February 4, 2018

The Super Bowl Swindle

Image from Variety

Publicly funding an NFL stadium in order to host a Super Bowl is a sucker’s bet.

By Pat Garofalo / 02.02.2018

Sunday’s Super Bowl between the (ugh) Philadelphia Eagles and the (ugh ugh) New England Patriots is a bit of a loss for the people of Minneapolis, who came one game away from seeing their Minnesota Vikings become the first team to play for a Super Bowl title in its hometown stadium.

But they’ll also wind up losers in another way: Hosting the Super Bowl is a sucker’s bet that Minneapolis won’t win.

The game will take place in U.S. Bank Stadium, which opened in 2016. And like so many new stadiums in America, it was built with a big helping hand from local taxpayers. Of the roughly $1.1 billion construction cost, about half a billion came courtesy of the public: Some $350 million of it from the state and $150 million from the city.

One of the selling points the league used when trying to talk Minnesota into ponying up for a new stadium was that it would then get a chance to host a Super Bowl, an event usually reserved for warmer places like Miami or New Orleans. “I think a distinguishing factor, after hearing some discussion afterwards, was the stadium project and the effort they had to bring that stadium to completion,” NFL commissioner Roger Goodell said, when asked about why Minneapolis was awarded the big game.

And that’s nothing new for the NFL: It consistently uses the Super Bowl as a carrot to get public funds dedicated to new stadiums (while the stick it wields is the threat of moving a team to a new city entirely if a stadium doesn’t get built).

In turns, cities and the league then play up the economic benefits hosting the big game supposedly brings. For Minneapolis, it’ll be something on the order of $350 million, in theory. $719 million allegedly came into Glendale, Arizona, for hosting in 2015, while Houston scored more than $400 million in 2017 and San Francisco saw some $350 million in 2016.

So the way this works is the NFL tells lawmakers and other public officials that they can host a Super Bowl if they put taxpayer money toward a stadium, and then everyone turns around and tells taxpayers that hosting a Super Bowl will bring an economic boom. Everyone wins! Trophies all around!

Here’s the thing, though: The latter part of the equation is nonsense.

“Economic analyses of the Super Bowl by scholars not financially connected with the game have typically found that the observed effects of the game on real economic variables such as employment, government revenues, taxable sales, GDP, and personal income, while generally positive, are a fraction of those claimed by the league and sports boosters,” wrote sports economist Victor Matheson in a 2010 review.

In plainer terms: The economic benefit numbers everyone throws around are bunk. In fact, per an earlier assessment by Matheson and Robert A. Baade, “the economic impact of the Super Bowl is likely on average one-quarter or less the magnitude of the most recent NFL estimates.”

There are lots of reasons for why this is the case: Boosters tend to count every visitor to a city during Super Bowl time as a net benefit, when it’s not like tourism levels would have been at zero had the Super Bowl not been in town. In fact, some level of both tourism and local spending will be lost because people tend to avoid a location in which there is going to be a lot of hoopla. But that loss often doesn’t make its way into economic impact assessments.

Plus, a lot of the money that gets spent in the “local” economy leaks out to big corporate headquarters elsewhere. And then there’s the ancillary costs to the host city for things like increased security or the myriad tax breaks and fee exemptions the NFL demands.

Add it all together, and you get much less economic oomph than meets the eye.

Look, it’s not like the Super Bowl brings no economic boost at all. It’s just that the benefit is vastly overstated by most of the involved parties, and then used to justify demanding big pots of cash from various cities. According to ESPN, $6.7 billion in taxpayer money has been spent in the last few decades on NFL stadiums alone. Between 1986 and 2012, per a Bloomberg analysis, about $17 billion in public funds have to gone to stadiums for all professional sports combined. So it’s real money we’re talking about here. And you can bet that future Super Bowls will wind up in Las Vegas’ new stadium, which is the beneficiary of the largest stadium subsidy in American history, as well as the under-construction stadium in Los Angeles. On and on the cycle goes.

What the NFL is doing is swindling cities and states out of public money with an outsized promise that it can’t possibly keep, putting taxpayers on the hook for construction that the billionaire owners of NFL teams can easily cover themselves. Lawmakers really need to stop playing along.

Originally published by U.S. News & World Report with permission.