Super Bowl showdown: economic boost or no?

Today’s New York Times article that declares that Minneapolis St. Paul won’t see the big economic windfall from the Super Bowl that its hosts thought it would probably isn’t that big of a surprise to the hosts. That’s pretty much why details of deals between the NFL and host cities are kept fairly secret.

This, of course, isn’t the first time nor the first news site to report that the notion of economic riches for hosting a Super Bowl is a gigantic con. And the reality of the economics probably won’t rise above the NFL’s slick marketing which marks the annual battle between economic reality and that slice of pie in the sky over the Twin Cities.

“They always talk really good about that stuff, and then they go off the rails,” said Victor A. Matheson, a sports economist at the College of the Holy Cross in Worcester, Mass., says of the Minneapolis St. Paul host committee’s claim that between $350 and $400 million will pour into the region.

“Not nothing, and not what you would sneeze at,” Matheson said, “but somewhere between a quarter and a tenth of what is being claimed.”

How much of that money comes from locals looking for a place to park, we wonder?

When they’re pitching Super Bowls, host committees don’t tell you about the big jump in parking in a city where people actually have to go to work.

“I hate sports economics, but I love my city,” former Mayor R.T. Rybak tells the Times about the deal to build U.S. Bank Stadium, “and we ended up crafting a deal that ended up being a financial bonanza for Minneapolis.”

So much so that those involved would rather keep the books closed.

The bid book shows the host city must provide the N.F.L. with 35,000 parking spaces, thousands of hotel rooms, hundreds of buses and limousines, billboards, security, food and an exemption on paying all sales taxes, among hundreds of other specifications.

The phrase “at no cost to the N.F.L.” appears in the book 65 times.

All of these costs, at least in theory, are borne by the host committee. Minneapolis raised $30 million in pledges from the private sector before even bidding on the Super Bowl. According to Langley, of the regional economic development agency, the committee has now raised more than $50 million to put on the game. Enough is budgeted to pay for police overtime, emergency snow removal or any other cost overruns, he said.

“This is a really professional group,” Langley said.

If so, it is the rare Super Bowl host committee that has budgeted for extras. The city of Santa Clara, Calif., had its costs to host the 2016 Super Bowl reimbursed, but the game cost nearby San Francisco almost $5 million, mostly in police and transit services. Mayor Jerry Weiers of Glendale, Ariz., told ESPN that the city lost money hosting the game in both 2015 and 2008. New Jersey gave the N.F.L. an $8 million tax break, and state-owned New Jersey Transit lost $5.6 million when the game was played there in 2014.

Last week, the Star Tribune reported that the local cost of providing security has risen to $3.7 million.

The Super Bowl Host Committee will reimburse Minneapolis, the paper said. A city spokesman wouldn’t say where the money is being used, citing security concerns.

  • Robert Moffitt

    It’s not putting any more dollars in my pocket. Or taking any out, for that matter.

    • Kassie

      The ways this is affecting me are not the ways I thought it would be. For instance, I’m not allowed to do any installations this weekend at work, which is pushing one of my projects out a week.

      • Postal Customer

        I’m taking Friday off to avoid the downtown madness. That’s a vacation day I wouldn’t have otherwise used; that’s economic loss.

        Working from home next Monday.

        • Jack

          Not making the usual spend money walks during my lunch hour. Coming in, working, and getting out.

  • Gary F

    Must be a boom for the NFL. Read Laura MaCallum’s Newscut post. The NFL has volunteers scrubbing toilets.

  • Gary F

    I’m thinking about going down to Nicollet mall on Saturday to see Bob Mould/Soul Asylsum/The Jayhawks. Does anyone know if the the Proles and other common folk can use the Green Line? or is that only off limits on game day?

    • Veronica

      You can google it, but I think you’re fine.

    • Barton

      You can use it on Saturday. Not on Sunday though – not without a ticket to the game itself AND a $30 transit ticket (!!!) between Stadium Village and the US Bancorp Stadium stop. But you can use the replacement buses between these stops and not pay the rediculous fee.

    • Rob

      You’re picking the best day to go down. Musical acts on the other days sound like total mainstream yawners.

      • Gary F

        Pretty tight schedule. Multiple stages? I haven’t seen Mould play since the Karl Mueller fundraiser and Soul Asylum since Stinson and Murphy left. It should be fun.

        • John K

          I was checking out the zoo yesterday. It looks like 1 stage, with not a whole lot of audience space.
          It looks like you can buy your way into some kind of Verizon VIP area nearby, but I didn’t really investigate what that was since I won’t be able to make it Saturday (the only music day worth seeing in my opinion)

  • Veronica

    Husband works downtown—he’s spent months getting the company ready for all the workers to work from home.

    Governor Dayton and RT should be held accountable for THOSE costs to companies—it’s been unnecessarily disruptive in ways I’m sure they never fathomed.

    • Barton

      The interesting thing is that my company (which has been dealing with similar) has had business continuity plans for YEARS that say that is exactly what will happen: people will work from home. But they never thought of the volume of network access/VPN needed, or the physical assets needed, to have everyone work from home. It’s like a huge disaster recovery test for these companies.

      We’ve done two dry runs of having all disaster recovery personnel work from home in the last two months – just to make sure the systems and network were ready. They were not. I am hoping to still come to work everyday until Friday, then we’ll see how the mass work from home really goes.

      • Jack

        Wish my company would have invoked BCP. This is the best test.

  • Barton

    I work at 8th and Nicollet in Mpls. I love football. I hate this event. The Verizon stage (the main concert stage for the SB Live events) is right out my window. My entire floor shook last Friday during the sound check. Right now they are making repairs to the stage: the beeping from the work vehicles reversing is giving me a headache and agita so bad! But our office wants us to still be “business as usual,” so no working from home until Friday (when I expect we’ll crash the VPN process).

    On Friday, police cars and armored military-type vehicles parked in the bus stop space: I watched a group of people try to lift someone in a wheelchair over the drift and to the traffic lane (where her bus had to stop) to onto the bus. It is just a complete kerfuffle. And I do not really believe that the committee raised enough money to cover the City expenses: i really believe that as a resident of Mpls I’ll be getting taxed for this event for years to come.

    And don’t forget: it isn’t over on 2/4 – the city is still messed up transit/traffic-wise until 2/9.

    • Al

      I used to work on the ground floor of 7th and Marquette. The foot traffic was bad enough on normal days. THANK GOD I’m across the river now.

  • Rob

    As a rule, politicians lie, and when one of them says building a sports stadium was a “financial bonanza” for his city but won’t show the figures to the public, you know he is telling a yuuuuge falsehood.

    • I thought the part where he said the football stadium allowed Target Center’s renovation. As I recall, the stadium bill only allowed the money that was going to the Convention Center to be REDIRECTED to Target Center. That could easily have been a standalone bill at the Legislature.

  • Mike

    Honest question: who makes so much money off this event that the NFL is able to extort cities and states to this degree? I realize all the secrecy may make that a very difficult question to answer, but it’s obviously key to those of us who want to unravel the economics of this obscenity.

    If the economic impact isn’t nearly what it’s cracked up to be (several economists over the years have opined to this effect), then why does it continue? I can only come up with two answers, both of which are troubling:

    1) Certain influential business interests (who?) make a killing off of it, and they’re just engaging in the age-old game of “privatization of profit, socialization of loss,” or
    2) Culturally, we’re so enthralled by pro sports (football especially) that we don’t care about the economics. Worship of elite athletes is worth any price.

    • wjc

      I think both of those answers play a role. I would LOVE to see an accounting of NEW money coming into the community and staying here. Room rentals at chain hotels don’t count: that money goes to the corporations. Airline flights don’t count for the same reason. Car rentals, same. What money actually stays with people in this region?: local restaurant revenues (not chains, except for tip money), local property rentals, local event revenues (as long as the money doesn’t leave as quickly as it came) what else?

      • Mike

        Good point that this may be a national con game that only pretends to be local, and which only depends on a new local victim every year for profitability. I had always assumed that local interests drove it, but that may be just an illusion. Given that the politicians are bought mostly by large corporations, this would make sense.

        • Rob

          Yup. Plutocracy R Us

      • QuietBlue

        Even if a chain is national, there are still state and local taxes on these purchases that are collected. Whether they offset all the money spent by local governments is another question.

        • wjc

          You are correct, but how much? Not hundreds of millions of dollars.

          • QuietBlue

            Hence my second sentence.

          • wjc

            Gotcha. I just really, really want to see the numbers.

        • Jim in RF

          You saw the note in the contract about the exemption on taxes?

          • wjc

            The NFL gets tax exemptions, but individual attendees will be paying state and local taxes on general purchases and restaurant bills. How much will those collections increase over these few weeks?

      • Jim in RF

        Exactly. The hotel maids won’t be paid anything more than they are now. Wait staff might marginally get more because tips will be figured on inflated prices, but it’s not that much (and remember that the worse tippers are the rich and the best are other servers). Cops will probably respend their overtime locally.

        • wjc

          Maybe the maintenance staff will see somewhat higher tips, but again it would be interesting to see what the reality is compared to the inflated projections.

    • Ben Chorn

      I think the major draw of the Super Bowl or Olympics isn’t so much the initial economic boom (or lack of), but it can use it for tourism in the future. It will help expose people to a city they may not have come to otherwise and thus may come back. It also is a feather in the cap of marketing people who can list it under the city’s accomplishments.

      • RBHolb

        Good on the marketing people for coming up with something new for their LinkedIn profiles. I doubt the exposure–such as it is–will help future tourism.

        Everything surrounding the Super Bowl is generic. There is nothing here that would not be happening in largely the same way in Cincinnati or St. Louis. The weather will be colder, which will add something else to the banal chatter of those covering the game (“It sure is cold here in February!”), but that’s about it. The focus is on the game, and the NFL-sanctioned activities preceding it. There will be nothing here that is unique to Minnesota.

        • Ben Chorn

          Well good thing you don’t work for Minnesota tourism.

          • Postal Customer

            You’ve gone on vacation in Indianapolis and Phoenix because the Super Bowl was held there right . . . ?

            MN is not a national tourist hotspot. Never has been, never will be. Super Bowl won’t change that.

          • Jeff

            No, but I’m guessing we might get a ornithology convention or something out of it.

          • Rob

            Yes. More than likely, given the Spring 2018 opening of the UofM Bell Museum near the school’s St. Paul campus.

          • Jack

            On a side note, I didn’t realize that the museum’s namesake was the founder of General Mills.

          • Rob

            Nor I. Why not Bell Mills?

          • Wasn’t General Mills originally the Washburn Company?

          • Rob

            Yup, sort of. Cadwallader Washburn originally called his plant the Minneapolis Milling Company. It later became Washburn, and Bell, who was a Washburn exec, joined the company up with some other local milling outfits to form General Mills.

          • RBHolb

            Interestingly, we were a major tourist destination in the early 90s, but it had nothing to do with any football game. The Mall of America was a big draw before the novelty wore off. I believe it was the second most popular tourist destination in the country for a time.

            Having a casino nearby was another draw.

          • Jeff C.

            I thought that MOA visits by people who live in the Twin Cities metro were counted as well as visits by “tourists”. Maybe I’m wrong, but that was how it because the #2 destination. Not many locals, for example, visit the Statue of Liberty, or if they do, they visit when out-of-town visitors are visiting them, as opposed to the MOA, which locals go to more frequently.

          • Last year, I was offering airplane rides and tours of the Twin Cities to out-of-town family in town for a wedding.

            Most of themc hose to go to the Mall of America instead.

            That’s when I knew is was all hopeless; we’re always going to be just the state with a big shopping mall.

          • RBHolb

            You may be right. I don’t remember how the numbers were tallied.

            I just remember thinking it was a sad commentary on our culture.

          • RBHolb

            How did that exposure thing work out after the 1992 Super Bowl?

      • Postal Customer

        All this is conjecture. It won’t make any long-term difference to the city.

        “It will help expose people”

        Nebulous and unquantifiable.

        “It also is a feather in the cap of marketing people who can list it under the city’s accomplishments.”

        Hosting the Super Bowl is not an accomplishment. What happened is that we gave a billionaire everything he wanted, and the Super Bowl is just one consequence of that. We accomplished nothing positive.

        • Jeff

          For less than the cost of a major highway interchange, I have something to do on Sunday afternoons. Also, I note that this blog was celebrating the Diggs catch a few weeks ago and how it brought people together. I doubt we would have cared if it was the LA Vikings.
          I would guess the Superbowl is a net gain nothing like they’re touting, but meh. Bring on the dancing snowflakes!

          • /// Also, I note that this blog was celebrating the Diggs catch a few weeks ago and how it brought people together.

            Two different posts. The Diggs catch on the blog was addressed with fan reaction videos. That was two weeks ago.

            Last week I wrote about how the Vikings Super Bowl mania had been the rare commonality among us. FTR, though, I noted the irony of a sport as bad and corrupt as football being the thing that united us.

          • Jeff

            Ok, I stand corrected. Football is corrupt?

    • Rob

      Sounds like you’ve nailed this whole plutocracy and Bread and Circuses thing

  • chlost

    Just had a conversation with a guy this morning who claims that “the terrorist network is planning a hit at the SB”, and that Homeland Security, the military and generally all law enforcement available is here to prevent it, including snipers on the roofs of downtown buildings, and a big presence at MOA. He could just be a conspiracy nut. But it raises the question for me-how much security is there, and who IS paying for it? If it is Homeland Security, does the NFL, the Host City, or the federal government cover that? I read in another comment about the military vehicles downtown-what do they cost and who pays for them? Seems as though we should be able to know this, as it involves government assets.

    • Barton

      There are definitely “snipers” on the roofs of buildings downtown. They’ve sent up a nice little tent to keep them warm on top of the Galleria (we can see that from my office window). Can’t have them shaking from the cold with their fingers on the trigger….

    • Rob

      Did you let Homeland Security know you have a friend with inside info about terrorist networks?

      • chlost

        That guy is so definitely not a “friend”, believe me. but those costs are something we haven’t heard much about.

    • RBHolb

      This is another step in the militarization of American life. We are getting used to seeing uniformed soldiers on guard, and are feeling safer because of it.

  • Jim in RF

    There’s a lot of layers to this, and mostly I think about the macro things like Mike raises. A detail I wonder about is what happens after the SB leaves – does parking go back to pre-SB levels, or do vendors use this disruption as an opportunity to raise prices. I heard J Bonnes on the radio talking about $80 platters of chicken wings that used to be $20 and $14 Coors.

    • Rob

      A Coors aficionado and his/her money are soon parted. : )

      • Friends don’t let friends drink Coors.

      • Jim in RF

        Coors is a nasty practical joke.

        • Rob

          As Mr. Spock would say: Indeed.

    • Jim in RF

      I see from the Strib that I have to walk this back. Ike’s said the $36 for guac & chips that was $12 last week was a ‘mistake.’ Apparently the menu being printed, along with the $56 for a half chicken, slipped past management review somehow.

  • Gary F

    How much of that $65 parking fee does the ramp owner get this week compared to a regular season Vikings game? My hunch says probably not much.

    • Looks like parking rates all across the city are going up even without the SB. I think LASL raised the price of the garage near the Government Center to something like $15, it was reported last week.

  • This discussion put me in mind of an article I read in The Atlantic a few years ago about the cost of high school sports, especially football. The link is at the end of this post.

    What bugs me about spending on football in general is the same one being asked about local economics of the Superbowl, which is, “What are we getting for our money?”

    Taxpayer costs are easier to nail down when we are talking about high school football, and this is an example from the Atlantic essay: “Football at Premont (Texas) cost about $1,300 a player. Math, by contrast, cost just $618 a student. For the price of one football season, the district could have hired a full-time elementary-school music teacher for an entire year.”

    Thus the concept of business economics called “opportunity cost” comes into play. What else could we have gotten for the money had we not spent it on Gopher football/high school football/new stadium/Superbowl…? For example, what if the usual hokum arguments about football building physical strength, good health, and character were taken seriously and we demanded health and wellness for all students instead of a select few football players? Money would be spent on health and activity training based on metrics that led to good outcomes for all students – more of a health club model. Academics would become the activities celebrated in the school trophy case. The professional football industry would be responsible for training its own recruits instead of leeching off our schools and universities. And they could damned well buy their own venues and pay their own costs.

    https://www.theatlantic.com/magazine/archive/2013/10/the-case-against-high-school-sports/309447/

    • Barton

      That is really fascinating. Thank you for sharing!

  • Gary F

    I saw Ted Mondale up in the loft suites during the Saints playoff game. I didn’t ask him or follow him to see which suite he was in.

    I wonder where Ted Mondale will be sitting for the Super Bowl?

  • Pej

    Flashback to the 2014 demands, along with a link to the 154 page document.
    http://www.startribune.com/nfl-had-a-long-pricey-and-secret-super-bowl-wish-list-for-minneapolis/262253921/?c=y&page=1

    Some day I want to form a ‘non-profit’ with as much power as the NFL…

  • AL287

    I think it’s idiotic that grown men are paid millions of dollars to knock each other around a 100 yard patch of turf so the taxpayers can pay for their nursing care due to
    CTE when they actually do turn into idiots.

    Big dumb jock takes on an entirely new meaning when you consider the health ramifications of playing tackle football.

    I wonder how many Americans are putting themselves into debt due to their NFL obsession buying tickets that could pay an average family’s mortgage for three months.

    There’s a crack in the universe and the U.S. is on the edge of the precipice.