For Host Cities, It’s A. . .Jackpot

The Super Bowl is more than a game: It’s an industry. But the economic benefits of hosting the NFL’s showcase event--and the weeklong revelry that precedes it--can’t be measured as precisely as the rushing yards Denver’s Terrell Davis or Atlanta’s Jamal Anderson will gain in Super Bowl XXXIII today at Pro Player Stadium.

The direct and secondary impacts seem immense when 100,000 people descend on a city, stay in its hotels, ride in its taxis, rent limousines, eat at local restaurants and buy souvenirs and other merchandise. It’s enough to make any chamber of commerce salivate.

“The biggest change on the economic impact in recent years is people coming to the games,” said Jim Steeg, the NFL’s vice president for special events. “We used to think there were 15,000-20,000 people who came to the host city and never went to the event. Now we think it’s 30,000-40,000 and that has a lot to do with the economic impact. We look at the type of person and what it can mean business-wise. Fifty-nine percent of the people who come to the game are decision-makers within their corporations. . . . For Miami, this is an opportunity to become more of a decision-makers’ destination.”

While civic boosters love all that spending, they say enhancing the host city’s image might be even more valuable. It’s a priceless advertisement when an estimated 130 million TV viewers see the city portrayed as a desirable place to vacation and hold business meetings.

Studies done for host committees say the Super Bowl’s economic impact on a city can exceed $300 million, although the criteria in the studies are not identical. A study by UCLA’s Anderson Graduate School of Management determined the last Super Bowl at the Rose Bowl in 1993 had a total impact of $182 million. With ticket prices higher, the impact could be considerably larger should Los Angeles get a new stadium and a Super Bowl; NFL Commissioner Paul Tagliabue said Friday he assumed Los Angeles would apply to host the 2003 game if San Francisco can’t complete its proposed stadium on time.

“The reason the Super Bowl is so valuable as compared to the average football game is most of the people in the seats come from out of town,” said David Simon of the L.A. Sports Council, which was the host committee for Super Bowl XXVII. “Compare that to a USC game. The Rose Bowl, unless USC is playing, is not going to have a lot of local people there.”

PriceWaterhouseCoopers LLP found Super Bowl XXXII at San Diego drew 122,000 visitors, including 56,000 who didn’t attend the game. It generated $16.4 million in increased tax revenues for the city, county and state, $3 million for local charities and had a total economic impact of $295 million.

“We bid for it again in October and we were finalists with New Orleans for 2002 but lost,” said Jim Brown, a San Diego auto dealer who was chairman of the Super Bowl XXXII host committee. “We’re supposed to be the leading candidate for 2004. We want it because the financial impact last year for us was tremendous.

“Normally, this is the slowest time of year for us. Our peak is summer. When you have the Super Bowl in Miami or Arizona, it’s near their peak [tourism] time, anyway, so for us, relatively, the Super Bowl has greater impact. People have commented to me this week how much they miss the Super Bowl activity that was here a year ago and the visitors to town. Even more important was the psychological impact and how much fun they had.”

A study by Barry University after Super Bowl XXIX in Miami put the direct impact on Dade County (in which Miami is located) and adjacent Broward and Palm Beach counties at $204.5 million. Indirect impact added $160 million. Direct impact can be defined as new dollars brought to the area, such as paying for a hotel room that otherwise would have been empty; an example of indirect impact is the hotel buying more food from local vendors to feed its extra guests and hiring more valets to park guests’ cars.

In addition, tax records for 1994, 1995 and 1996 in the three-county area show a big spike in January, 1995 for the convention development and tourist development taxes, which are imposed on transient lodging, food and beverages, compared to the previous and following years.

Of course, this is the busiest time of year in Miami and without the Super Bowl, hotels that are completely full would be at 85% to 90% occupancy. Joe’s Stone Crab and trendy South Beach clubs would still have long waits. But if the increase directly attributable due to Super Bowl XXXIII is small, it has a potentially wide ripple effect.

“The benefits are measured two ways. One of them you can’t measure--we just know it exists--and that’s the marketing impact in this area,” said Alex Munoz, executive director of the South Florida Super Bowl XXXIII host committee. “This is a service-, tourist-based economy here. And by attracting the game we’re probably in competition with all the other Sunbelt cities to get the game. It keeps us on that map of major events. We had the Summit of Americas, in which every president from the free world came here. We had the Super Bowl a month later. Olympic soccer games were held here. The Pope came to visit. You have to do this. If you don’t do it, you start to slide. . . .

“I speak to all of our tourism officials, all three of our convention and business bureaus, and they say, ‘Just tell me when I can bid on it again, and I’ll bid on it again.’ They want it back as soon as possible.”

That’s primarily because the Super Bowl has a high-spending corporate clientele. The price of tickets, transportation and the four-night, premium-rate stay required by hotels have put the game beyond the reach of most fans. The Barry University study, which surveyed 4,000 people at hotels, airports, restaurants and Super Bowl-related events, found 37% of the visitors in South Florida for Super Bowl XXIX came from the cities of the participating teams. The rest were corporate, media and NFL officials.

“You’ve typically got a combined household income of $53,000 [among tourists in] Broward County. When you look at the income of Super Bowl attendees, you have incomes of $90,000, $110,000--double what the typical household income is of people coming down. So these people have more to spend,” said Dr. Kathleen Davis, who headed the Barry study and is now developing Florida Atlantic University’s sports management program. “If they are displacing [other tourists], they are displacing with people who have double the income.”

Davis and Tagliabue disputed a claim last week by Philip Porter, a professor of economics at the University of South Florida, that studies have exaggerated the Super Bowl’s bounty in part because they used flawed models and methodology. Porter said the 140,000 visitors to Miami in 1995 took the place of tourists who would have visited but were squeezed out, so no money was added to the local economy.

Davis acknowledged she told the NFL that studies should use similar techniques and methodology to be consistent. However, she still thinks Porter is wrong.

“He’s doing some crystal-balling. When the Super Bowl was in Tampa [in 1991] he didn’t do the study,” she said. “All I know is from my perspective. I believe in getting in the trenches, and we did. We did on-site analysis of people that came down here. . . . The displacement theory is something we have examined. We don’t see a crowding-out effect because people are used to tourists here and we’re able to handle it. We have snowbirds every year.”

Tagliabue recognized the Super Bowl doesn’t have as dramatic an effect on a tourism-reliant city such as Miami as it does elsewhere, but he said the exposure brings immeasurable benefits. “The studies that have been done have been realistic [in] that they show very, very strong short-term upswing in economic impact, and also a lasting benefit over the long term,” he said.

Winter tourism couldn’t have accounted for the mini-boom generated by Super Bowl XXVI, in Minneapolis. A study by a University of Minnesota economist determined the total economic impact was $120 million, including $37 million in wages and salaries. “It wasn’t replacement dollars. It’s fair to say these people wouldn’t have been here otherwise the last weekend of January,” said David Mona, a Minneapolis communications executive who was vice president of the host committee. “Hotels were filled and they wouldn’t have been otherwise. It is absolutely the slowest time of the year for us.”

In Atlanta, where tourism is a smaller component of the economy than in Miami, the impact of Super Bowl XXVIII was measured at $166 million. Kerry Hendry of the Metro Atlanta Convention and Visitors Bureau said an impact of $250 million is projected for Super Bowl XXXIV next January at Atlanta.

The impact another Super Bowl will have in Los Angeles is difficult to estimate without knowing the new stadium’s capacity. But knowing the Miami area today will host its third Super Bowl in 11 years since a new stadium replaced the decrepit Orange Bowl, stadium advocates in Los Angeles can dream of rejoining the Super Bowl rotation and causing some economic ripples.

“The Super Bowl is really unequaled for the impact in the length of time,” Simon said. “Does it justify building a facility? No, I don’t think so. But if you assume you’d have two or three every 10 years, that’s a tremendous plus. . . .

“Sponsors and networks really didn’t like going to Phoenix and Minneapolis. If you push the NFL to the wall and ask its three favorite places, they’d say South Florida, New Orleans and Los Angeles. But they can’t come to Los Angeles for a while. We’ll have to see what happens with the NFL and Los Angeles.”

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Super Money

Total economic impact of recent Super Bowls (in millions):

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Year Site Impact 1987 Pasadena $80 1988 San Diego $136 1989 Miami $144 1990 New Orleans $123.2 1991 Tampa $118 1992 Minneapolis $123 1993 Pasadena $182 1994 Atlanta $165 1995 Miami $204.5 1996 Tempe $200 1997 New Orleans $250 1998 San Diego $295

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Sources: NFL and studies done for Super Bowl host committees

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