The Party’s Over
If the Super Bowl were coming to Los Angeles on Sunday, hotels such as the Century Plaza in Century City, the Biltmore and Bonaventure downtown and the Ritz-Carlton in Pasadena would be booked solid, their lobbies hubs of pregame activities.
Around town, caterers and event planners would be frenzied, each trying to top the others with such lavish flourishes as the 275-foot replica of Santa Monica Pier built for an NFL party at the Rose Bowl in 1993 -- the last time the Super Bowl was played in the Los Angeles area.
“It seems like a million years ago,” said Patricia Ryan, president of Party Planners West, the Marina del Rey company that planned the pier gala.
The first Super Bowl was in 1967 at the Coliseum, and seven of the first 27 Super Bowls were played either at the Coliseum or Rose Bowl.
But since the departure of the Raiders and Rams after the 1994 season, the Super Bowl has not returned, taking an annual economic bonanza the NFL estimates at more than $300 million -- though some economists put the figure at considerably less -- to cities that have teams.
NFL officials seeking to put a team in Los Angeles as soon as the 2008 season estimate a decade without pro football might have cost L.A. three Super Bowls.
“You’re talking close to a billion dollars,” said Neil Glat, NFL senior vice president of strategic planning and business development.
Others are skeptical of such claims, including some economists.
“Ultimately what the NFL is arguing is, if a city puts up a $300-million stadium, it gets it back in one year from the increased economic activity from a Super Bowl. That is hyperbole,” said Robert A. Baade, a professor of economics at Lake Forest College in Illinois, who said his analysis suggests a more likely figure of $90 million.
The NFL, frustrated by academic criticism of league-sponsored studies, has invited economists to attend the game and produce independent reports.
“We could understand a figure like $200 [million], $300 [million] or $400 million, but when somebody says there is no economic benefit to a Super Bowl, we don’t think it passes the laugh test,” Glat said.
The Super Bowl is a mega-event capable of putting smaller cities on corporate decision makers’ maps, promoting tourism and injecting a shot into the local economy.
But exactly what not having the Super Bowl means to the vast and diverse Los Angeles economy is more difficult to say.
Even as the buildup peaks for Super Bowl Sunday in Jacksonville, Fla., the Century Plaza and Biltmore in Los Angeles are sold out, and the Ritz-Carlton in Pasadena and the Bonaventure expect to be above 90% occupancy, with large groups and conventions in-house.
Ryan, president of one of the L.A.'s largest event-planning firms, won’t be in Los Angeles: She’ll be in Jacksonville, where her company is producing the NFL Experience fan festival and the NFL’s invitation-only tailgate party
“We’ve been lucky enough to work with the NFL every year since ’83,” Ryan said. “Wherever it’s going to be, we go.”
There is considerable debate about exactly how big an economic event a Super Bowl is, but there is not much question it has grown dramatically since the Rose Bowl played host to Super Bowl XXVII in 1993.
A study by the UCLA Anderson School of Management after the game estimated that the event had generated $182 million for the L.A. area: $81.6 million in direct spending and $100 million from the so-called “multiplier” effect, a somewhat controversial component of economic-impact studies that attempts to measure how much money will recirculate within the economy.
“Even though some of the studies can seem self-serving, I think, conservatively, you’re now looking at $200 [million] to $300 million in local economic impact,” said David Simon, president of the Los Angeles Sports Council, which was instrumental in bringing the Super Bowl to the Rose Bowl in 1993. “It would have been nice to have three or four since then. We’ve missed it.”
By one estimate, the economic effect of a Super Bowl might have doubled since L.A. last had one.
After Super Bowl XXXVII in San Diego in 2003, a study jointly sponsored by the NFL and the San Diego Super Bowl Host Committee estimated the economic benefit to San Diego County at $367 million.
Michael Casinelli, president of Marketing Information Masters Inc., a San Diego firm, said almost 61,000 of the 67,603 spectators who attended the game were from out of town. Together with those who traveled to San Diego for parties or other related activities, the study estimated that those visitors accounted for 168,000 nights in area hotel rooms.
Extravagant corporate parties have become one of the hallmarks of the Super Bowl, and Casinelli’s report said 133 out-of-town companies spent $61.6 million in San Diego during Super Bowl week. (The NFL itself spends $3 million to $5 million putting on parties at the Super Bowl, league sources said.)
The media that generate much of the game’s hype also are a significant factor. Casinelli attributed $12.2 million in spending to those covering the game.
Skeptics say that among the problems with such projections is the failure to consider what doesn’t happen when the Super Bowl is in town. Some locals stay away because of crowds, and in many cities, other tourists and business travelers would fill hotel rooms if the Super Bowl were elsewhere.
Allen Sanderson, a University of Chicago economist, cites the situation in 2002 when the NFL delayed Super Bowl XXXVI in New Orleans by a week after postponing games because of the Sept. 11 terrorist attacks.
“The NFL called New Orleans and said, ‘We’re not coming this date, we’re coming a week later,’ and New Orleans said, ‘You’ve got to be kidding. We’re fully booked,’ ” Sanderson said.
The NFL eventually agreed to pay the National Automobile Dealers Assn. $7.5 million to swap convention dates.
The issue isn’t only whether hotel rooms are full throughout a wide area, but at what rate and for how long, said Michael Collins, executive vice president of LA Inc., the city’s convention and visitors bureau.
“What happens with the Super Bowl is, it substantially boosts occupancy, but what’s far more important to businesses, it’s at a rate that’s extremely high,” Collins said.
“It’s the published rate -- not gouging, but the rack rate that’s published on the back of the door -- and it’s usually a four-night minimum.”
Furthermore, some researchers say, people who travel to Super Bowls have more money to burn than a family that drives down for the weekend.
Casinelli, author of the San Diego Super Bowl study, said a typical Super Bowl fan might have an income of $250,000, versus $75,000 for other visitors.
Kathleen Davis, president and chief executive of Sports Management Research Institute, a South Florida firm, estimated the economic effect of Super Bowl XXXIII in Miami in 1999 at $396 million, citing daily spending of $400.33 by the average Super Bowl visitor, compared with $99 to $199 for visitors the rest of the year.
“They’re more affluent, they have more income to spend, and they like to party,” Davis said.
Still, the L.A. economy remains a different creature.
“The scale of the thing, people don’t quite understand,” said Jack Kyser, chief economist for the Los Angeles County Economic Development Corp.
Even if the economic effect of a Super Bowl were well over $300 million, it would represent less than 0.1% of Los Angeles County’s $374-billion economy.
“It’s an almost insignificant blip,” Kyser said.
“The L.A. County economy is bigger than Switzerland, Belgium, Sweden and Taiwan,” Ky- ser said. “The five-county area is $654 billion -- larger than Mexico and South Korea.”
Trying to gauge the effect of a four-hour football game on the L.A. economy might be like trying to find a specific blade of grass on the football field at Jacksonville’s Alltel Stadium before the game Sunday. There is simply too much else to look at.
In 1993, first-quarter retail sales in Los Angeles County totaled $11.23 billion -- a figure that was actually lower than the data for the same period the year before and the year after the Super Bowl was played here.
“It looks like no impact,” Kyser said. “But if you go back to ’93, the Super Bowl wasn’t quite the type of event it is now. It’s gathered momentum. And the early 1990s were a period of great economic restructuring, with the aerospace industry contraction, the riots in ’92, the earthquake in ’94.”
No matter the bottom line, many in the Los Angeles hospitality industry would love to see another Super Bowl here -- something that could happen as soon as 2010 if a team begins play in 2008.
Gregg Smith, owner of the Parkway Grill in Pasadena, recalls the hubbub and private parties of ’93.
“It was crazy,” he said. “It’s a heck of a good week.”
Larry Dean, director of catering and convention services at the Century Plaza, said the Super Bowl was “great business.”
“The restaurants are busy, the bars are busy,” Dean said. “And I think the Super Bowl is good for the whole city because the whole city fills up. When the Super Bowl is here, everyone is full.”
In terms of scale, the Super Bowl falls among such events as a political convention, which dampens local spending because of security and traffic and results in surprisingly little additional spending, the Academy Awards at $120 million, and an Olympics. (The 1984 Los Angeles Olympics generated an estimated $1 billion.)
Yet there remains something intangible about a Super Bowl, a gut-level excitement.
“I don’t think people in cities that have the Super Bowl are sitting around thinking, ‘I’d rather have the World Congress of Gastroenterology’ -- although those are customers of ours, and good ones,” said Collins, the head of the convention bureau.
“The Super Bowl is hard to quantify, but it’s like the Rose Parade, it reminds tens of millions, hundreds of millions in the case of the Super Bowl, just how nice a part of the world this is. It affirms a very positive message about L.A. as a place to visit.”
If the NFL became a regular visitor again, without moving in permanently, it would be fine with Kyser, who points out that the biggest economic benefits of having an NFL team come from having the Super Bowl, not regular-season games that don’t generate a lot of hotel stays, catering bills or limousine rentals.
“The perfect scenario would be to get the NFL to give us a Super Bowl every other year and forget nagging us to get a team,” Kyser said. “The people at the Coliseum, the Rose Bowl and Carson won’t like that, but I’m an economist, and I choose to go for the green.”