What's the value of hosting a Super Bowl? Not as much as you'd think

Congratulations on your Super Bowl, Houston. You fought hard to be world’s sports dateline this week, beating out South Florida when Dade County voters refused to cough up $350m to renovate the stadium down there. It doesn’t matter that the Dolphins finally financed the upgrade themselves. Miami and Fort Lauderdale aren’t the backdrops for every highlight show and morning FM sports zoo these next few days. That’s all you. And nothing says the big leagues bigger than the biggest game in the biggest sport.

Priceless, right?

Or is it?

What’s the value of a Chamber of Commerce week with those helicopter shots of the skyline at sunset? What’s the worth of luring the NFL with a global armada of television networks, and those corporate playboys wielding black cards on the ultimate athletic junket? Guess what? It isn’t as much as city leaders and the NFL say it is. Not even close.

Mayors and business executives love to talk about the economic boom of the Super Bowl. This is to be expected. Super Bowls are legacy-defining events that make the bio page on the websites pop. They use words like “generate” and “boost”. They speak of great fiscal booms that will keep their streets sparkling for decades. In Houston, the Super Bowl organizers brag this week will bring in anywhere from $350m to “upwards of $500m.” In 2015, the Super Bowl host in metropolitan Phoenix commissioned a study that said the area took in $719m during that year’s Super Bowl week.

“The largest economic impact ever held in the state of Arizona,” gushed the report.

But here’s the thing about Arizona’s $719m figure. While it’s not necessarily wrong, it’s not necessarily right. The Phoenix area might have taken in $719m from Super Bowl-related events that week, yet it also spent hundreds of millions of dollars to put the game on. Forgotten in the hype of $719m are the tens of millions in giveaways to the NFL or the cost of extra security or the money lost from local businesses who chose not to hold meetings or conferences on a week when the Super Bowl had taken over downtown.

The real value of a Super Bowl to its host city is $30m to $130m, said Victor Matheson, an economics professor at the College of Holy Cross, who has spent years studying the real impact of big sporting events on their cities. These aren’t bad figures. Making $30m off a football game is a good thing; it’s just not $719m. In fact, it may not be as lucrative as a week of orthodontists’ meetings or a toolmakers’ convention, neither of whom require the hassle or expenses of a Super Bowl.

Orthodontists don’t bring thousands of journalists, however. They don’t generate days of national “round-the-clock” coverage from downtown hotels. The Goodyear blimp doesn’t hover over the city for seminars on dental retainers.

In the end, Super Bowl cities aren’t buying themselves an economic boost. They aren’t jumpstarting their economies. What Houston is getting this week is what the San Francisco Bay area got last year and Phoenix the year before that. They are purchasing the kind of civic pride that makes politicians’ hearts thump with joy. And civic pride doesn’t necessarily translate into real dollars.

“I’ve never heard even anecdotal evidence that someone relocated their business to a city because their CEO enjoyed the Super Bowl there,” Matheson told the Guardian.

What there is, however, is hard evidence of the NFL’s Super Bowl shakedown.

Back in 2013, while Minneapolis was bidding for next year’s Super Bowl, the league sent city leaders an astonishing 154-page list of demands that needed to be met just to have a hope of landing the game. The document, uncovered by the Minneapolis Star Tribune, was disguised as a bid guide, but read more like a high-priced ransom note.

The NFL insisted the city would have to waive all state, local and city taxes; pay for 20 billboards promoting the game; pay all travel expenses for 180 league officials to check out the area before the game; provide two golf courses in the warm months before the game and two bowling alleys during Super Bowl week; provide 35,000 free parking spaces and give free police escorts for all of the NFL’s team owners.

Oh, and the league needed the stadium rent-free for a month around the game.

And did we mention they asked for all proceeds from ticket sales?

Minneapolis’s Super Bowl organizing committee told the Star Tribune they didn’t agree to all the NFL’s demands, though they must have acquiesced to most, because months after the document was delivered, the city won the bid.

“I’m not even blaming the NFL, because over the years these cities are bidding against each other,” said Craig Depken, a sports economics professor at the University of North Carolina Charlotte. “The NFL didn’t just come up with 154 pages of demands; someone has probably offered these things over the year and the NFL just went: ‘Hmm.’”

Suddenly, that $719m doesn’t look like $719m anymore.

“It’s just so aggravating from a social policy and economic justice standpoint to see that the people going to Houston [to cover and watch the game] pay tax that [Patriots owner] Bob Kraft and [NFL commissioner] Roger Goodell do not,” Matheson said.

What looks better on an aspiring political star’s resumé: fixed potholes or a Super Bowl? One might serve a city’s needs but there’s no leading role at the year’s biggest sports extravaganza when you’re standing behind a dump truck full of asphalt. The NFL wants two bowling alleys? Hell, why not give them four?

Sure, there is money to be made on a Super Bowl. Lots of people do come for the game, and they do stay in hotels, and those hotels do pump up their rates to heart-stopping amounts. These people also eat in restaurants and shop in stores. But remember this too, Matheson said, most of the money made on those extra-expensive hotel rooms is being shipped to the corporate headquarters out of town. Restaurant workers and shop employees might work a few more hours but their salaries aren’t being raised because the Super Bowl is in town. The trickle-down is small.

“I think we as economists haven’t done a good job [explaining] this,” Depken said. “Ultimately, you get city elders who want to host these events because they get something out of it.”

Now Houston basks in the spotlight. And maybe this is a good thing for the city. Maybe Houston needs to be HOUSTON! for a few days. Certainly Jacksonville felt a tinge of pride when they hosted the 2005 Super Bowl. New Orleans probably felt the 2013 Super Bowl was another step in their Katrina recovery.

Perhaps there’s a value on a city’s smile.

But that smile isn’t bringing in $500m or $719m. Not even close.