Is the Super Bowl a cash bonanza? Many economists say no

The NY/NJ Super Bowl Host Committee didn’t return calls for comment for this story. Its members did talk with The Associated Press but refused to disclose how they arrived at the $500 million to $600 million figure.

On the basis of publicly available reports issued after previous Super Bowls, Baade and others said the committee is most likely basing estimates on surveys of a small number of Super Bowl attendees that asked how much they spent on hotels and restaurants. That, economists say, is a very flawed way to figure out how large an impact the Super Bowl will have on a city’s economy.

For one, it doesn’t take into account the costs of the Super Bowl. While the construction of MetLife stadium was privately financed, New Jersey spent about $250 million for transportation and infrastructure upgrades. And that doesn’t include the untold millions that New York and New Jersey will spend on security, extra buses and trains to the event and cleanup.   

And perhaps most important, the host committee’s numbers don’t factor in any loss of economic activity because of the Super Bowl.

“There’s an assumption that football fans aren’t displacing other tourists,” said Andrew Zimbalist, an economist at Smith College in Massachusetts.

But, because of higher hotel prices and more traffic, economists say they probably are.

“Suppose 300,000 people come (for the Super Bowl) and buy some beer and hot dogs and stay in a hotel in Manhattan. What would the person who they are displacing do instead? When you go to New York for Broadway and food and museums, much more of the money goes to New York,” Zimbalist said.

And, he suggested, people who visit the New York area for the Super Bowl are there for one thing only, the game, so they may be less likely to promote New York through word of mouth after they get back home.

There’s no way to know for sure just how much or how little each Super Bowl contributes to the local economy. Some economists say that with all the costs laid out by the host cities and states, it may actually drain money. But most seem to agree that $50 million to $100 million is injected into the economy.

The NFL disputes those low numbers.

Brian McCarthy, the league’s vice president for corporate communications, said the NFL hadn’t done any studies of its own but agreed with the host committee’s assertion that each Super Bowl is indeed a boon.

“You can see (the economic activity) when you walk down the street,” he said. “These economists have never been to a Super Bowl, but they’ve made a cottage industry out of criticizing.”

Even if the host committee is right, Zimbalist and others point out that the basic economic principle of opportunity cost is rarely considered when localities try to lure the Super Bowl to their backyard.

Opportunity cost basically covers what the governments could have spent money on if they hadn’t spent hundreds of millions on infrastructure for a new stadium and for transportation and security increases for the event and what effect that alternate spending would have had on the local economy.

Joshua Pitts, a professor of sports management and economics at Kennesaw State University in Georgia said using that money to attract a more permanent investment could lead to more sustainable economic results.  

But, he said, regardless of logic, spending hundreds of millions on football is much easier of a sell than spending the money on virtually anything else.

“If you take that money and use it to attract, say, a cardboard-box plant to the area, income and employment in the area would grow significantly more,” he said — but most people care less about boxes than they do about football. “There’s no 24-hour news network or section of the newspaper dedicated to the cardboard box industry.”