With Super Bowl LVI just around the corner, fans across the nation are already gearing up for the festivities that take place during the pinnacle of American sporting events.
This year, the spectacle will take place in Los Angeles, California, at the newly minted $5.5 billion SoFi Stadium. This stadium was undoubtedly built with a future Super Bowl in its plans.
Hosting the annual event has become almost as competitive as the game itself, with hopeful cities bending over backward to fulfill a laundry list of NFL demands (including new stadiums) for the chance to add the bucket list event to their city.
The NFL does its best to coax potential suitor-cities to apply for the honor, with promises of a cash cow that will flood the area with money for years to come. But some economists urge caution when predicting the actual dollar amount of the potential windfall, suggesting it’s not even close to some of the reported figures.
So, who benefits the most from the Super Bowl? Is it the host city, the NFL, or both? Let’s look at some of the numbers.
The NFL promises a financial windfall
At an event hosted by the Las Vegas Chamber of Commerce in 2020, when asked about a potential Vegas Super Bowl, NFL commissioner Roger Goodell told the audience that the event can expect to bring an “economic impact of approximately $500 million plus.” He added that he believes Vegas has the potential to “blow that out of the water.”
The city was buying what Goodell was selling because Las Vegas is now hosting the 2024 Super Bowl in its new $2 billion stadium.
But for Victor Matheson, a sports economist at the College of the Holy Cross in Worcester, Massachusetts, the numbers don’t quite add up. Matheson has studied the economic impact on host cities for years. He doesn’t dispute that visitors will spend lots of cash in the city leading up to the big day. However, Matheson argues that the net financial gain is substantially less than some of the numbers that are reported.
“A typical city generally sees an increase in city GDP of roughly $30M to $130M from the game,” Matheson told Business Insider.
While that number is nothing to sneeze at, it’s a far cry from the $500 million that often gets thrown around. Matheson said that the astronomical costs spent by the city to host the game take a sizeable chunk out of any potential profits.
Costs leading up to the Super Bowl
The list of NFL specifications for potential bidders is said to be long. In 2013, the Minneapolis Star Tribune uncovered a 153-page bid guide from the NFL to the city that was essentially a list of demands that had to be met to have a chance at hosting the event. Some notables on the list were:
- 35,000 free parking spaces for the NFL
- Police escorts for team owners
- Free presidential suites at high-end hotels
- Free billboards across the Twin Cities
- All of the revenue from the game’s ticket sales
- Pay all travel expenses for 180 league officials to observe the potential site
While it’s unclear how many of the requests by the NFL were fulfilled, it must have hit the magic number because Minneapolis ended up winning the bid in the end. While these demands might seem outrageous, University of North Carolina sports economist Craig Depken doesn’t blame the NFL because he said the cities are constantly trying to outbid each other.
“The NFL didn’t just come up with 153 pages of demands; someone has probably offered these things over the year,” said Depken.
When you start adding up all the costs that take place long before the game kicks off, you can quickly see how the promises of a $500-million-plus payday could seem inflated.
The NFL and TV networks win big
The NFL has several revenue streams pouring out of the Super Bowl no matter what city hosts the game. Companies shell out millions for advertising space, fans spend an arm and a leg for tickets, and merchandise sales skyrocket.
Here’s a snapshot of what the NFL and television networks can expect to bring in during a typical Super Bowl.
- Television rights to the game paid by NBC, FOX, CBS every year: $3 billion
- Total ticket sales revenue: $65 million minimum
- Each 30-second advertising spot paid to TV networks: $5.6 million
- Expected total ad revenue paid to TV networks: $336 million
- Average money spent (food, drinks, merchandise) by a single fan: $88
- Spending nationwide by fans on Super Bowl: $13.9 billion
The NFL and television networks aren’t the only people making money off of the Super Bowl:
- Americans drink 325 million gallons of beer on Super Bowl Sunday
- Dominos Pizza delivers two million pizzas on Super Bowl Sunday
- For Super Bowl 50, 7.7% of Americans said they planned on buying a new television.
- Music sales increase for halftime performers. After her halftime show, Missy Elliot’s music sales increased 996%.
The amount the Super Bowl host city sees is debatable
There’s no doubt that in the weeks leading up to the Super Bowl, host cities see a massive increase in things like hotel occupancy, shopping dollars spent and an uptick in action at the bars and restaurants.
For instance, last year’s hotel revenue in Tampa saw a jump of 166% year over year. Rob Higgins, president and CEO of the Tampa Bay Super Bowl LV host committee, stated that the demand for hotel rooms on previous weekends was 41,000 rooms per night but jumped to 67,000 during Super Bowl weekend. He also noted that the average rate spiked from $102 per night to $300.
According to a report released by Gov. Mark Dayton’s office and local host committee for the 2018 Super Bowl in Minneapolis, Here are some quick figures:
- Tourists to the city: 125,000
- Days spent in the city by a visitor (average): 3.9
- Money spent per day (average): $608
- Hotel nights (average): 266,000
- Room rate (average): $249 per night
- Visitors that stay in peer-to-peer rentals: 13%
But sports economists like Victor Matheson argue that the trickle-down effect isn’t quite what you expect. Matheson said that most of the extra hotel revenue actually goes out of town to corporate headquarters. The actual amount the city will see is negligible.
As for the rise in hotel bookings, if hotels featured 80% occupancy anyways, the NFL only accounts for a 20% boost. And while the hospitality industry might see a temporary gain in hours worked, they don’t see increased salaries, according to Matheson.
Some Super Bowl host cities have made nothing at all
While the financial gain of hosting the Super Bowl might not be as extravagant as some hosts expect, some cities have reported making nothing at all or losing money.
Mayor Jerry Weiers of Glendale, Arizona, said that his city lost money on both occasions it hosted the Super Bowl, in 2005 and 2008.
And it doesn’t end in Arizona. The 2016 Super Bowl in Santa Clara ended up costing the city of San Francisco $5 million in police and transit services, and state-owned New Jersey Transit lost $5.6 million when the game was held there in 2014.
So, is it worth it to host the Super Bowl?
Deciding on whether hosting a Super Bowl is worth it will come down to who you ask.
Even if a city isn’t bringing in the $500 million to $700 million that the NFL dangles before them, if they can generate between $30 million and $130 million that Matheson suggested, then that’s still a nice financial boon to the city. Whether the game produces money or if it’s an economic wash, one thing that is sure to hold true is civic pride.
“We actually do get measurable impact from people’s satisfaction right after a city has hosted the Olympics, Super Bowl, or World Cup,” Matheson said.
Each situation is unique when it comes to hosting a Super Bowl. If a city has a pre-existing stadium that meets the NFL’s standard, that helps to offset some of the costs. There’s not much value if a city needs to build a $1 billion stadium to get the Super Bowl. Warm-weather locations obviously stand to make money off of the Super Bowl, as visitors would more likely stay longer than the average 3.9 days and spend more money.
Whether or not that satisfaction is worth it will likely continue to be hotly debated for years to come.