SBJ/January 26 - February 1, 2004/Special Report
NFL gets free rent and free rein at Super Bowl stadiums
Published January 26, 2004
There's a giveaway at Reliant Stadium on Super Bowl Sunday — it's the stadium itself.
SMG will not charge the NFL to use the facility, an arrangement the league and Super Bowl markets have had since 1982, when the host committee in Detroit offered a rent-free Silverdome in its bid to attract the game, said Jim Steeg, the league's senior vice president of special events.
In the 38-year history of the Super Bowl, those bids have evolved (or dissolved) to the point that stadium operators surrender to the NFL the net revenue generated from game-day ticket sales, concessions, parking and about half the venue's premium seating.
Steeg, celebrating his 25th year of producing the Super Bowl, said the competition continues to escalate for the game and its immeasurable impact on the local economy.
"The good news is that as much as these [cities] complain, do you know how much more we could ask for? One year, one city offered us $2 million in addition to the free facilities. We said no, we didn't think it was right," he said.
Shea Guinn, SMG's president and general manager of Reliant Park, said it was "difficult to impossible" to estimate what it would cost under normal circumstances for the NFL to rent Reliant Stadium, plus Reliant Astrodome, Reliant Convention Center and Reliant Arena for other Super Bowl festivities.
"It varies depending on the impact of the event, but nothing else comes close to the Super Bowl. It's off the radar because it is unique and extraordinary," he said.
Guinn and stadium managers in San Diego, New Orleans and Tampa said the benefits of having the Super Bowl far outweigh the loss in facility revenue. They stressed that the NFL is fair and equitable in paying for operating expenses on game day and the two- to four-week preparation period.
Doug Thornton, general manager for SMG at the Louisiana Superdome, said the NFL spent $400,000 to help cover the dome's additional costs for increased security at the 2002 Super Bowl, the first one after the Sept. 11, 2001, terrorist attacks. "The league was very mindful and respectful of that," he said.
The host committee in New Orleans raised private funds to offset facility expenses not accounted for by the NFL. The Superdome also received a special exemption from the state to waive the rent and "allow the NFL to get 100 percent of net revenues that would normally be given to SMG," Thornton said.
In Houston, the state comptroller's office will give local organizers $8.7 million in state tax money to help with Super Bowl expenses, an amount officials guessed would be generated within a two-week period.
Half of that total will pay for $5 million in improvements to Reliant Stadium required by the NFL, including 2,200 temporary seats, five elevators, two escalators and an 18,000-square-foot media room.
Steeg said the increase in rental car tax revenue in Tampa generated by the boost in tourism for the Super Bowl helped pay facility expenses.
"We didn't lose anything in 2001 because all our costs were covered by the NFL or the local organizing committee," said Mickey Farrell, director of operations at Raymond James Stadium.
The NFL paid for half of the $500,000 high-definition security camera system used for last year's Super Bowl at Qualcomm Stadium, said GM Bill Wilson. The San Diego International Sports Council and other agencies reimbursed the city for building expenses.
"I don't mind breaking even because of what the city gets in return," he said.
Thornton pointed out, "It's no different than any other major convention, where they want free hotel rooms and a break on rent and expenses. But what the NFL asks for is not out of line, based on other events. Some of the others want to extract a pound of flesh."