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The Business of Hosting the Super Bowl

Miami already boasts a healthy tourism economy, but will hosting Super Bowl XLI affect the city’s bottom line?

With all of the media blitz, the merchandising opportunities, and the interest in the television commercials, there is no mistaking that the Super Bowl is a huge deal. But how does the big game help its hosting city’s economy? One need only look at Detroit, last year’s host, to learn what’s in store for Miami’s economy.

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Before the Super Bowl came to Detroit, the city and the NFL had great expectations. “We projected $300 million. And the study I saw said $261 million–which is a significant impact for the region,” says Jon Krieger, Spokesperson for the Detroit Regional Chamber. Krieger cites, “Super Bowl XL!!!” an economic impact study written by Dr. Patrick James Rishe, an economics professor at Webster University in St. Louis, MO, who studies the economic impact of sporting events and then posts the results on SportsImpacts.com.

Rishe estimated $260.7 million based on estimated total spending. Removing spending with non-local businesses from that estimate results in only $166.7 million. And of that number, only $104.1 can be attributed to direct spending. The report also estimated that 20 to 25% of spending could be removed from that estimate as spending that would’ve occurred had Detroit not hosted Super Bowl XL. This puts the actual impact closer to $116.7 to $125 million, and down to $72.8 to $78 million of direct spending. This number comes close to the estimate of another professor, Victor Matheson of the College of the Holy Cross, who estimated that the direct impact for Detroit would be $30 to $90 million.

So what do these numbers forecast for Miami? “We expect $250 to $300 million dollars,” says NFL Spokesperson Brian McCarthy. Ginny Gutierrez of The Greater Miami Convention & Visitors Bureau expects more. “We estimate a $350 to $400 million dollar impact,” she says. But professor Matheson still expects a $30 to $90 million economic impact for the city, the same range he forecasted for Detroit. “I expect the effect on Florida to be even less than Detroit. It is already a winter destination because it is warm, unlike Detroit which is cold in winter,” he says. Meanwhile, Dr. Rishe’s estimates a greater difference between Detroit and Miami. “The gross economic impact will likely be higher…you’ll see a higher volume of spending per travel party with better weather. The net impact, however, may be lower. Traditionally, the tourism/visitation rate to Miami this time of year is decent, and though I don’t doubt that the Super Bowl will create a spike in hotel occupancy rates, that spike is likely less than what Detroit experienced,” he says.

McCarthy counters these economic estimates. “We don’t see these professors at the Super Bowl, in the restaurants, seeing the impact,” he says. Host cities plan other visitor events that weekend to increase business. Detroit’s big event was the Motown Winter Blast, a festival that included iceskating, sledding, concerts, restaurant specials, and other events. And Miami created the NFL Experience, an interactive football event, as well as concerts, art shows, a beach volleyball tournament, and more. McCarthy also touts the economic success of the NFL’s Emerging Business Program, which connects minority-owned and women-owned businesses of the local economy with the vendors, sponsors and football teams involved with the Super Bowl. “We encourage them, when they need services on a local level, to engage these companies,” McCarthy says. The Program has been around for 12 years and has helped over 500 businesses.

One such business is Cater the Event, a Miami catering company that fed NFL Films, security people, and catered the official NFL Tailgate Party. Susan Bleemer, the event coordinator for Cater the Event, attests that the Emerging Business Program works. “It was definitely a plus. They really did stick to their guns and hired local people,” she says. As far as Bleemer is concerned NFL’s Emerging Business Program will have make a positive economic impact on business. “We have a good jump on the year,” she says. Other companies that participated in the program feel differently. Brenda L. Hill-Riggins, president of MARS Contractors Inc., a company that assisted in the construction of the venue for the Tailgate Party, feels that the impact on future business will be greater than the actual economic results of working with the NFL. “Financially the economic impact will be small, but the exposure is far greater,” she says.

Many people believe the financial gains of hosting the Super Bowl aren’t crucial. “We showed the world what Detroit offers. This is a huge benefit that isn’t captured in those economic models,” Krieger says. The city of Miami’s Gutierrez expresses a similar opinion. “We also look at the enormous value of the media coverage. We could not afford to pay for it–it is invaluable for us to be hosting a Super Bowl,” she says.

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The economists are sticking to their guns. “The city will say, ‘The Super Bowl was good for us and it will produce future revenue.’ I never heard of a business relocating because the CEO loved the Super Bowl. You don’t see Bill Gates relocating Microsoft,” professor Matheson says.

About the author

His work has also been published by Kill Screen, Tom's Guide, Tech Times, MTV Geek, GameSpot, Gamasutra, Laptop Mag, Co.Create, and Co.Labs. Focusing on the creativity and business of gaming, he is always up for a good interview or an intriguing feature.

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