In case your summer reading list didn’t include my column on Wrestlemania’s inflated economic impact, here’s a Super Bowl-style remix:
Big events make ya feel good, but they don’t typically provide cities tangible returns on investment.
The Miami Herald detailed the $20 million (or more) tab Miami-area taxpayers will be picking up for Super Bowl LIV next February, from police overtime to extra city services to a $4 million straight cash payment to Dolphins owner Stephen Ross.
The headline explained: “Miami governments spending millions to make money and get exposure.”
The exposure claim is laughable because if you have ever been to Miami Beach in February, you know the area doesn’t exactly have trouble attracting tourists from all over the world.
But the “make money” claim is a stretch too.
Miami City Manager Emilio Gonzalez told the Herald “we’re going to get a huge economic impact.” He then likely threw out some inflated figure in the $400-$600 million range that — to the paper’s credit — didn’t make its way into the story.
But if you ask an economist — not the marketers who typically produce the rosy economic impact reports — you’ll likely hear the true benefit to Super Bowl host cities is far less significant.
“Economic impact” does not equal revenue, and impact reports always seem to conveniently forget basic economic principles.
For instance, Miami politicians will never tell you big events disrupt local economies, and many people choose to spend less time and money in the city during event week. These factors negate much of the event’s impact. So while Super Bowls create business winners, they also create plenty of losers.
There’s also the fact that much of the cash hotels, restaurants, and other corporations pull in Super Bowl week gets shipped right out of town to corporate headquarters in other parts of the country. But rest assured, those Hilton employees in Dallas and Marriott employees in D.C. are greatly appreciative of those Miami subsidies!
Then there’s the public cost; the $20 million estimate in Miami may be on the low side. I wrote for WTSP last year how Super Bowl hosts need to promise endless city services “at no cost to the NFL.”
We also know from a leaked 2013 NFL document the league’s crazy list of expectations require tens of millions of dollars in additional private fundraising by the host committee — real money coming out of the local community to pay for these events.
Super Bowl revenues aren’t all new revenues — much of it comes from local corporations and individuals who choose to spend money on Super Bowl events instead of charity events, other entertainment options, community investments, etc.
Between now and February, you’ll hear a lot of people who stand to make money off the Super Bowl — as well politicians simply infatuated with the game — tell you about all the intangibles the NFL will rain down on Miami next February.
But it will take a lot longer for them to try and find tangible returns on investment from a game that costs taxpayers so darn much to host.