The Morning Report
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This post has been updated.
New NFL stadiums are supposed to draw lots of Super Bowls, and, thus, super infusions of cash to the host city.
Ostensibly, countless sports fans and boosters argue, a new San Diego Chargers stadium would do the same.
But some of those arguments are oversimplified and misleading.
Let’s tackle three big Super Bowl myths.
Super Bowls mean super profits for cities.
The latest studies proclaim that Super Bowls boost regional economies by $200 million to $500 million.
Many economists have questioned those figures. Earlier this year, College of the Holy Cross economist Victor Matheson told CBS News the Super Bowl in Glendale, Ariz., might’ve brought in as little as $30 million.
That’s because studies often fail to incorporate visitors and spending displaced by the Super Bowl – a factor especially relevant in warm, tourism-friendly cities like San Diego. So yes, the Super Bowl draws lots of fans to a city, but it also chases some tourists away.
That’s not to say there isn’t an economic impact. It’s probably just not as massive as the NFL wants you to think.
And in the end, most of the money that is made goes to private businesses such as hotels and restaurants – not the government agencies and cities helping foot the Super Bowl bills.
Exhibit A: An economic impact study released months after the 2012 Super Bowl in Indianapolis estimated a total of $18 million in additional local tax receipts and a $278 million shot to the regional gross domestic product.
That report doesn’t mention that the city of Indianapolis sunk $12 million into a Super Bowl village or that the county stadium board spent another $12 million on public safety reimbursements and various other costs.
Also left out is whether NFL exemptions lessened the money coming in. The league often pushes for rebates from Super Bowl host cities.
That happened this year.
The Arizona Sports and Tourism Authority, which owns the Arizona Cardinals’ stadium, agreed to refund an estimated $4.2 million in taxes associated with this year’s Super Bowl to the NFL. The group forgave $2.4 million in sales taxes for the 2008 game.
Super Bowls pay for themselves.
A Super Bowl is a costly proposition. Host committees raise tens of millions of private dollars to attract the big game in the first place. Then cities work with the league to coordinate high-level public safety coverage, infrastructure and other needs.
New York and New Jersey agencies spent at least $36.9 million in public money that the NFL and the host committee didn’t pay back following the 2014 Super Bowl, according to NJ Advance Media.
Those costs can outstrip the tax revenue coming in, especially given the NFL’s increasing demands for host cities.
Glendale, Ariz., Mayor Jerry Weiers projected his city would see a $2 million loss due to charges for police and firefighters working in and around University of Phoenix Stadium for this year’s Super Bowl.
The Indianapolis stadium board had to cover a $1.1 million gap between revenues and expenses for the 2012 Super Bowl.
San Diego’s 2003 Super Bowl wasn’t a clear winner on this front.
In a May 2003 memo, the city detailed $5.1 million in expenses and reported it’d received $2.8 million in new hotel taxes associated with the game.
Sales taxes, which weren’t reported at the time of the memo, had been estimated to come in at about $1 million. A city spokesman couldn’t immediately say whether the that projection was met — if it was, that would mean the city saw a $1.3 million loss.
If San Diego gets another Super Bowl, it may not face the same conundrum Glendale did. The suburb west of Phoenix didn’t have enough hotels to house all the out-of-town visitors or the infrastructure necessary to host the NFL Experience so Phoenix and other nearby cities stepped up. This meant Glendale didn’t reap all the new tax money it might’ve otherwise gotten from the Super Bowl.
Taxpayers in Santa Clara, home of the San Francisco 49ers, could take a hit too.
The San Jose Mercury News has reported most of the host committee money will flow to San Francisco, where most NFL events leading up to the Super Bowl will be held. The group has promised to cover public safety costs for the Super Bowl in Santa Clara but the city may have to dip into its infrastructure fund to pay for other events planned there if fundraising plans don’t pan out.
Some folks argue that the international exposure that comes with hosting a Super Bowl – plus the increased spending in the city and the positive effects for businesses – justify government spending and losses.
But that doesn’t mean the actual bills necessarily get covered.
Build it and lots of Super Bowls will come.
Super Bowls have long been a motivator for cities mulling new stadiums.
In the past, the NFL held the Super Bowl in the same handful of cities. Not anymore, as even Chargers stadium point man Mark Fabiani acknowledged earlier this year: “Washington D.C. wants a Super Bowl, Chicago wants one. San Francisco is getting one. Atlanta will get one with its new stadium. Same for Minnesota,” he said. And his kicker: “The idea of a rotation is a myth,” he said.
Indeed, the NFL’s more recently been rewarding cities that build stadiums with Super Bowls. Newer stadiums in Indianapolis, Arlington, Texas, and Glendale have hosted recent Super Bowls. The new 49ers stadium in Santa Clara and a yet-to-be-completed venue in Minneapolis will get the big game in the next few years.
NFL Commissioner Roger Goodell has said the demand for the big game means few cities will get multiple Super Bowls.
“I believe we need to get to as many communities as possible and give them the opportunity to share in not only the emotional benefits but also the economic benefits,” Goodell said before last year’s Super Bowl. “It helps the NFL, it helps our fans and it helps grow our game.”
Bottom line: A new stadium could put San Diego in a good position to get a Super Bowl, but not many Super Bowls.