Does Super Bowl Math Add Up?
Monday, January 06, 2014
This year’s Super Bowl at MetLife Stadium in East Rutherford, N.J., is predicted to bring a half a billion dollars to the New York and New Jersey region. But economists don’t expect to see that kind of cash raining down on the Garden State.
“Well I don’t know, first of all, if that number is real and I don’t know where that number came from," said Secaucus Mayor Michael Gonnelli. "But I would say a good portion of that number is going to New York.”
The estimate comes from the Super Bowl’s NY/NJ Host Committee, but economic studies and past experience show Super Bowls rarely bring that kind of cash to a host city.
“When independent economists not working for the NFL and not working for the teams and the leagues have gone back and look at cities who have actually hosted the Super Bowl what people get are economic impacts ranging somewhere between say 30 and 120 million dollars,” said Victor Matheson, an economics professor at the College of the Holy Cross. in Massachusetts. “So again not something you’d turn down but it’s also a fraction of that $500 million claim the NFL is coming up with.”
Part of the problem, Matheson says, is that when hotels fill up with tourists for one event, attendance for other events go down. He saw this in 2004 when New York hosted the Republican National Convention.
“Attendance of Broadway shows that week was actually down 20 percent compared to what it was weeks before and the year before at the same time,” he said.
New Jersey Public Radio examined data from the 2011 Super Bowl in Dallas, which was played 21 miles east, in Arlington, Texas.
Sales tax revenue in Arlington – and even nearby Dallas and Fort Worth – saw a minimal rise. There was only one area where there was a large revenue increase: hotels.
“That’s because when these events occur, the price of hotel rooms goes way up,” said Philip Porter, an economist at the University of South Florida.
But extra hotel profits doesn’t mean there’s more money circulating in the local economy. The salaries of the front desk clerks and housekeeping staff stay flat, Porter says. And most hotel chains are headquartered elsewhere.
“So when the price goes up that doesn’t help the local economy,” he said.
Merchandise sales don’t help the local economy either. New Jersey doesn’t have a sales tax on clothing, and many licensed NFL vendors are not local, Porter said.
New Jersey also lost out when it came to the one of the Super Bowl’s big money makers: the NFL Experience. That’s a lucrative pop-up theme park that is usually situated close to the stadium in the days before the Super Bowl is played.
It was one of the key things even Gov. Chris Christie hoped to see in New Jersey when he discussed New Jersey’s bid for the Super Bowl in 2010.
“If you look at the bid, which is now the blueprint for the host committee, there is significant activity going on in New Jersey,” Christie said. “The party the night before the Super Bowl will be in Liberty State Park. The NFL Experience and the NFL Tailgate parties will be at the Izod Center and at the Meadowlands Track.”
But the host committee, the corporate organizers of the Super Bowl, decided not to put the NFL Experience in New Jersey. Instead, a scaled down version is in midtown Manhattan.
That decision disappointed New Jersey mayors and businesses.
“Because if it were in New Jersey then less people would be apt to travel in New York City," said East Rutherford Mayor James Cassella. "If the NFL experience was situated in New Jersey they’d have a tendency to stay in New Jersey, be spending their money in New Jersey.”