Along with unfashionable facial hair, touting economic reports promising massive windfalls from local sporting events has become a Mayor Ed Lee trademark.
This week, Lee announced the city's bid to host Super Bowl L (that's "50") in 2016, which, a release promises, "would bring [an] enormous economic boost" to the region. Within the America's Cup study prepared by Beacon Economics and the Bay Area Council Economic Institute is the claim the Super Bowl would bring the region $300-$500 million in overall economic activity. Lee and other boosters have latched onto these numbers.
That $300 million has become the standard baseline economic boost promised by the National Football League and civic boosters in return for hosting a Super Bowl. This hypothetical number is trotted out again and again, even though a small army of sports economists have produced reams of studies sifting through the economic data produced in the wake of 46 Super Bowls. And, among actual economists studying actual data, the conventional wisdom has become that "mega-events" do not actually produce a measurable economic impact, let alone an "enormous economic boost."
An analysis of economic data for 32 years of Super Bowls undertaken by economics professors Victor Matheson and Robert Baade claims the event generated, on average, about one-quarter the income gains for host cities promised by the league and boosters — some $92 million. This average obscures a more ominous reading of the data. Host regions, per Matheson and Baade's model, can expect about a 5 percent chance of enjoying $300 million in economic impact. But there's a 23 percent chance of making zero dollars or less — meaning the odds of losing money are five times greater than the probability you'll make what boosters promise.
When it comes to boosters' claims, Matheson's oft-quoted refrain is to "Take whatever estimates the promoters tell you and move the decimal point one place over — and that's the real number." Crunching the data for six South Florida-area Super Bowls, however, professor Philip Porter couldn't even back up that dictum.
The University of South Florida prof ran economic data for the six Super Bowls through three different analyses. Only one of the 18 runs produced a significantly positive result.
But how can legions of football fans descend upon a region and not make a dent, economically? One reason is that measuring the number of people who head to a Super Bowl city for the game is a straightforward endeavor. Measuring the number of people who stay away from an overpriced, tourist-infested zoo is not. Especially in a year-round tourist destination like the Bay Area, Super Bowl visitors aren't flocking to hotels that would otherwise be empty; they're displacing would-be visitors. What's more, hotels in many Super Bowl cities triple their rates and insist on multiday packages. This drives away non-Super Bowl visitors and also leads to fans booking rooms for more days than they'll actually use — meaning those rooms aren't being occupied by actual people who could be spending actual money.
To claim an economic windfall based on visitor numbers without factoring in those who avoid the area or are pushed out "is like going to the hen-house, counting all the foxes, and saying 'Look at the economic impact of all these foxes here eating!'" Porter says. "You're not counting all the hens who are gone."
Of course, the NFL and civic boosters have billions of reasons to perpetuate the myth that hosting a Super Bowl is a surefire economic bonanza. Regions putting public dollars into stadiums, as is the case in Santa Clara, are reassured by the league that their investment will be rewarded with a future Super Bowl. The data generated by independent sports economists undermines the system the NFL has used to extract billions from public coffers.
Super Bowl guarantees are usually made by brazen athletes. In this case, a staid economist has one of his own. "You will see a very distinct pattern: The titty bars will be busy. The expensive hotels and best restaurants will be busy. But all other venues will be half-empty," says Porter of a future Bay Area Super Bowl. "The children's museum or zoo or other things normal tourists would do won't fare very well. The net result will be a redistribution of income and zero net impact."