Super Bowl Economic Impact Study Misleads

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The Minnesota Super Bowl LII Host Committee has released an economic impact study indicating the 10-day football extravaganza (Jan. 26-Feb. 5) generated $450 million in economic impact (i.e. net new spending) for the region, $50 million more than projected. Fans who came to Minneapolis (95% from out of state) to see the Eagles beat the Patriots, spent most their money on hotel accommodations ($81.6 million, 30%), food and beverages ($61.3 million, 23.5%), entertainment besides game tickets ($34.5 million, 13%) and retail-shopping ($28.5 million, 11%). For comparison purposes, Super Bowl LI generated $347 million in new spending for the Greater Houston area, while Super Bowl L brought in +/-$350 million to the Bay area. It must be noted that Rockport Analytics both made the pre-event economic impact projection and issued the final study referenced in this piece.

Howie Long-Short: Sports Economist Victor Matheson said it perfectly, “the Super Bowl is definitely positive, but nowhere near $450 million positive in terms of dollars in local people’s pockets.” There are several reasons why that $450 million figure is misleading. First off, it doesn’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 this 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).

While the economic impact is certainly inflated, that’s not to say Minneapolis didn’t benefit. 83% of those who visited Minneapolis for the first time said they would be returning, meeting and convention leads are up 30% and the Legacy Fund pumped $5.5 million into the local community. For what it’s worth, Minneapolis’ CFO will present the actual incremental tax revenue generated from the Super Bowl to the city council in June.

Fan Marino: Last week, the NFL awarded Super Bowls LVII (’23) and LVIII (’24) to Glendale, AZ and New Orleans, respectively. Atlanta will host this year’s Super Bowl, with South Florida (’20), Tampa Bay (’21) and Los Angeles (’22). It’s likely that Las Vegas will be awarded the game during the next round host city selections.

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Author: John Wall Street

At the intersection of sports & finance.

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