Glendale mayor, experts say NFL oversells economic benefit of Super Bowl

While The Arizona Super Bowl Host Committee has estimated this Sunday's game will bring the state about $500 million, both economic research and the host city's own mayor suggest that number will be quite a bit lower.

But the Super Bowl is a bonanza for some, particularly the National Football League and its owners. On Friday, the average price of a ticket for the game was $10,517.80, according to TiqIQ, which tracks trends in event ticket buying. That makes this Sunday’s Super Bowl between the Seattle Seahawks and New England Patriots the most expensive sporting event since 2010, according to the ticket vending website. The average ticket price for the 2014 game was $3,375.88.

According to a confidential November, 2013 hosting bid document obtained by Minneapolis newspaper The Star-Tribune in 2014, the NFL keeps 100 percent of ticket revenue from the game.

“I totally believe we will lose money on this,” Glendale, Arizona Mayor Jerry Weiers told ESPN on Jan. 20. The city lost $1.6 million hosting Super Bowl XLII in 2008, according to Weiers, who said this year's loss could be around $2 million.

Weiers complained that his city and taxpayers had to absorb $2.1 million in security costs for this Sunday's Super Bowl, where the New England Patriots and Seattle Seahawks will face off, and asked the state of Arizona for help with the costs, but was refused.

After Weiers' public criticism of the financial burden Glendale was expected to shoulder, the owner of the Arizona Cardinals blasted Glendale in the New York Times on Monday as a "poor partner."

"They’ve done the bare minimum," Michael Bidwill, the principal owner of the Cardinals. “They’ve tried to gouge fans coming here."

The NFL insists the Super Bowl is worth $500 million in economic impact to a city, but many economists have debunked those numbers and say the impact is not even half that amount. According to PricewatershouseCoopers, the direct spending associated with Sunday’s game in Phoenix will be about $206 million. PWC has studied the games for the last 12 years and estimates spending to generally be $130 million to $202 million.

Economist Victor Matheson at the College of the Holy Cross told CBS News that the economic impact could be as low as $30 million.

According to the bid document, in 2014 the NFL requested that local police officers be provided at no cost for anti-counterfeit teams. The NFL asked for 20 free billboards in “NFL designated areas.” The league also requested that the local organizing committee pay all travel expenses for 1,880 people to travel to Minneapolis “to inspect the region,” according to the paper. The hotel headquarters were requested to make all of its meeting space available to to the NFL at no charge.

NJ.com reported that the state and other agencies spent at least $36.9 million in public money for the 2014 Super Bowl in East Rutherford, New Jersey, which was not reimbursed by the NFL’s host committee or the NFL.

On page 57, the NFL bid document spelled out conditions for cab drivers — no gouging — while international hotel chains like the Hilton are cashing in, charging $1,159 per night in Phoenix Wednesday through Sunday, according to the Hilton booking website.

The NFL document did not mention whether ride-sharing start-up Uber, which has come under criticism for inflated fares during high-traffic events, would also be subject to fare restrictions. The NFL and Uber could not be reached for comment by publication.

Amid similar criticism at the 2014 Super Bowl, 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.”

One example of locals capitalizing on the event are the nuns of Our Lady of Guadalupe Benedictine Monastery in Phoenix, who are reportedly charging $300 a night for a room — continental breakfast and Wi-fi included.

But Andrew Zimbalist, a professor of economics at Smith College, who has written numerous books on the economics of sports, said “I don't see hosting the Super Bowl as an economic benefit, except in special cases. [Even] warm, southern cities and popular cities (like New York) don't get an uptick in tourism or spending, just a lot of costs and headaches.”

Zimbalist said the spending by people coming to such events merely replaces the money brought by regular tourism.

The 2016 Super Bowl will be played in San Francisco, the 2017 Super Bowl will be played in Houston, and the 2018 game will be played in Minneapolis.

Atlanta is expected to put in a bid within the next few years. The city’s NFL team, the Falcons, will move into a $1 billion stadium in 2017. But Atlanta mayor Kasim Reed is cautious about the prospect of hosting such an event, saying the benefits will have to be studied ahead of the cost to taxpayers.

“You have to make a business decision whether all the economic benefits of the Super Bowl warrant that,” Reed told Al Jazeera. “You make it on a case-by-case basis and you make the best arrangement that you can. The Super Bowl, many believe, is the biggest economic generator of any event in the country.”

On Friday morning, as a cold wind whipped through downtown Atlanta, cab driver Geza Denek stood in the chill outside his cab on Peachtree Center Avenue. He was shocked to hear of the anti-gouging directive in the NFL document sent out to cities that want to bid on hosting the Super Bowl.

“Really?” said Denek. “They don’t have to worry about us.”

Denek pointed to the window of his cab where rates were posted in permanent ink. The rates are the rates, he said. “I can get fired for charging more when Super Bowl comes here.”