SBJ/January 15 - 21, 2001/Opinion
Super Bowl impact figures a super stretch
Published January 15, 2001
The Tampa Bay Super Bowl XXXV Task Force tells us residents that the upcoming Super Bowl will have an economic impact of $250 million on the Tampa Bay area and that the Super Bowl will bring more than 100,000 additional visitors to the area.
But the numbers don't add up.
One must wonder where the impact number came from. The task force didn't commission a study, and none of the members are economists.
History didn't reveal it to them; I've studied Super Bowl impacts and there is nothing in the record of economic activity that suggests this. I'd bet the mortgage that the task force members couldn't tell us what those numbers mean or how they were estimated.
It's a good bet because $250 million is so far beyond possibility and the truth is so easily observed that if the task force had any clue, it would never make such a claim.
The facts are the National Football League gave the task force that figure. It represents a gross exaggeration, and the task force should know better than to trust the NFL's objectivity. The NFL uses these figures to justify government subsidies to teams.
It's important that we all understand what economic impact means.
Economic impact is merely sales impact. That's important when economic impact is used to justify government expenditures. The several million dollars we pay to support the Super Bowl are tax dollars, and every dollar of sales impact generates only about a nickel of tax receipts for local governments. We need $100 million to pay the cost of hosting the Super Bowl.
The task force should do its own work and question whether $250 million worth of sales is reasonable.
Consider that Hillsborough County now sells about $1 billion worth of goods and services in a typical January, roughly $65 million every two days. For us to absorb even 25 percent of the NFL's claim in two days, we would have to sell twice as much of everything — not just twice as many hotel rooms and restaurant meals, but twice as many cars, boats, refrigerators, television sets, clothing items, stereos, furniture, lawn mowers and weed whackers. Every line in every store would have to be twice as long as usual on Super Bowl weekend.
Consider that Tampa Bay area hotels typically are 80 percent full in late January and that 85 percent is considered fully occupied, so there is not much available space.
With double occupancy, we would have to build 100 large hotels to handle the additional people. Consider that roughly 40,000 people pass through Tampa Bay area airports each day. We'd have to more than double the number of flights at every airport to handle the new influx. It takes nearly 700 jet flights to ferry 100,000 people. If you could somehow manage to land and service an additional plane every six minutes, it would take more than three days to deliver them using the task force's economic impact number as a base.
Tampa already hosted two Super Bowls and Hillsborough County collects data on sales. The task force should make its own comparisons.
In January 1991 when Tampa hosted the Super Bowl, Hillsborough County recorded sales of $720 million. It had sales of $727 million the previous January (1990) and $742 million the next January.
In January 1984, when Tampa hosted the Super Bowl, Hillsborough County recorded sales of $472 million. The average for the preceding and following Januarys was $482 million.
And this economic impact evidence is consistent with every Super Bowl.
In Miami, Atlanta, New Orleans, Phoenix, Minneapolis and Detroit, and in every Super Bowl in California, sales do not respond to the presence of a Super Bowl.
The NFL's estimates are wrong and the league knows it.
A few years ago, before I started publishing my findings, the NFL used to make even more outrageous claims.
The league told Miami and Atlanta that the Super Bowl impact there would be nearly $400 million.
In trial testimony concerning the "stadium tax," we were told the impact from this year's Super Bowl would be at least $300 million.
These phenomenal predictions result from using a long-run model to predict the impact of a short-duration event. The model treats 100,000 new visitors as though 275 came every day. With that logic, it is reasonable to assume someone would build a modest new hotel, open several restaurants, add a few additional airplane flights, expand the airport and buy all the material and hire all the people needed to build and operate these new ventures.
But no one builds airports, hotels and restaurants for two days' worth of business.
The Super Bowl does draw about 100,000 people to the area. Area hotels, seizing the opportunity, increase room rates and usually insist that visitors pay for at least three nights.
The usual crowds of visitors who fly into town and fill our hotels in January must go elsewhere. The hotel owners make a tidy profit, but profits to national hotel chains do not create local sales impact. The net impact on the local economy, as historical sales figures show, is zero.
If our task force thought about the source of its figures, if its members took a moment to understand, they would realize they are being deceived. And the NFL should be penalized for illegal procedure.
Philip Porter is a professor of economics at the University of South Florida College of Business Administration.