables to be generally positive, but a fraction of what is claimed by the NFL