Super Bowl's Economic Impact May be Super Inflated

The Super Bowl is not so super to many economists. Experts in the economics of sports say the NFL and its boosters have grossly overestimated the economic benefit of Sunday's championship game in Miami between the New Orleans Saints and the Indianapolis Colts. Controversy is raging in South Florida where the team is seeking taxpayer support to revamp the area's pro football stadium, whose naming rights were recently acquired by Canada's Sun Life Financial Inc. (SLF) and has hosted 10 Super Bowls.Local officials, who have backed a new stadium for Major League Baseball's Florida Marlins, say the can't afford the project, though the NFL and executives from the Miami Dolphins say the renovations are needed in order to attract future NFL championships. Team officials and the local committee that organizes Super Bowl bids have refused to disclose the project's costs, which include adding lights for high-definition TV broadcasts, according to Bloomberg News. That makes experts wonder if they are worth investing taxpayer funds.

A $400 Million Boost to South Florida?

"The debate over economic impact has been going on in the academic literature for about twenty years," says Craig Depken, an associate professor of economics in the Belk College of Business at UNC Charlotte, in an email. "Generally speaking the economics literature has found little evidence to support the idea that mega-events such as the Super Bowl or the Olympics generate the net economic impacts predicted by event promoters/advocates."

Super Bowl backers have said that the game should give a $400 million boost to South Florida's ailing economy. Experts argue the figure is close to $90 million. Kathleen Davis, the head of the Sports Management Research Institute which is collecting economic data for the game's local organizers, denies the Super Bowl's impact is minimal. Critics lack the access to the data she has that give her a complete picture of how the game effects the local economy, she says, adding that her company was not releasing its own predictions.

"They don't know what they are talking about," says Davis says of the naysayers.

Benefits Difficult to Measure

Benefits of the big game are difficult to measure, especially in South Florida. Tourists would have flocked to Miami in February, even if there was no Super Bowl. While it's true that hotels jack up their room rates for the big games, the profits they make flow back to their out-of-town owners and not to the economy in the Miami area, says Philip Porter, a professor of economics at the University of South Florida in Tampa.

"The studies [saying there are big benefits from the Super Bowl] are just guesses, not studies," says Porter. "While there is a lot of money being spent there is no opportunity for the city to grab it."

Local residents also may spend their money on Super Bowl tickets instead of on goods and services in the community. Other locals may leave the area to escape the crowds generated by the big game. When the Super Bowl was in Tampa, operators of strip clubs in the city dubbed the "lap dance capital" laid off local dancers and hired more famous out-of-towners to entertain the tourists, Porter says.

Economic Impact Not Top of NFL's Mind

Regardless, economic impact on the host city is not one of the NFL's primary concerns.

"The NFL is not really concerned about spreading the impact of the Super Bowl to the cities where the impact would be greatest -- at least I don't believe so," Depken says. "Otherwise, the event would be held in cities where tourism is essentially zero during February, e.g., Detroit. Granted, the event was held in Detroit once (as reward for building a new domed stadium) but I don't see the event returning to that city, notwithstanding the fact that it might have provided one of the largest net impacts of the event's history."
Read Full Story
  • DJI25962.51216.840.84%
  • NIKKEI 22521608.9242.070.20%
    Hang Seng29071.56-249.41-0.85%
  • USD (PER EUR)1.14-0.0040-0.35%
    USD (PER CHF)1.01-0.0002-0.02%
    JPY (PER USD)110.800.10600.10%
    GBP (PER USD)1.31-0.0067-0.51%

Can't get enough business news?

Sign up for Finance Report by AOL and get everything from retailer news to the latest IPOs delivered directly to your inbox daily!

Subscribe to our other newsletters

Emails may offer personalized content or ads. Learn more. You may unsubscribe any time.