Economists Say the NFL's Estimates of the Super Bowl's Impact on a City Are Laughable

In 2020, Miami will host the Super Bowl for a record eleventh time — that's for sure. However, the question remains whether South Florida will benefit from hosting the game.

After being turned down since 2010, Stephen Ross and his self-financed $450 million stadium upgrade finally lured a Super Bowl from NFL's cold and soulless hands. The game will arrive in Miami for Super Bowl LIV. 

“It’s going to be great for Miami, great for the Miami Dolphins and the only thing that could be better is when we’re playing in the game and winning it,” Miami Dolphins owner Stephen Ross said after the announcement. 

That sounds true, but is it? Seemingly every year the question arises: Does a city truly benefit for a Super Bowl as much as the NFL estimates? The NFL and host committees have measured the gross economic benefits from hosting a Super Bowl from $400 million to $700 million, but many economists say that number is grossly inflated. 

"When the NFL and its host committee estimate the event's economic impact, they tend to forget how the city operates before the event," says Andrew Zimbalist, an economics professor at Smith College.

"For example, San Francisco's (the host of last year's Super Bowl) hotel occupancy rate typically has hovered around 90 percent in February. So when fans flood area hotels, they're likely just filling spots that would have already been filled. Additionally, residents can be reluctant to visit the Super Bowl City area over fear of traffic, congestion, and increased security, displacing typical economic activity and leaking money out of the city."

"I'm expecting next year they're going to come out and say the host city is going to turn into New York City.  Not really. It's silly," Zimbalist says. "Every year they come out with the same stuff. The studies that they do are based on a false methodology and unrealistic assumptions."

While each circumstance stands on its own, many economists are on record saying major events like the Super Bowl don't truly stuff as many dollars into the host cities pocket as the NFL would lead you to believe. In fact, some cities could even actually lose money. 

“I totally believe we will lose money on this,” Glendale, Arizona, Mayor Jerry Weiers told ESPN before Phoenix hosted the Super Bowl in 2008. Well, he was right. Estimates found the city lost $1.6 million hosting Super Bowl XLII.

You might ask how it is possible that a city could lose money while getting an estimated one million visitors, but when you break down all the hidden costs it's not that hard to believe. To start, last year San Francisco paid at least $4.8 million in city services during Super Bowl week. The costs the NFL isn't always responsible for paying back: every extra police officer, every extra security guard, every extra anything else the city had to pay to keep chaos at bay.

Police and security costs are just the tip of the iceberg. The NFL doesn't just give away Super Bowls. It expects things in return that cost money or result in a loss of revenue. These are the hidden costs no one will mention but are definitely real.

According to the bid document, in 2014 the NFL requested that local police officers be provided at no cost for anti-counterfeit teams. The NFL asked for 20 free billboards in “NFL designated areas.” The league also requested that the local organizing committee pay all travel expenses for 1,880 people to travel to Minneapolis “to inspect the region,” according to the paper. The hotel headquarters were requested to make all of its meeting space available to to the NFL at no charge.

NJ.com reported that the state and other agencies spent at least $36.9 million in public money for the 2014 Super Bowl in East Rutherford, New Jersey, which was not reimbursed by the NFL’s host committee or the NFL.

Miami has a bonus unique built-in cost most cities don't have to deal with: the county now owes Stephen Ross $4 million. Built into Ross's stadium renovations agreement with the city was a list of events, that if the team would secure, would activate a team bonus. The price for a Super Bowl was set at $4 million. 

An advantage Miami does have, however, is that it didn't just build a football stadium with tax dollars to secure the "Big Game." Many teams, including the just-awarded Los Angeles, are given a Super Bowl as the prize for getting their city to pay for a new stadium. The bad news? The public is paying for a baseball stadium down the road. 

It's important to note city cost is not the same as economic impact. Those $12 martinis will most definitely be $25 martinis Super Bowl week, and hotel rates will be eye-poppingly absurd. What is good for one town, might be terrible for the next, however. A hidden fact within Super Bowl economic numbers is that the surrounding towns not involved can be sucked dry of their customers. So what's good for Miami, might be terrible for Dania Beach. It's a game of tug-o-war that depends on what each individual city has to offer, especially in the way of hotel rooms and nightlife. 

Not all economic estimates are zilch, though. Economist Victor Matheson at the College of the Holy Cross told CBS News that the economic impact of hosting a Super Bowl exists, but could be as low as $30 million. 

"It's a far cry from $500 million," Matheson said in an interview. "The economic impact studies do a fairly good job at measuring the economic impact that does occur but don't do a good job at measuring the economic impact that doesn't occur."

So what will the City of Miami gain from hosting a Super Bowl? It's tough to tell until the smoke clears. Many of the numbers leaked from past Super Bowls weren't meant for public consumption, or at least to be noticed after the fact.

Until the game has come and gone, we won't be sure how Super Bowl week stacked up against a normal February weekend in Miami. What we do know is many temporary jobs will pop up, lots of new South Beach television shots will air, and an undetermined amount of money most everyone agrees the NFL grossly exaggerates will be made.