Tevlin: $500M boost from hosting Super Bowl? Super bogus

  • Article by: JON TEVLIN , Star Tribune
  • Updated: January 28, 2014 - 7:47 PM
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Gov. Mark Dayton shook hands with members of a steering committee organized to convince the NFL to bring the Super Bowl to Minnesota in 2018: (left to right) Vikings V.P. Lester Bagley, Timberwolves' Rob Moor, Michele Kelm-Helgen of the Sports Facilities Authority and Melvin Tennant of Meet Minneapolis.

Photo: Glen Stubbe, Star Tribune

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We’ve barely broken ground on that new football stadium across the street from where I write, and already we’re starting to see the benefits, just like they promised.

Super Bowl, home boy, cash money, to paraphrase Vikings great Randy Moss.

Gov. Mark Dayton and a collection of the area’s top business leaders held a news conference Monday to reveal that if we get that stadium built on time, and the NFL has not been sued out of existence by then, we might just (wink, wink) be a contender to host the big game by 2018.

You know what that means.

Sure, it means third-rate rock bands playing “The Yard” and guys in face paint vomiting behind the berms at the federal courthouse. But it also means a half-billion-dollar boost to the local economy, if you believe the NFL and its boosters.

And if you believe the NFL and boosters, you may have recently taken a helmet-to-helmet blow to your brain, economists say.

“Strangely, whenever you start asking people for the actual economic report, you get missing-study syndrome,” said Victor Matheson, an economics professor at College of the Holy Cross who has studied the financial trickledown of big events.

“When economists not related to the NFL actually look back at the data, including Minneapolis in 1992, the impact of a Super Bowl is much smaller,” between $30 and $120 million, Matheson said. “You shouldn’t turn that down,” he added. “You’ve already decided to build the stadium, but you can’t use the number $500 million to justify the $500 million you just spent on a stadium.”

“This has been going on for decades,” Matheson said. “The NFL magically comes up with a number that corresponds roughly to what a city just spent on stadium subsidies.

“A Super Bowl is certainly a good thing for a city,” he said. “But not nearly as good as they pretend.”

There are also huge costs for things such as security, increased transportation and infrastructure upgrades.

The NFL also demands lots of perks. In New Jersey, for example, the NFL persuaded the state to drop the hotel tax for their executives, Matheson said. And they prohibited local businesses from using the NFL logo to draw customers.

Also not considered is the “substitution effect.” People going to NFL-sponsored events and the game are spending money, but it means they are not spending that money at the cineplex or the Guthrie, Matheson said. Most of the money spent goes to the NFL and out-of-town vendors, who take the money with them when they leave.

Matheson has compared the effect to a planeload of 200 people who land in Minnesota and hand each other a million dollars, then get back on the plane and leave. They’ve spent $200 million in Minnesota, but none of it sticks.

Arthur Rolnick, senior fellow at the Hubert H. Humphrey School of Public Affairs, said the state “has one of the best economies in the country” with businesses generating $280 billion a year.

“The Super Bowl is a drop in the bucket, and it’s a one-time event,” said Rolnick. If a Super Bowl is payback for a new stadium, it’s a poor investment, he said. “I could invest a billion dollars and make more money for them,” said Rolnick.

“Does the Super Bowl have value? Value to whom?” Rolnick asks. “Most of the profits go the NFL.”

Cold-climate cities such as Minnesota can argue they benefit from Super Bowls more than someplace like Miami. Hotels are not full in Minnesota in February, so a bowl game brings in some money, mostly to national chains and to downtown restaurants. Miami’s hotels are full in February regardless of a Super Bowl, so there would be negligible effect.

Numerous studies indicate the “Super Bowl bump” is generally one-tenth to one-fourth of what the NFL predicts, Matheson said.

“Take what the NFL says and move the decimal point to the left,” he said.

As for the public relations bump of having Lesley Visser prattle on about how lovely the Twin Cities is, Matheson said visitors largely “go back and tell friends what a great game it was.”

“About the best thing that could happen is that visitors don’t have a story about the city,” Matheson said. “You don’t want them going home telling everybody how cold it was walking to the stadium.”

He points to last year’s electricity malfunction at the Super Bowl in New Orleans.

“People were talking about how New Orleans was so dysfunctional that they couldn’t even keep the lights on during the game,” Matheson said.

 

jtevlin@startribune.com • 612-673-1702 Follow Jon on Twitter: @jontevlin

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