It could appear that Super Bowl money will be pouring into Minneapolis. But a close look reveals it might be more of a trickle.
We can start with the hotel rooms. To become a Super Bowl city, Minneapolis had to prove it had 24,000 rooms within 60 minutes of the game. From there the stats soar. We just need each occupant to stay 10 days. and the city gets 240,000 paid-for nights. The problem though is what would have been. Some of those rooms would have been occupied without a Super Bowl. In addition, there is always some “leakage.” Dollars received by a hotel are not necessarily spent in Minneapolis.
Similarly, Super Bowl projections on food and entertainment might be excessively high. Yes, the tourists spend a lot.The downside though is the locals who stay home. Others just leave the city to avoid the hoopla. And you always have the affluent individuals who book rooms for the requisite minimum. However, remaining for just one overnight, the game, and a party, their local spending is minimal.
You can see where this is going. Spending projections need a reality check.
Meanwhile, funding for the new U.S. Bank Stadium included a whopping $348 million from Minnesota and another $150 million from Minneapolis. The city also had to provide 35,000 parking spaces, thousands of hotel rooms, hundreds of buses and limos, and sales tax exemptions to the NFL. And to all that we need to add the extra security and police and subtract the cancelled work days.
The Rosy Projections
So, we wind up with host committees projecting a bounty of more than $300 million while down-to-earth economists say the amount could be $30-$40 million. Why the difference?
Our Bottom Line: Confirmation Bias
Many of us want the Super Bowl to be a financial success. When we want something to be true, we cherry pick the facts that prove we are right. Called confirmation bias, concluding that the Super Bowl generates a financial bonanza validates the host committee’s projections. And it makes most of us feel good.
In fact, happiness could be the one sure thing a Super Bowl will create for a host city. And happiness is priceless.
My sources and more: The NY Times provided the perfect up-to-date facts on Super Bowl LII finances while the local perspective is at minnpost.com. From there, I returned to what we have used in the past including WalletHub, Walter Matheson’s paper and a past econlife post. But if you want even more do go back to the San Francisco Super Bowl at SF Examiner and the host committee report.