Atlanta Spending +/- $50 Million to Host Super Bowl

SB53

Super Bowl bids can cost the host city as much as $70 million (NYC, SB48), yet the “competition to host one [remains] significant”. In fact, the Atlanta Journal Constitution reported that the city of Atlanta volunteered to provide “enhancements” (including: $2 million for game expenses and $375K for a media party) on top of the NFL’s lengthy list of demands, to earn the right to host SB53. Atlanta’s bid, valued at $46 million, provides for the use of local law enforcement (public safety, hotel security, anti-counterfeit enforcement), hotel rooms (150+ for the teams), promotion (for the NFL experience), insurance and décor; costs associated with the use of Mercedes Benz Stadium, team practice sites, venues for ancillary events and 10,000 parking spots are also to be covered by the city.

Howie Long-Short: It’s important to understand that cities interested in hosting the Super Bowl have little room for negotiation and often must include in “enhancements” to differentiate their bid from the pack because of how many locales want game. Atlanta beat out Miami, Tampa and New Orleans for SB53.

Atlanta’s bid will be covered by a mix of public and private money. Two local businesses have donated $20 million, $16 million will come from the city’s designated hotel-motel tax fund (designed to draw marquee events) and the remaining $10 million is awarded in the way of a sales tax exemption on tickets. Enhancements – which could drive costs to as high as $49 million – include reimbursements up to $2 million for any additional state/local taxes incurred by the teams and another $1 million to “complement” state/city “efforts” should there be inclement weather (snow is in forecast for Tuesday).

While many of the requirements to host the game are the same, there’s a significant difference between the CFP Championship Game and the Super Bowl in terms of who’s entitled to the revenue generated from game tickets sold. On the college side, the host committee retains ticketing revenues to offset costs; on the professional side, the NFL controls “100% of the revenues from all ticket sales” (including all suites/club seats).

The Atlanta host committee has estimated that this year’s game would bring $185 million to the region, a far more realistic (and obtainable) figure than the $450 million Minneapolis claims to have generated in ’18. There are several reasons why that $450 million figure is misleading. First off, it didn’t include the $80 million lost in displaced tourism (i.e. locals who would have spent money, but left to avoid the chaos); so, the starting point for the conversation is really $370 million. “The added hotel revenues go almost exclusively to corporate profits, same with retail sales” (the retail markup and sales tax remain local) and of the $179 million spent by the league broadcast partners, operations teams and event planners — the most ever paid to put on a Super Bowl — a large portion is assumed to have gone into NFL owner pockets (i.e. never passing through Minnesota economy).

Fan Marino: Cold weather cities with domed venues can host the Super Bowl (see: Minneapolis, Detroit and Indianapolis), but NFL cities north of the Mason Dixon line without climate controlled stadiums can forget about it; league rules require the city’s average temperate in February to be north of 50 degrees (NYC was an exception) if the game is going to be played outdoors. It’s worth noting that despite the snow, the average temperate in Atlanta during February is 58 degrees; Sunday’s game will be played indoors.

If you build a new stadium, the Super Bowl will come; every stadium built since ’06 has hosted the game. Atlanta’s bids were rejected in both ’09 and ’10 when Falcons still played at the Georgia Dome, but the city landed their first Super Bowl since ’00 upon the opening of Mercedes Benz stadium. South Florida (’20), Tampa Bay (’21), Los Angeles (’22), Arizona (’23) and New Orleans (’24) will host the next 5 Super Bowls; expect Las Vegas to get a game over the next decade as well.

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Author: John Wall Street

At the intersection of sports & finance.

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