SPORTS ECONOMIST SAY NOT AS MUCH AS YOU’D THINK
On Sunday, we all plopped in front of some sort of screen to watch the Super Bowl. There’s no shortage of pomp and circumstance associated with the annual event: It’s the climax of the NFL’s season where a group of men are crowned champions after all of the blood, sweat, tears, and other trumped up nouns that highlight dedication. But really, the NFL never ends. It’s a 365-day (well, this year, 366-day) enterprise, and Houston is already gearing up to host Super Bowl 51 next February.
NASA astronauts even threw a football in space as a sort of ribbon cutting.
According to the Houston Chronicle, downtown Houston will get new road construction, art installations, updates to Discovery Green, and other improvements in preparation for the big game. Houston’s Super Bowl Host Committee created a Super Bowl mascot named TD, which it revealed last month. If it seems like Houston is incredibly excited to hostSuper Bowl 51, it’s because it is. What city wouldn’t want to host the only American institution that truly rivals election night in its grandeur?
But here’s the thing about Super Bowls: Even though the NFL consistently trumpets that Super Bowl cities will see hundreds of millions of dollars in economic impact, economists that these numbers are either outright lies or incredibly optimistic. But, hey, why would the NFL ever mislead you? That has never happened before.
A common criticism from economists is that the NFL’s projections don’t take into account the amount of spending that would take place in the locations regardless of the game. The Super Bowl is often hosted in warmish cities that have a high amount of tourist activity—Miami, New Orleans, San Francisco—in the winter. Naturally, a good amount of tourist activity would have already been in the works, but Super Bowl crowds can drive the regular traffic away. In a 2010 study conducted by sports economist Victor Matheson, he recalls when New Orleans hosted the Super Bowl in 2002, months after the September 11 terrorist attacks. The season was pushed back a week due to the tragedy, and New Orleans had a national auto dealers convention in town the day that the Super Bowl had been rescheduled to. Eventually, the convention was postponed to accommodate the Super Bowl.
Now, no sane person would say that some car event could compete with a Super Bowl in terms of spending and foot traffic, but one thing conventions won’t do that the Super Bowl does exceedingly well is drive away the locals. Talk to any person who has lived in New York City more than a week and ask them how they feel about Times Square. They hate it, chiefly because its extremely congested. Hosting a Super Bowl is like turning a good chunk of your city into Times Square, but Times Square on HGH. Now, imagine hosting and consider what level of hell that might be. In cities such as Houston that already have abysmal traffic, this keeps locals who would otherwise be out spending money at home.
And as for tourism, what happens when a good chunk of that money spent during the Super Bowl is at chain restaurants and hotels or places that are already typical tourist traps? The amount of increased revenue that actually has an impact within the city is small. In Matheson’s study, he lays out how much money is actually circulated within host cities:
For example, it is common practice for hotels to raise their rates to 3 or 4 times the normal level during the Super Bowl. Local hotel desk clerks and room cleaners, however, don’t see a 300% or 400% increase in their wages. It is not the local workers but instead shareholders back at corporate headquarters who benefit from the event. Since a smaller portion of visitor spending at hotels winds up in the hands of local residents during the Super Bowl, multipliers calculated using average spending patterns are likely to be biased upwards.
Another major point of concern Matheson raises in his study is tracking the taxpayer money that goes into hosting the game. NFL organizations often build stadiums or make upgrades to existing ones in preparation. In order to host Super Bowl 51, the Texans built. The screens cost $16 million and were paid for by owner Bob McNair and the Houston Livestock Show and Rodeo, but 61 percent of the bill was reimbursed with funds from the hotel-motel tax and long-term auto rental tax, which are public funds.
That’s a big price tag that doesn’t necessarily have a lot of return. Back in 2004, Arlington voters approved a $325 million tax increase to build AT&T Stadium. The former NFL commissioner visited the site and said the facility would put North Texas in prime contention to host a Super Bowl, and in 2011 it did just that. But did the shiny new stadium deliver the mega bucks the city hoped for? “We usually can find a spike,” Matheson. “But people who’ve looked back at past Super Bowls, we usually see a bump somewhere between $130 million [and] as low as $30 million. So [it’s] nothing the city should turn down, but it’s also a fraction of that $600 million figure that was touted for Dallas a few years ago for their Super Bowl.”
Heightened security is another drawback that hosting a Super Bowl. A columnist at the San Francisco Chronicle ripped into this year’s event earlier this week, and it reads like a scene straight from 24’s writer’s room:
Can we say it now? Is it safe? Are all those Homeland Security bros and confused-looking U.S. Army personnel, with their assault rifles, bomb-sniffing dogs and nervous glares, on their way back to base? What about the military snipers, Blackhawk helicopters, nuclear radiation detectors, FBI investigators, additional surveillance cameras? Is NFL commissioner Roger Goodell back in his cryogenic deep freeze until the next time he’s called upon to decimate some other city and/or defend brain damage? Excellent. Let’s go for it. Farewell, and good riddance from San Francisco, Super Bowl. You will not be missed.
Sounds like a ton of fun! In all seriousness, the major, and perhaps only benefit that lower and middle class citizens have in a Super Bowl city is pride. Being able to flaunt yourself on the world stage during the Super Bowl is sort of cool. It’s like dressing to the nines for a wedding, Easter, or New Year’s Eve. But all of that is pure pageantry, which is fitting, because that’s what the NFL is all about.
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