Daniel Ciancioso
Case written by:
Victor Matheson
 Super Bowl is the most significant sport event in US
 Highest ticket prices
 Advertising
 Neutral site with location changes every year
 2000-2009 average television viewership
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Super Bowl: 90 million
World Series: 19 million
NBA Finals: 14.3
Stanley Cup: 4.1 million
 NFL claims Super Bowls generate large benefits
 NFL/ W.P. Carey MBA Sports Business Program
 $500.6 million from Super Bowl XLI in Phoenix (2008)
 NFL SMRI study
 $670 million in taxable sales in South Florida 1999
 $396 million increase in economic activity
 Average income of Super Bowl attendees vs. tourists
 $144,500 compared to $40,000-$80,000
 NFL has strong financial incentives
 NFL uses Super Bowl to get public subsidies
 325 million tax increase for $1.1 billion AT&T Stadium
 $400-$500 million boost to local economy
 New NFL stadiums
 $5 billion in taxpayer money since 1995
 11 cities hosted Super Bowl in the last 15 years
 6 were awarded immediately after new stadium
 Tampa, Dallas, Indianapolis, Phoenix, Houston and Detroit
Super Bowl XXVIII in Atlanta
Number of visitors
x Spending per visitor
= Direct Impact
+ Indirect Impact (Multiplier Effect)
= Total Economic Impact
$306,680.00
$252.00
$77,000,000.00
$89,000,000.00
$166,000,000.00
*Numerous difficulties with this estimation method
1)Substitution Effect
2)Crowding out
3)Leakages
 Consumers spend money on a sporting event that would
have been spent elsewhere
 Ex/Christmas present
 Few local attendees/week long event
 75% available tickets to individual teams
 17.5% for participants
 1.2% for
 5% for host team
 25% for sponsors, networks, VIPs and host committee
 Crowds and congestion assorted with a sporting event
displace regular economic activity
 Some people less inclined to visit host city during that time
because of large crowds
 Super Bowl in warm cities with large tourism
 80% Economic impact should only include extra rooms sold
to sports fans over what would have been there
 Sep. 11th Example
 New Orleans auto dealer convention
 Much of the money made in the host city may immediate
leak out of the city
 The event may generate income for the city but not its local
residents
 Hotels raise rates 3-4x normal level during Super Bowl
 Shareholders, not local hotel members see that money
 Capacity constraints
 Labor and capital must be imported to meet demand
 Jacksonville Jaguars
 6 cruise ships holding 7,600 guests
 Casual visitors
 Tourists who attend sporting event on travel, not sport
 Spending counted in typical economic impact study
 Not significant issue during Super Bowl week
 Time switching
 Planning to visit a city anyway but rearranges to coincide
with sporting event
 Event doesn’t influence if but when
 Once sports fan has seen the city, crossed off vacation
destination
 Independent scholars not connected with NFL
examine ex post impact of hosting Super Bowl
 Employment, personal income, per capita income,
taxable sales, tax revenues, visitor statistics
 Conclusion: Super Bowl generates a fraction of
economic impact claimed by NFL boosters
 2000: Baade/Matheson
 25 Super Bowls 1973-1997
 Average economic impact of $30 million (1/10)
 2002: Coates/Humphreys (per capita income)
 All post-season play in North America
 Hosting Super Bowl no effect on per capita income
 Winner experiences $140 in per capita income
 2005: Matheson said $50-$60 increase in per capita income
 Not statistically significantly different from zero at 5%
 Negative effect?
 2009: Davis and End study of hosting and winning Super Bowl
 Winning had positive coefficient at 5%
 Hosting had a negative coefficient at 5%
 Hard to isolate within large, metropolitan economies
 $500 million is less than 0.2% of Miami’s annual GDP
 Super Bowl only lasts for a few days
 Taxable sales
 Available monthly
 Cover individual cities instead of entire metro areas
 Used to finance many publicly funded sports facilities
 Single largest component of GDP is consumer spending
 NFL claimed $670 million increase in South FL 1999
(Miami Dade, Broward, and Palm Beach)
 NFL did not to account for factors besides Super Bowl
 Inflation, population growth, routine economic expansion
 Over 90% of increase because of these variables
 Broward and Palm Beach had taxable sales lower than
expected despite Super Bowl ($14 and $16 million)
 Only Miami had increase($67 million)
 Taxable sales were $1.26 higher the year after the Super
Bowl!
 Assessing impact of Super Bowl in Glendale, Arizona
 Powerful memories and good feelings
 Return visits, family and business relocations
 Word-of-mouth marketing
 Game serves as an advertisement to the city
 30-second shot of downtown Miami- $3 million
 Value of commercial
 Diminishing marginal returns
 NFL convinces cities that a new stadium will bring a
significant economic impact to host city
 Because Super Bowl is used to extract public financing, we
should be skeptical
 NFL measures activity that does occur because of the Super
Bowl but not activity that doesn’t
 Scholars not connected with NFL found observed effects of
the game on real economic variables to be generally
positive, but a fraction of what is claimed by the NFL