If you want a good concrete example of how Super Bowl economic-benefit claims are bunk, just keep in mind this paragraph from a Sunday New York Times article on the subject:
In a forthcoming paper, [Berry College economist Frank] Stephenson examines the 2012 Indianapolis Super Bowl, which generated 224,000 hotel stays, according to its economic impact report. Indianapolis serves as an apt comparison to Minneapolis since it is a cold-weather city in the Midwest. Actually, in the week leading up to the Super Bowl and the three days afterward, Indianapolis hotels rented an additional 49,000 rooms compared with what would be expected, less than a quarter of the estimate.
That is a large discrepancy! We’ll have to wait for Berry’s full paper to get into the nitty-gritty of where all those Super Bowl visitors are staying, but it certainly helps explain why other economists like Holy Cross’s Victor Matheson have found the economic impact of the game to be less than a quarter what the NFL and host cities claim.
Stephenson goes on to note that there’s likely a ton of leakage of that money from the local economy, since fans “don’t give it to the housekeeper or bellboy or front-desk person; a lot of it just flows to whoever owns the hotel” — or as Matheson once put 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.”
Meanwhile, the city of Minneapolis is spending $50 million on hosting the game (on top of the billion dollars or so it put into the Vikings‘ new stadium that’s hosting it), though it says it’s raised it from corporate donors. I think I’ll wait to see what the actual numbers look like after the fact, though — it’s becoming increasingly clear that when it comes to the Super Bowl, you want to check the final bill, not the initial estimates.
Team owners aren’t necessarily in the business any longer to run teams to win championships. They are in the business of acquiring new stadiums for their co-op.
Somewhat amazing that an actual study was required to call those numbers into question. There were 68,000 fans at that Super Bowl in Indy. It’s not a vacation destination at that time of year so safe bet very few were tacking on extra time beyond the Super Bowl. Assuming every single one of them had their own hotel room that’s every one of them staying 3+ nights–except a large percentage attend the game with friends or family so you end up with them all needing to have stayed in a hotel for nearly a full week just to attend a football game. Does anybody buy that actually happened?
Often hotels require that you book a full week if you want to stay there during the Super Bowl, because they can.
I guess the reason a study was required was the same reason that politicians and NFL flunkies feel compelled to spout this nonsense–nobody has bothered to challenge the company line.
And that I put “22%” in the headline – people treat any numbers as if they’re more valid than general descriptions. At least 73% of polls show this to be the case!
We’ve told you a million times–don’t exaggerate!
It’s basic imprinting… keep repeating the same ridiculous line, no matter how bogus, and eventually it will show up as “fact” in someone else’s mind.
Let’s do a test:
Ted – Hillary – Marco
Was your response “Lyin, Crooked and Little”?
This stuff really works doesn’t it!!!
My response was “Who are Sally Forth characters?”
Clearly there is something wrong with my cultural media consumption.
I’d say you’ve missed out on a bunch of things that no one would really miss if they hadn’t had the misfortune to see them in the first place. Lucky you.
Don’t recall a Marco in Sally Forth
It looks like the ‘misunderstanding’ is a as simple as the NFL taking credit for every hotel room sold during the super bowl 10 day period, versus taking credit for only the ADDITIONAL hotel rooms sold. That is to say plenty of hotel rooms are sold whether or not a super bowl takes place.
There’s a lot of ambiguity when it comes to “stays”, “rooms”, and “days” and “nights”…I imagine the numbers can be tortured into any configuration the proponent wishes.
It seems like every single arena-proponent out there says, “See? Hosting the first 2 rounds of the NCAA tournament justified building the arena all by itself!”.
As usual, the Econ profs ignore jobs when hating on the economic impact of big time sports.
Also, there is absolutely no way that the 2012 Super Bowl created only 49,000 room nights for Indy area hotels. Though it will be hilarious to read how the Econ prof conjured that number, whenever he releases his eagerly anticipated “forthcoming paper”.
Just guessing here, but I’d imagine it was “subtraction.”
Neil,
That’s my guess as well, because that’s how lazy “research” is done.
It’s actually how “math” is done.
Watch the SotU. It doesn’t matter what the facts are, the fact is the NFL… economic stimulus…. jobs…. safety…. prosperity… #winning…. Tiger Blood.
Sure, maybe only 49,000 hotel rooms nights were actually booked during that period by paying customers. But don’t forget the economic impact of the other 180,000 comped hotel rooms for, well, me. And NFL committees and other executives. Owners, can’t forget the owners. And then the other 179,146 were for our personal security details.
It’s not our fault if people don’t like us. It says right in the contract that that is the host city’s problem.
And none of this changes the fact that everyone who doesn’t live in a city with an NFL franchise has to live in a cave with no running water (except for the stuff that drips in and that can’t be good for you). These are facts people. I had our rheumatologist (oops, neurological consultant) look them up.
Ben,
According to this article, Marion County (Indianapolis) has about 22,000 hotel rooms, with 7,400 downtown. https://www.indystar.com/story/news/2016/08/21/can-indy-support-more-hotels/88992642/
In a great year (2017), they had 70+% occupancy. Indy is a big convention city, so the Super Bowl (an average year, around 58%)probably displaced an event that may have taken place anyway–perhaps even with fewer tax giveaways than the Super Bowl gets (albeit with less publicity). There are probably fewer hotel rooms than people think, so the “bottom number” of the equation probably isn’t that big. Some service folks probably stayed way out.
What the “Econ Profs” and people who actually run businesses will tell you is that running a successful service business takes a good staff, good marketing, and good outreach to get solid, repeat business.
Nobody is going to retire from the restaurant or hotel business because they had a great week for the Super Bowl–a one-time event won’t cause an expansion and they still need those weddings, graduation dinners, and conventions from word of mouth and good experience to lower marketing costs. The “profs” who study job impact are fare more interested in these types of businesses than the pop-up coffee cart that shows up for the Super Bowl.
It’s amazing how many people make a big deal of hosting an event that is going to occur, at most, once every 10 years in a particular city, where most of ‘economic impact’ winds up as leakage via the substitution effect. On further reflection, it is disgusting.
GDub,
The point is that Econ profs don’t study the impact sporting events have on job hours, ostensibly because it ruins the narrative that sports ball is a waste of government resources.
Job *hours*? They do study per-capita income — you can find some of those studies under “research” above — but who on earth considers it a public benefit if you’re working more hours for the same pay?
They do study employment (temporary or otherwise) created by events and ‘investment’ in facilities. As with any research, some do a better job than others, and some do research at the behest of non-arms length parties. No different than drug companies, really. They might fund 50 studies and only release the results from the 2 they like the outcome of.
I’m not sure if you think “job hours” are something different from employment or not, but reputable economists do study any and all spinoff economic activity from a given event or investment (public or otherwise).
So, it seems you are suggesting that economists don’t study something (that they definitely do study) in order to avoid having to admit something that really isn’t true.
Isn’t that more of a Goldman Sachs thing?
Ben,
Job hours? Over two weeks???
Maybe you can find a non-math Using report that outlines what you are after…
Indy will never host another SB, nor will Minnesota. That ruse worked to get those stadiums. On to another “drive by market” scam.
Anyone else remember the great 49ers/Bengals Superbowl in the Silverdome in Pontiac?
Lots of space available for tailgating in the parking lot…