Near the deadline, Minnesota has submitted it’s official preliminary bid for consideration to host the 2018 Super Bowl in the new stadium.
Minneapolis is well-suited to host large events and their ability to successfully host the Republican National Convention and dozens of smaller conventions and conferences speaks well to their ability to handle the influx of attention that a city receives as a result of the Super Bowl.
Per the Star Tribune, the bid highlighted the 180 hotels that can offer 19,000 rooms, 48 venue options and practice sites.
The ability to host a Super Bowl (as well as other events of varying impact, including the Final Four) was a significant argument in favor of building a new stadium, and just like stadium construction, has a small controversy in regards to its economic impact.
The University of New Orleans released a study (perhaps under the purview of the New Orleans Super Bowl Committee) that argued that there was a $480 million in net economic impact, broken down into new jobs ($154 million in new part-time and full-time jobs), new state tax revenue ($21 million), local tax revenue ($13.9 million) and new spending ($262.8 million in direct spending and $217.2 million in indirect spending).
The Sports Management Research Institute projected nearly $600 million in new money for New York, and numerous Super Bowl Committees have found studies that agree with the assessment. Many of SMRI’s studies are conducted in concert with the NFL, so there is reason for skepticism.
On the other hand, noted public-funding stadium critics Robert Baade and Victor Matheson have found that the benefits are far overstated. There are a few factors that they point to (the same several factors, actually, that the refer to in their economic analysis of stadiums) to make this claim. The first is that the studies rarely subtract those visitors who would have otherwise come for an event but didn’t in order to avoid the hubbub of the Super Bowl (“crowding out”). The second, which is probably much more significant than the first, is the number of dollars that would have been spent there anyway simply being attributed to the Super Bowl (“substitution”).
That is, people may move their vacation forward or back to meet up in line with the Super Bowl—money that the city was going to get regardless. With that, many studies also do not take into account another substitution effect, which is the amount of local money that is attributed to the event, when it would have been spent anyway. Over the years, I’ve noticed that studies have done a much better job taking this other substitution effect into account (this is a little less important in the “Super Bowl impact” debate than the “stadium economic impact” debate, as the Super Bowl money almost always comes from out-of-state fans of other teams).
Another argument Baade and Matheson marshal in their favor is the concept of “leakage,” where local monies provide profits for off-site executives (CEOs and to some extend stockholders) but not necessarily local workers paid a wage (clerks, housekeeping, etc.).
Honestly, I do think that Baade and Matheson (and many others, including Phil Porter, Brad Humphreys, Dennis Coates, etc.) overstate the effects of these ameliorating influences—crowding out doesn’t happen as often for big events as people seem to predict, and not many people sacrifice a summer vacation for a winter one. Leakages are usually resolved not by wage increases but by new temporary hiring.
That said, a lot of double-counting occurs when assessing the positive economic impact—new jobs and indirect spending tend to coattail while “direct” spending tends to include secondary and tertiary spending without being honest about it (though important to count).
The biggest argument in favor of the mythbusters is the question of opportunity cost, where the cost required to host the event usually can be better spent elsewhere. Nevertheless, opportunity cost tends to be applied against an ideal scenario (new schools, for example) instead of what is politically feasible.
As Sports on Earth points out, these effects change city-by-city, and the infrastructure, tourism culture and general capacity of each of these cities matters quite a bit. A while back (very, very early in my blogging career) I argued in favor of a stadium and in so doing argued that Minneapolis is the kind of city (along with New Orleans and Seattle) that would benefit from a stadium. Many of those reasons are the same reasons they would be a good city to host a Super Bowl.
There are other things that tie into these economic arguments, like the non-priced impact of short-term increases in things that increase quality of life (civic pride, an exciting winter, what have you) and the long-term impact of increasing the visibility of a city (Indianapolis received so much positive press that it could have lost net money and still be worth it) that are difficult to measure but important as well.
From a personal standpoint, I’ll be excited to see a Super Bowl in Minneapolis, especially if the Vikings are the NFC Champions (which could massively impact the economics of the event, but I don’t care). Hopefully, the Vikings bid has is successful despite extremely strong competition from Indianapolis (again, rave reviews) and New Orleans (who will be celebrating their 300th anniversary as a city at the time).