Why Hosting The Super Bowl Isn’t Worth It
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Why Hosting The Super Bowl Isn’t Worth It

Narrator: The Super Bowl
is America’s biggest annual sporting event. Each year, over 100 million TV viewers tune in for the big game, making the Super Bowl nine of the 10 most watched American TV programs of all time. And hosting it has become
as American as watching it. Many Super Bowl host committees believe that popularity
can mean just one thing: big profit for the city. Committees and the NFL claim that the game can spur 300 to 500 million dollars of spending in a host city. For example, in 2018
Minnesota’s host committee reported that Super Bowl 52 brought in $450 million to its
half of the Twin Cities. But sports economists,
including Victor Matheson, are skeptical. Matheson: “If someone
claims, ‘Look, this event is three, four, five
hundred million dollars,’ what an economist would
say is: ‘Prove it.'” Narrator: In fact, when
Matheson crunched the numbers, he found that Super Bowl brings in between $30 and $130 million, a fraction of what the host committees
and the NFL claim. Here’s why hosting the Super Bowl isn’t as valuable as people think. So what does it cost to host a Super Bowl? Matheson contends that for some cities the cost starts with
building a new stadium. Seven NFL stadiums were
constructed from 2006 to 2017. And by 2019, each will
have hosted a Super Bowl. And on average, taxpayers contribute $250 million for stadium construction. Matheson: “They say, ‘Look,
you build the stadium and we’ll bring you a Super Bowl.’ If the Super Bowl actually
brings four or five hundred million dollars to the city, then, all of a sudden, handing over $500 million in taxpayer subsidy looks like a pretty good deal. Unfortunately, if the actual
impact is a fraction of that, then, all of a sudden,
taxpayers are on the hook for a huge stadium, and
they’re not getting much in the way of help, at
least from the Super Bowl, to pay that stadium off.” Narrator: In addition to the stadium, which the NFL uses at no charge, there’s also the cost
of hosting the event, like public transportation
and police overtime. For example, in 2014,
New Jersey gave the NFL an $8 million tax break, and NJ Transit ended up
with $5.6 million of losses transporting fans to
and from the Super Bowl. But on top of that, the NFL
requires additional expenses. Minneapolis’s Star Tribune
published the NFL’s 153-page bid book that
it obtained in 2014. The document lists millions
of dollars worth of the NFL’s specifications and
requirements for host cities. The list includes: parking
spaces, hotel rooms, transportation,
billboards, security, food, access to golf courses and
bowling alleys, along with an exemption on paying
city, state, and local tax. Matheson: “That obviously
means that a lot less money is sticking in the city. That’s all going back to
NFL’s headquarters, and, at that point, the money does get shared. But again, it doesn’t get
shared with local governments. It gets shared with the
other 32 team owners.” Narrator: These are high demands, and committees comply under the assumption that they’ll make the money back. But just how much of a profit
are cities actually making? Well, it all depends on how
you do the calculations. Matheson found three
differences for the disparity. The first is substitution effect, which is when consumers spend
money on a sporting event, that they would have spent anyway. So it doesn’t increase the
amount of money being spent. It rearranges the spending pattern. The second is crowding out effect, which is when crowds associated
with a sporting event displace regular spending. So if the Super Bowl fills every hotel that would normally be 80% occupied, the NFL is only accounting
for the 20% increase. And the final reason is leakage, which accounts for where the
money ultimately ends up. Hotels usually increase
prices by three or four times during the Super Bowl, but
corporations and shareholders reap the benefits of the price increases, not the local workers. Matheson: “So, what
you’re trying to do is, you’re trying to pay for tens of millions of
dollars of expenditures on really not much in the way of additional economic activity, so, you can definitely not come out ahead, at least as a state or local government.” Narrator: In 2008,
Glendale, Arizona hosted Super Bowl 42, and the
city’s mayor told ESPN that the city lost $1
million in the process. In 2016, San Francisco
hosted a week of events leading up to Super Bowl 50, which was being held in Santa Clara, and San Fran ended up with a $4.8 million public services bill. Matheson: “We do have some
evidence that big events, like the Super Bowl or the Olympics, at least temporarily cause
a surge in happiness. But, we need to be careful about that. So, if you wanna say, hey,
bring in the Super Bowl because it makes people
happy, that’s great. Just don’t tell us it makes us rich.”


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