Super Bowl economics

  • 3 min to read
Super Bowl economics

 

It's the game the city's been waiting for more than four years.

But even though the 2-14 Colts aren't playing in this year's Super

Bowl

, Indianapolis can still lose.

The $720-million Lucas Oil Stadium was built after

not-so-subtle hints the team might start loading up the Mayflower moving vans

once again and head to NFL-starved Promised Land of Los Angeles. The stadium

deal, which critics blast as one of the worst in the history of the major

sports leagues, was made slightly more palatable after National Football League

officials dangled a Super Bowl — and the accompanying millions in

economic benefits — in return.

But while some business owners will see a significant profit

in the day's leading up to the Feb. 5 match-up between the Patriots and the

Giants, officials with the city's Capital

Improvement Board

say the agency is likely to lose nearly $1 million on the

event.

Earlier this month, a CIB spokesperson told the Indianapolis Business Journal that

although they anticipate receiving more than $7 million in taxes from visitors

staying in hotels and renting cars over Super Bowl weekend, they will likely

spend $8 million after paying for increased police security, overtime costs and

other expenses.

That doesn't include the $187 million the city has spent on

infrastructure, including $11.5 million used to rebuild Georgia Street into an outdoor

entertainment venue

.

About 68,000 fans will likely attend the game in person. By

contrast, that's about 10,000 more people than attend the average FFA

Convention. While the average Super Bowl fan is likely a bit more well-heeled

than a blue jacket-wearing teenager, the convention brings in an estimated $30-$40

million in direct visitor spending each year with few mammoth infrastructure

investments by the city.

Urban Indy blogger Curt

Ailes

argues it's an apples and oranges situation.

"The Super Bowl is more of an entertainment option for

everyone, while the FFA is more geared toward the students and that industry,"

Ailes said. "The Super Bowl is the biggest sporting event in the world and

brings so many groups together, it deserves a special focus."

The economic impact of a Super Bowl is almost impossible to

accurately determine. Studies by Ball State's Michael Hicks and Holy Cross's Victor

Matheson disagree sharply about how much the event could bring into the local

economy.

Officials estimate visitors will spend $200 million at local

establishments over Super Bowl weekend, but Neil deMausse, author of the book Field of

Schemes

and principal behind the website of the same name, agrees with

Matheson that the actual amount will likely only be a fraction of that. Hicks

didn't return multiple phone calls seeking comment.

"Any economic benefits brought from the Super Bowl are

vastly overstated," deMausse said. "And whatever benefit it will

receive isn't going to replace the hundreds of millions of dollars it took to

build the stadium.

" ... How do you define 'economic benefit?' Will $200

million change hands that weekend? Perhaps. But will it matter more to

Indianapolis than any other city? Probably not. The amount that will stay in

the area to benefit residents will only be a small sliver of that."

Most of the money that's brought in by tourists will leave

Indianapolis virtually as soon as the last down is played. Super Bowl advocates

claim the event will bring jobs to the area, but the latest figures from the

state show only a miniscule drop in the unemployment rate in the Indianapolis

metropolitan area, dropping from 8.3 percent in November to 8.2 percent in

December.

And while downtown bar owners and hoteliers will likely see

a spike in profits, visitor dollars aren't expected to flow into the

surrounding suburbs. Even though the donut counties pay a food and beverage tax

to support Lucas

Oil Stadium,

restaurant and bar owners likely won't see much of a Super

Bowl-related boost in profits from out-of-town guests.

In fact, the Super Bowl and its related activities could

adversely affect many suburban entertainment venues. Critics argue many local

residents would simply shift their spending from other local sites, such as

Carmel's Performing Arts Center or their local movie theater, to festivities

downtown, negating much of the promised financial benefit. Traffic and

crowd-congestion fears could keep other local residents from venturing downtown

— and spending money — at all.

Event proponents claim the event has other benefits, such as

introducing Indianapolis to a host of prominent business leaders and decision

makers who can decide to bring their businesses or lucrative conventions to the

city, but deMausse doubts there will be much of a lasting impact.

"I don't think anyone is going to make a major business

decision based on a short limo ride through the city on their way to the stadium,"

deMausse said. "Corporations decide to relocate primarily because of

infrastructure and educational opportunities. If Indianapolis was serious about

attracting new businesses to the area, they'd have been much better off putting

the money for the stadium and the Super Bowl into improving roads and schools."

Indiana

University-Purdue University Indianapolis

Professor Susan Hyatt taught a

class last year on the effect of major sporting events on metropolitan areas.

She declined to delve too deeply into the economic aspects, but said the Super

Bowl could be a turning point for the city's image, both locally and nationally,

much like another major sporting event was 30 years ago for the city.

"Pride is one of those benefits you can't quantify,"

Hyatt said. "You still have people talking about the Pan-Am Games and how

exciting it was to have so many different people here. It certainly can affect

this generation of residents the same way. It's a good thing to make people

proud of where they live. We need to hope they (city officials and residents)

keep it going, to continue making Indianapolis a great place to visit and live."

Hyatt and Ailes both suggested the Super Bowl could help

provoke debate about other local hot-button topics, such as better public

transit options.

"Not everyone who comes to the city wants to rent a car,

so if we want tourists to return to the city, it's important to have good,

reliable public transportation," Hyatt said. "There are going to be

special transportation options for Super Bowl visitors, but those will go away

(after the game). Better yet, we need better public transportation for the

people who actually live here."

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