How much is it worth to a city to host the Super Bowl?
Super Bowl boosters put the figure at about $500 million.
The basic method for coming up with this sort of number: Look at how many people come to town and how much money they spend. Then assume an added boost, because local businesses that profit from Super Bowl visitors will in turn spend more money at other local businesses.
But this 2009 paper on Super Bowl economics, by Holy Cross economist Victor Matheson lays out a couple pretty compelling reasons that this approach may give you an inflated number — suggesting that the real value of hosting the Super Bowl may be far smaller than the boosters suggest.
1. "Crowding out"
The 2002 Super Bowl was delayed a week because of 9/11. That initially posed a problem for New Orleans, the host city. An auto dealers' convention was scheduled that weekend and there wasn't room in the city's hotels for both the auto dealers and the Super Bowl fans.
New Orleans solved the problem by rescheduling the auto convention. But the conflict points to a problem with the typical Super Bowl economics methodology:
...while the Super Bowl filled every hotel room in the city, a large number of these hotel rooms would have been full of auto dealers even in the absence of the Super Bowl. Therefore, the economic impact of the Super Bowl should only include any hotel rooms sold to sports fans over and above the number of rooms that would have been sold anyway.
A lot of the money that fans spend flows right out of the host city, to far-off corporate headquarters. Those models do take into account for some of this, but those models may not be reliable in the case of the Super Bowl.
...it is common practice for hotels to raise their rates to 3 or 4 times the normal level during the Super Bowl. Local hotel desk clerks and room cleaners, however, don"t see a 300% or 400% increase in their wages. It is not the local workers but instead shareholders back at corporate headquarters who benefit from the event.
A particularly dramatic example of this came in 2005, when Jacksonville hosted the Super Bowl.
To alleviate the shortage of hotel rooms, the Super Bowl host committee arranged for six large cruise ships to dock in the area, providing housing for up to 7,600 guests. ...
Of course, after the big weekend, the ships pulled up anchor and sailed away, taking any revenues they generated with them. In effect, all spending that occurred on these ships was subject to nearly 100% leakage from the Jacksonville economy.