By Gabby Amini
With the Super Bowl having been played earlier this week, the host city then tries to predict how much money they raked in through hotels, restaurants, the game itself, etc. Every city that hosts the Super Bowl manages to spend some of their taxpayer funds in costs associated with the game, which results in a bit of controversy.
Although most costs are covered by the NFL, the rest is a small price to pay for hosting the world’s largest sporting event. Through various leisure activities, such as dining at restaurants and merchandise spending, the Super Bowl has a large impact on these small businesses. Those who attend, usually find themselves sleeping at a hotel or some sort of rental for the weekend, which then again rolls in dough.
“The sharing economy will benefit from the Super Bowl, and people that participate with companies like Uber and Airbnb can expect to see a spike in sales when the Super Bowl comes to town,” says Carol Roth, a small business expert.
But the impact is really not as big as it seems. When one looks back at the actual data, we don’t find bumps of hundreds of millions of millions of dollars, really when an economists looks back, they find an increase of economic activity of $30 million to $120 million. Firms and Super Bowl host committees, however, annually release huge estimates for what the event might bring to the local economy.
What the Super Bowl really does is cause places to fill up much more quickly. Suddenly hotels that are usually not so crowded become completely sold out months in advance. Every activity gets racked up, whether it be restaurants booked, car services, catering and event locations.
The idea of hosting a Super Bowl has been used really as a bargaining chip when it comes to stadium negotiations between the NFL. Cities are encouraged to maintain modern stadiums and are often then awarded with hosting rights shortly after they agree to build or renovate the team's stadium. In this, so much money is lost for the project, but then gained back after hosting.
“Local host committees often commissioned studies, we do not,” says NFL spokesman Brian McCarthy. “There is no doubt that the Super Bowl provides direct and indirect benefits to local communities from the influx of visitors to the area to the dozens of charitable and legacy events that have impact long after the game is done.”
In 2003, a fellow sports economist Robert Baade published an analysis of the economic impact of every Super Bowl from 1970 to 2001. He found the game generates an average influx of $92 million, a benefit but far below some estimates that round around $300 million.
“You can probably come up with the high numbers if you count all the people that were there (in the host city), and all the money they spent, and if you assume that everyone who was going to be there anyways was still there and had no problem finding a hotel room and if the multipliers stayed the same and there isn’t money being sent back to corporate headquarters.” Matheson said.
Barrabi, Thomas. "What Super Bowl 50 Means For Host Cityu0027s Bottom Line." Web. 09 Feb. 2016.
"Here's How Much Hosting the Super Bowl Is worth." CNBC. 2016. Web. 09 Feb. 2016.
It's extremely surprising that the Super Bowl doesn't bring in as much as we would think. Yes, everything is booked and out of stock, but people only rent rooms, cars, and get dinner maybe for 3-4 days. After those few days everything clears out and it's back to normal. A spike should and most likely will occur for small businesses, however the possibilities for large corporations to experience one is scarce.
ReplyDeleteIt’s amazing how much money is involved in an event that lasts only about 3 hours. However, it’s more surprising how much firms and Super Bowl committees were off in their estimates of how much it brings into the economy. It would be interesting to not only consider how much small businesses are impacted, but also large corporations. Comparing the income of businesses like Pepsi and Frito Lay from the week before the Super Bowl to the week after, in contrast to the rest of the year could provide some significant data as well.
ReplyDeleteIf local communities can be reimbursed after hosting a Super Bowl game then I don't see a big issue with dedicating money to football. While in all honesty I'm not much of a football fan my self, I know that football is something special for millions of other people. So, as along as states can be reimbursed I can't really complain--they'll just end up back or maybe more the money that was spent. Super Bowls help hotels, cabbing companies, restaurants,etc in generating revenue. With this in mind I won't vilify the NFL. If the host of the Super Bowl doesn't generate enough money to cover what was spent I do agree that will be a problem; but because football is such a popular sport in America, I don't see any money shortages anytime soon.
ReplyDeleteAnother big impact of the Super Bowl is the commercials. Although I cannot speak for other people, I know that one of the main reasons I watch the super bowl is for the commercials. As some of the most watched segments of tv, they bring in substantially more revenue for the people who air them.
ReplyDeleteThe super bowl brings in an insane amount of press and attention. People all over the country and almost the world tune in to watch the big football game of the year. Even companies get together to create advertisements to increase their profits. So much money is used to support the superbowl and satisfy viewers that I dont think the popularity will decrease anytime soon. If small companies are getting advertising during the super bowl I think their business could definitely receive a spike in profits and recognition.
ReplyDeleteThe Superbowl is an extreme money maker. They raise the price on all of the beverages and food products because they are considered inelastic goods meaning people will buy it anyways. The level of profits the stadium brings in itself is monumental and that doesn't even account for all of the memorabilia that is being sold. The Superbowl has always been an awesome tradition and it's not going to become less popular anytime soon, no matter what teams are in it. Although the biggest aspect for many of people during the Superbowl is watching the commercials. Although it is extremely expensive to get screen time during the Superbowl, it is beneficial to many companies due to the mass amounts of people watching. Overall the Superbowl has a very positive impact on today's economy.
ReplyDeleteI think its really interesting to take a look at home major sports events, like the Superbowl, can affect the economy. I would expect that the city who hosts the Superbowl would experience an abundance of positive externalizes including increased profits for businesses and also an increase in the marginal utility that people acquire from consuming goods at the Superbowl -- things are always more fun and enjoyable on game day! Although we may tend to overestimate the influx I think it is still a pretty substantial boost in the local city's economy.
ReplyDeleteThe Super Bowl is a truly good way to make some money if your businesses is located in the hometown of the Super Bowl. Companies during the time of the Super Bowl many increase the prices because they know people will pay the prices. Also many food and beverage items at the Super Bowl will be very expensive because people want food and if they can pay to be at the Super Bowl they can also pay for the expensive food. Besides the increase in prices, many companies pay thousands to millions of dollars to be able to create an advertisement that will be streamed on tv during the game. Besides football fans, many watch the Super Bowl and end up spending money on it because it’s an American tradition that they are used to. Although a lot of revenue is coming in during this special time, businesses have to realize that the sales that were at a peak will now go down and back to normal. In the end, I believe that the Superbowl is good for the economy because all of the money spent and the amount of money made by companies and the NFL.
ReplyDeleteThe amount of money that the Super Bowl makes is pretty crazy. Even people that don’t even like football seem to find themselves watching, rather it be with a group of friends or just to see the commercials. The Super Bowl allow for that host city to properly showcase all of the amenities that it has to offer. The Super Bowl really isn’t just a one day event, many pre-Super Bowl festivities are held around the city that is able to spike up the revenue of the entire area for that one week. The Super Bowl only keeps getting bigger and better with each year allowing for more and more cities that normally wouldn’t be able to host a Super Bowl are now able to hold such an event, the stakes are higher and higher to win a bid to host the Super Bowl.
ReplyDeleteCommercials are probably the biggest part of the super bowl outside of the actual game. The super bowl is the only TV show I don't walk out during the commercial break because the commercials capture my attention. Those commercials create a lot of publicity for every company lucky enough to gain a spot in those short but entertaining commercial breaks.
ReplyDeleteThe Superbowl is like another holiday in the USA. People come together to cheer on their team, or root against their least favorite, eat massive amounts of food, and watch advertisements and the halftime show. I don't think its taken into realization how much those the half time shows benefits performers. Beyonce performed a small act in this years halftime show; she let a messaged be heard that she wanted to tell as well as perform part of a new song she just released the day after. She showed support for Black History Month by Wearing a Black Panthers costume as well as her dancers. Also she got to preform her new song "Formation" which was great exposure for her as she released her new tour dates for 2016. So I propose the question do you believe taxpayers are okay with letting performers share their own personal message and basically pay for more exposure for them?
ReplyDelete- Carson Cotterell
The Superbowl is like another holiday in the USA. People come together to cheer on their team, or root against their least favorite, eat massive amounts of food, and watch advertisements and the halftime show. I don't think its taken into realization how much those the half time shows benefits performers. Beyonce performed a small act in this years halftime show; she let a messaged be heard that she wanted to tell as well as perform part of a new song she just released the day after. She showed support for Black History Month by Wearing a Black Panthers costume as well as her dancers. Also she got to preform her new song "Formation" which was great exposure for her as she released her new tour dates for 2016. So I propose the question do you believe taxpayers are okay with letting performers share their own personal message and basically pay for more exposure for them?
ReplyDelete- Carson Cotterell
Whether or not a city should host Superbowl is a game of costs in benefits in which the benefits ultimately outweigh the costs. You did a nice job explaining all of the costs associated with hosting Superbowl including maintenance to stadiums and any inconvenience to those living in the area. However, the publicity combined with the surge of consumers leads to a significant amount of monetary benefits, as you mentioned. The money that the Superbowl generates, however, is not reserved for the host city. The NFL makes a huge amount of money as a result of ads and apparel sales while other firms benefit from the increased publicity due to ads and apparel shops see an increase in demand for the 2 opposing teams. Even the local grocery stores see an increase in purchases as consumers are willing to splurge a little for their game-day parties.
ReplyDeleteOverall, I thought that your blog post was insightful and interesting. The Super Bowl, although costly to a city, is far more beneficial, as the city experiences a great influx in tourism, which in turn contributes to an economic boom in that city. The data concerning the economic effect of the Super Bowl is astounding, but I think your post would have benefited with visual/graphic representation of the effects. It is interesting to add that although the city does receive profit from hosting the Super Bowl, the NFL and the station that presents the Super Bowl (CBS) make a lot more on commercial advertisement and other items such as apparel. Also, game day parties and other advertisement on food items contribute to a growth in profit for stores such as Wal-Mart or Pick'n'Save. So although the Super Bowl causes an economic boom for the host city, there are also many other economic advantages for companies. Overall, nice job!
ReplyDeleteGood blog. Held a lot of information from the financial stand point of the Super Bowl that I honestly never thought about. The economic impact on the city that hosts the Super Bowl, I feel, is never really thought about and it's good to see some of those facts. Overall, great blog banana
ReplyDeleteGood blog. Held a lot of information from the financial stand point of the Super Bowl that I honestly never thought about. The economic impact on the city that hosts the Super Bowl, I feel, is never really thought about and it's good to see some of those facts. Overall, great blog banana
ReplyDeleteI think it would be very interesting to find what sort of money is lost and gained by rennovating a stadium, and over what span of time before the city breaks even. Part of your article makes the sudden increase in people in the city a bad thing, but wouldn't that translate into a lot of money for those businesses?
ReplyDeleteThis blog post was very well done and has some great points about the topic. When a city hosts a super bowl some locals like it and some don't, this is a reasonable argument because they are probably going to pay taxes for this at some time. But overall the Super bowl will benefit the community as a whole in the long run because of all the revenue it brings in. Not only does money come in from the game but from restaurants, hotels and other businesses as well. And even if the Super bowls isn't bringing in $300 million like some think, it's still racking up around $100 million which sounds pretty good.
ReplyDeleteI agree with the fact that the super bowl brings in more money than taken away from the tax payers dollars. It is great for the economy around it, because all the businesses will be busy. It's great for businesses because they know weeks in advanced what they should be making, and selling. The super bowl brings in more many than it takes, and it is great for all the small businesses, and could help out unsuccessful businesses around the area of the super bowl.
ReplyDeleteThis was done very well. I think the information was very interesting and and made some good points. I think the city could gain a lot of profits when a super bowl is hosted in a town, but its a good question if the city will make the money back from all of the renovations, or how long it will take.
ReplyDeleteThe amount of money made from the superbowl is absolutely crazy. All the pre-super bowl festivities and parties bring in so much revenue. Overall, I think that holding a super bowl would benefit a community tremendously. I think that the benefit of hosting a super bowl outweighs the cost. The super bowl will benefit local business and stores as a result workers will get payed more and unemployed people will be getting jobs therefore unemployment will be lower thus making the economy a lot better. In addition the community will be able to build new things and do repair on their community with all the income from the super bowl.
ReplyDeleteI thought your post was well written and did a good job of noting the effects of the super bowl on a city's economy. Personally, I don't know how much a stadium costs to build, but even if it costs more than the city's profits from the super bowl, I have to believe that the idea of the city hosting the super bowl is influential for business owners as they would be more optimistic towards their city's potential profits. This optimism increases spending in many aspects that I think would increase the overall welfare of the economy.
ReplyDeleteIt's interesting to see just how having one event in a city could completely alter its economy. While some may view the economic boost as a positive externalities, citizens of the hosting city may view as the sudden influx of tourists as a negative. I believe that the money made by the NFL and the Superbowl should be enough to cover the costs without government backing. It is the NFL that will be receiving most of the profits, so they should be the ones that pay for the event, despite the limited benefits given to the city's economy during the one weekend.
ReplyDeleteWhile the costs of building a stadium certainly are not covered by the revenue generated from a single Super Bowl, there is also no doubt that the Super Bowl is a significant event for most cities which host one. Super Bowls benefit communities not only from the revenue they bring in, but also by incentivizing a city to build a state of the art entertainment venue, which cities can use for other entertainment or economic events.
ReplyDeleteSuper Bowls are huge economic impacts to the host city. It crazy to see how much consumers spend for one event the the result in an impact to restaurants, hotels, and ticket sales. It also is a major impact for the small business in which increases their income. I think that this was clearly talked about how the impacts are not as big as they seem. As it only produces an average influx of $92 million when people estimate that it will impact the city to around $300 million. But overall this was a good topic to talk about and you did a good job portraying the impacts as well as what people think of how much the cities are getting.
ReplyDeleteSuper Bowls are huge economic impacts to the host city. It crazy to see how much consumers spend for one event the the result in an impact to restaurants, hotels, and ticket sales. It also is a major impact for the small business in which increases their income. I think that this was clearly talked about how the impacts are not as big as they seem. As it only produces an average influx of $92 million when people estimate that it will impact the city to around $300 million. But overall this was a good topic to talk about and you did a good job portraying the impacts as well as what people think of how much the cities are getting.
ReplyDelete