The Reason Behind The NFL's 'Blatantly Dishonest' Super Bowl Economic Impact Studies
Every time a city hosts a Super Bowl, three things are certain: one team will win, one team will lose and the host city will commission an economic impact study that sports economists blast as grossly exaggerated.
The economic impact of the Super Bowl, or how much money the game adds to the local economy above an average weekend, is an important metric for cities to consider. The NFL touts these numbers as a way to get the host city to pay for services and logistics surrounding the big game.
The league also offers Super Bowls as incentives for cities to spend hundreds of millions of taxpayer dollars on stadiums. Six of the nine Super Bowls held between 2011 and 2019 will be, or have been, in stadiums that opened within four years of hosting the big game.
With so much public money being spent based off these estimates, one would expect them to be fairly accurate, but economists say that is not the case. Holy Cross economics professor Victor Matheson, who has published multiple papers on the subject, said these official studies often show two or three times what the actual impact is.
Host committees have little incentive to produce the most statistically accurate numbers, said Matheson, who was recently elected president of the North American Association of Sports Economists.
Matheson said there is broad consensus among economists that Super Bowl impact estimates are greatly exaggerated. There is real pressure being put on researchers to come up with generous estimates.
"If they can come up with a large, plausible number, that’s what they want," Matheson said. "The NFL uses this for two reasons: They use it to get all sorts of government payments to host the Super Bowl, and they use the Super Bowl as a carrot to dangle in front of otherwise reluctant taxpayers. They say 'build a stadium and we’ll make sure you get a Super Bowl.'"
Minnesota taxpayers recently paid $500M to build a new stadium, which opened last year. The NFL rewarded the city with the 2018 Super Bowl, which the host committee's study estimates will have a $404M impact on the local economy. Similarly, the stadium under construction in Atlanta will likely cost taxpayers more than $700M. They have been given the 2019 Super Bowl and told it will produce $400M in economic benefit.
Atlanta Falcons president and CEO Rich McKay said the Super Bowl was a factor in the decision to build a new stadium.
"Any economist that is going to argue against an impact of a Super Bowl hasn't been to a Super Bowl," McKay said.
The most recent big game impact Matheson points to as dramatically inflated was the Phoenix Super Bowl in 2014, which an Arizona State University study claimed had a $719M impact. By comparison, last year's Super Bowl brought an estimated $240M to the Bay Area economy, and this weekend's Super Bowl is expected to bring $350M to the Houston economy, according to the studies commissioned by the host committees.
Matheson said Houston and the Bay Area's numbers are slightly more realistic, but, from the reports he has done, he remains skeptical of any numbers greater than $130M.
The problem with most of these economic impact studies, Matheson said, is they cast too wide a net and then ignore ways in which the Super Bowl can reduce economic activity.
Much of the money that gets included in the estimates, Matheson said, is from locals who would have spent the money in the city in other ways without the Super Bowl. The studies also do not account for people who chose to avoid the city that particular weekend because of the massive crowds. They do not factor in money that leaks out of the local economy, like excess hotel profits that get sent back to the hotel's corporate HQ rather than reinvested in the local hotel or its employees.
"There’s a wide range in these reports," Matheson said. "Some are blatantly dishonest, while others make some attempt to deal with these sort of problems."
Washington University in St. Louis sports business director Patrick Rishe, the CEO of research firm SportsImpacts, has commissioned the official studies for three of the last 11 Super Bowls — 2006 in Detroit, 2011 in Dallas and 2016 in the Bay Area.
Rishe's estimates for each of those Super Bowls fell between $200M and $300M. He said he takes into account phenomena like crowding out and leakages, and he remains skeptical of studies like the Arizona one that found impacts of more than $700M.
"When any sports economist sees numbers that high, they automatically think they’re not measuring economic impact the way it should be," Rishe said. "What it's telling me is they’re counting money being spent but it doesn’t matter who is spending it or where it goes after."
Rishe said the researchers who complete the studies will often come up with multiple estimates, some conservative and others more generous, and the host committee will typically use the biggest number as the headline.
"From my experience, knowing what happens with other firms, there often is pressure brought to bear to look at things one way as opposed to another," he said.
Arizona State University professor Anthony Evans, who produced the $719M estimate for the 2015 Super Bowl, said his method accounted for leakages and excluded spending from locals and he is confident in the results. He also conducted the study for the 2008 Phoenix Super Bowl, which he estimated had a $500M economic benefit.
"I think it’s accurate because it was a really well-organized event," Evans said of the 2015 Super Bowl. "Scottsdale was absolutely packed for the entire four or five days. Downtown Phoenix has never seen anything like it."
Evans also pushed back on the notion that some numbers may be inflated due to pressure, saying the NFL exerted no influence on his study. Still, he advises against cities publicly financing new stadiums with the goal of hosting a Super Bowl.
"It doesn’t make financial sense to create a purpose-built stadium for an event like the Super Bowl," Evans said. "The key is to utilize an existing stadium."