Tuesday, January 28, 2014

The True Economic Impact of a Super Bowl?

Economists and sports leagues may always spar over how much economic impact major events bring to a community, but there's always lots of good reading Super Bowl week on the topic.

Neil deMause writes on Sports on Earth that there may be some economic impact to a host city, but that the costs to host the event negate any possible gains:
So it's not entirely worthless to host a Super Bowl -- or a World Series, or an NCAA championship game, or a World Cup, or any of the other things that sports boosters are forever prescribing as the cure-all for any city's economic woes. Given the findings of Matheson, Coates, Porter, and their colleagues, it's probably not unreasonable to guesstimate perhaps $100 million or so of new money changing hands within the New York area during the first weekend of February, and a few million of that trickling down to the public in the form of new taxes.

That sounds good -- until you realize that the state of New York alone will spend $5 million on advertising for Super Bowl-related events, leaving the only benefit as … advertising New York City as a place that's brutally cold in the winter?
Meanwhile, deMause should be flattered the New York Times echoed most of his thoughts on the true beneficiaries of hosting big-ticket events:
In other words, the sporting event represents a huge transfer of funds from taxpayers to a handful of special interests. This is the standard assessment for almost any event for which governments bear the costs, including Super Bowls, Olympic Games and World Cups. So a question inevitably arises: Why exactly do governments fall for these pitches again and again?
“If I’m the mayor of New York or Newark or Trenton, I love the Super Bowl being in my backyard,” said Victor A. Matheson, an economics professor at the College of the Holy Cross in Worcester, Mass. “There is nothing better than being a bigwig at the center of all this attention. Who wouldn’t want a party thrown for them, especially if somebody else is paying?”
The same could be said for stadium-building on the taxpayer dime.

There's also been a lot of coverage of New Jersey businesses and cities upset with New York getting the bulk of the economic benefit.  That includes in the pages of the New York Times as well as the Philadelphia Inquirer:
"Every time I hear a player or broadcaster say he's heading to New York for the Super Bowl, it makes my ears bleed," said Sen. Robert Menendez (D., N.J.), who held a news conference Thursday at the Hilton-Meadowlands overlooking MetLife Stadium. At his side were Sen. Cory Booker (D., N.J.), Rep. Bill Pascrell Jr. (D., N.J.) and Cassella. "Apparently, the NFL needs a geography lesson, too."
Then again, nobody should be that surprised.  A lot of business-owners in Dallas were scratching their heads after the 2011 game too.


  1. "Every time I hear a player or broadcaster say he's heading to New York for the Super Bowl, it makes my ears bleed," said Sen. Robert Menendez (D., N.J.)"

    How about every time Sen. Menendez hears 'NY Giants' and 'NY Jets' - both teams play in NEW JERSEY!

  2. Hey now, hosting a Super Bowl has led to a continuing surge in the tourism industries of Detroit, Indy, and Jacksonville.

    Wait, what?