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Economists Reject NFL’s Inflated Estimations Regarding the Impact of the Super Bowl to Host Cities

Steve Shoup

Miami will set a record in 2020 following its confirmation of hosting the Super Bowl for the eleventh time. The only issue lies with the uncertainty that South Florida would gain from the event. Online NFL lines are eagerly waiting for the Miami-based Super Bowl LIV event, which will take place in Stephen Ross’s upgraded stadium worth $450 million. The NFL owners had constantly rejected his bid to host the event in the stadium because it did not match the required standards.

 

After the announcement, the owner of Miami Dolphins stated that, as the hosts, they would have an advantage over their rivals, which should make them win most games in the end. Even with such projections, the big question is whether NFL estimates reveal the truth about the benefits derived from the Super Bowl by the host cities. Many economists have rejected the NFL’s estimations of $700 million worth of benefits, up from $400 million that host cities gain from the Super Bowl. The economists argue that the economic impact of the event is inflated because the NFL does not consider the operations of the host city before the Super Bowl.

 

For instance, when San Francisco hosted the Super Bowl in February 2016, the rate of hotel bookings was approximately 90%, which showed that fans filled spots that other people would have occupied. Furthermore, residents avoided the area surrounding the event due to insecurity, congestion and traffic. According to Professor Andrew Zimbalist from Smith College, the NFL performs their studies based on impractical assumptions and fabricated approaches.

 

Even with various circumstances surrounding this issues still independently observed, several economists have openly argued that host cities of the Super Bowl barely benefit from the event. Many of them also claim that host cities even lose money by quoting Jerry Weiers, the Mayor of Glendale, Arizona. He uttered these sentiments to ESPN before the 2008 Super Bowl hosted by Phoenix. After Super Bowl XLII, estimations showed that $1.6m was lost during the event.

 

The NFL does not bear the overhead costs incurred by the host city during any Super Bowl event. For example, San Francisco spent approximately $4.8 million during the week of the Super Bowl to keep the city services running, which the NFL did not compensate as usual. The costs include paying extra police officers, security guards, and many other security measures to maintain peace.

 

Another key issue is that the NFL always wants compensation from the host city if they offer them hosting rights, which re hidden costs that they rarely mention. The 2014 bid document of the event showed that the NFL requested host cities to provide anti-counterfeit teams with local police officers at no cost. Their requests also included 20 billboards at no charge, and that the city’s organizing committee should cater for the travel expenses for 1,880 inspectors. The league also required meeting spaces at hotels at no cost. However, the NFL did not reimburse the $36.9m worth of taxpayer money used to fund the 2014-Super Bowl.

 

The unique advantage that Miami has is a $4 million bonus that the country owes Stephen Ross as stipulated in the agreement regarding the stadium renovation. If the team secures some list of events, the county government would offer the owner $4 million. Miami has the advantage Ross built the stadium and secured the Super Bowl without using taxpayers’ dollars. As such, the public will not pay for the stadium after the event to clear debts.

 

City costs and economic impact are two different things. During the event, prices of different products and services nearly double, such as hotels, alcohol, food and many others. However, the economy of neighboring cities usually suffer because the event draws their customers away. Therefore, the game brings about a tussle between neighboring cities depending on the products and services they have to offer, such as the hotel accommodations and entertainment.

 

However, the estimates presented by the NFL are not entirely null and void. Some economists claim that the economic impact of the Super Bowl to the host cities could reach around $30 million. This is a very low figure compared to NHL’s inflated figures. Therefore, it will take a while to know the real estimation of benefits that Miami would gain from hosting the event in 2020. The figures presented by the NFL have been leaked from past Super Bowl events. As we await that day to come, the fact that Miami will host the event would lead to the creation of several temporary jobs, media coverage, and many other benefits. Consequently, the genuine estimate of the money the Super Bowl would make for Miami will be known.

 

 



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