Why cities bid to host the Super Bowl (hint: it’s not just about the immediate money)

A story about how cities win the opportunity to host the Super Bowl has this explanation of why cities bid in the first place:

The NFL looks at the Super Bowl location as a kind of carrot to reward cities that are expanding the NFL’s sphere of influence, either by fielding a winning team, building a fancy stadium, or, ideally, both. Cities bid for the honor of hosting the Super Bowl because it brings in tourist dollars and prestige.

How much money is the subject of some debate. The NFL maintains that the Super Bowl brings in hundreds of millions of dollars to local economies. An article from the Indianapolis Business Journal says, “The NFL estimates Indianapolis will draw 100,000 to 150,000 visitors who could spend $200 million over a 10-day span.”

However, some find that number to be misleading. An academic paper from Holy Cross titled “Economics of the Super Bowl” argues that these numbers are “‘padded’ at least as well as the players on the field.”

Philip Porter, an economics professor from the University of South Florida, attempted to figure out the Super Bowl’s financial impact in 2007. The Sun-Sentinel reports that “he said he examined data from the Florida Department of Revenue showing expenditures in Miami-Dade County were $3.318 billion in February 2006 and $3.308 billion in February 2007.”

Regardless, there are some tangible benefits for citizens of Super Bowl cities. In the case of Indianapolis, “the city pledged to build a practice facility downtown that will be left in place for local residents to use.” There is also an increase in jobs (even if the jobs are temporary).

It sounds like the NFL pushes the economic argument: host the Super Bowl fans plus teams plus the media plus celebrities will spend lots of money. In addition, the temporary jobs that are created helps the Super Bowl bring money into a city. However, I wonder if this falls into a similar territory of the sports team who argues the city or state should spend taxpayer dollars to help build a new stadium or the team will leave. Studies show that these arguments are bogus: taxpayers end up spending money that owners profit because few cities can “afford” to let the big team go. Also, the article also suggests that a new stadium had to be built for the Colts for this bid to have any success and this cost money (some from the Colts, the rest from a food and drink tax). It sounds like it might be fairly easy to look at the economic data across Super Bowls.

My guess is that prestige, status, and the attention the Super Bowl draws and the money that this can lead to down the road is more important here. This helps put Indianapolis on the map and hopefully is not just a one-time event but rather helps lead to other big conventions and events (the city is already known as a sport town since it is home to the NCAA, hosts the Indianapolis 500) as well as attracting businesses who might otherwise not have a reason to visit the city. The immediate economic benefits may be nice to tout but this event gives a lot of air time and from what I have heard, media people have been impressed by the way Indy has rolled out the red carpet and also made all of the necessary locations within walking distance of each other. Wouldn’t it be great to be the mayor or other elected official who can claim that you helped bring the Super Bowl to Indianapolis? Wouldn’t it be even better to say that hosting the big game helped bring in more long-term revenue into the city? The real pull here is not the practice facility that is left behind but rather the fact that Indy is capable of hosting the biggest game in the United States.

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