Superbowls bring cities between $0 and $120M in economic activity, not $600M

Cities spend millions to court the Superbowl, offering tax-exemptions for Superbowl employees, building fancy stadiums, paying cops and municipal workers to secure the site, and more. The Superbowl claims that this is a good investment: they say a city can expect to bring in $600 million in local economic activity from the big game.

But independent economists who investigate that number find it very, very suspicious. For one thing, the majority of money spent at a Superbowl is spent in the Superbowl, or on goods that are manufactured under license from the Superbowl, and the lion's share of that money leaves town with the Superbowl. One economist, Holy Cross professor Victor Matheson, compares this to "an airplane landing at an airport and everyone gets out and gives each other a million bucks, then gets back on the plane. That's $200 million in economic activity, but it's not any benefit to the local economy."

The Superbowl's own methodology for calculating local spending sucks. Other economists put the figure at between $0 million and $120 million. Not chump change, but also a lot less profitable than previously suspected, especially when you factor in the costs to the city of putting on a Superbowl.

Still, when you compare the numbers with the absolute gouging that World Cup cities endure (Brazil will spend over $13B on theirs), the Superbowl looks positively benign by comparison.

Read that study, and we find that to arrive at this figure, researchers simply surveyed Super Bowl attendees, asking them where they were from, whether they'd rented a hotel room, their total food expenses, and so on, then applying a multiplier to account for how fan spending then got re-spent in the local economy. (This multiplier ends up basically doubling the final economic impact number; more on that in a moment.)

You've probably noticed some potential problems here, beyond the dubious quality of survey results derived from asking drunken NFL fans how much they were spending on food. (Median answer: "WOOOOOO NINERS!") First off, a big chunk of spending is on things like Super Bowl tickets and Super Bowl beers and Super Bowl lawn gnomes -- but most of the money for such branded items goes right back out of town once the Super Bowl leaves (except for whatever small sum is paid to the vendors actually selling these items). As Holy Cross professor Victor Matheson, another economist who's studied Super Bowl impact, puts it, "Imagine an airplane landing at an airport and everyone gets out and gives each other a million bucks, then gets back on the plane. That's $200 million in economic activity, but it's not any benefit to the local economy."

It's the Local Economy, Stupid! [Neil deMause/Sports on Earth]

(Image: Jumping Jack Flash Fireworks Superbowl spiked single shot, a Creative Commons Attribution (2.0) image from epicfireworks's photostream)