http://www.nytimes.com/2014/01/26/business/a-super-bowl-estimate-with-a-life-of-its-own.html?hpw&rref=business
The general consensus among New York and New Jersey natives is that the Superbowl will bring great economic benefits to the region, but do these benefits outweigh the costs? Several sources including N.F.L. officials project the Superbowl to generate $550 million to $600 million for the local economy. This seems like it would greatly boost the economy in the region, however, no economist seems to be able to show where this money will come from.
Skeptics of the $600 million figure believe that it leaves out some costs such as: security, transportation, and sanitation which are all direct costs as well as indirect costs like what kind of economic activity occurred during the same period not due to the Superbowl. These same skeptics criticize the government for spending so much money on an athletic event that may or may not cause an economic boom in the area.
Phillip Porter, an economic professor at the University of South Florida, believes that the economic benefits of the event are "zero" because the people that attend the Superbowl are not consuming local products, instead they are consuming products from a few large groups of interest. Any economic gains will go to only a select few beneficiaries such as hotels and the N.F.L.
Some economist believe that the government should not spend such a large amount of money on one athletic event because it is essentially a transfer of money from taxpayers to those few corporations that reap the majority of the benefit. Those that support the government spending believe that athletic events like the Superbowl not only create economic benefits, but also create intangible benefits that are not seen in consumer spending. These non-financial benefits boost moral and overall happiness in the community.
Either way the question still remains, should the government be spending such a large amount of money on an athletic event that may or may not produce economic benefits and is transferring money from the typical citizen to large corporations?
Matt, you and the article raise an interesting point. You would think that New York/New Jersey would be one of the best places to host the event given the sophisticated infrastructure. Because Americans demand high-profile athletic events like the Super Bowl, NBA Championship, or World Series, these events will always take place. To host them safely though does require a substantial capital outlay. Maybe the city should be compensated more like the NFL, with some of the advertising revenue to make hosting more attractive? Just a thought.
ReplyDeleteVery interesting read! this reminds me about the economic implications of most sporting events, globally. For instance, the FIFA World Cup requires its hosting countries to invest in a lot of infrastructure but the revenue they earn from the event often eclipses the cost. Similarly, when the national team of Brazil was playing in the quarterfinals of the 2010 World Cup, the country's economy shut down for two hours and lost billions of dollars in productivity. This link between sports and the economy is definitely fascinating and worth exploring in more detail!
ReplyDeleteThis is a very interesting article. New York has many great tourist attractions which makes it an ideal location for the Superbowl. Though it most likely won't generate $600 million, it will give a substantial boost to the local economy in my opinion. As football fans from across the US come to see the big game, they also come to explore the local city. Local restaurants and stores will be full of tourists, but the majority of the economic benefit will come from bars and night clubs. As the winning team racks up some absurd tab at a local club, A-List celebrities will follow to help congratulate the team and also flaunt their worth.
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