Estimate of $338M spending boost from 2018 Super Bowl kicks off debate

The Minnesota Super Bowl Host Committee estimated Tuesday the Twin Cities metro area will reap $338 million in economic activity from the 2018 game — a figure that some economists immediately stamped as too high.

Economists and civic boosters have long disputed the financial benefits to cities of hosting mega events such as the Super Bowl. Determining the net benefit relies on dozens of assumptions and calculations that can vary widely depending on who's running the numbers.

Host Committee spokeswoman Andrea Mokros acknowledged there is never a definitive number but said the study demonstrates that the event will have a "positive impact on our community and, to use the oft-used line, this is more than a game. … We want folks to know all of the benefits to hosting a game."

Philadelphia-based Rockport Analytics Managing Director Kenneth McGill met with reporters to discuss his firm's assessment, with the caveat that he couldn't be quoted.

His report emphasized the skepticism surrounding projected profits from hosting the Super Bowl. The summary stressed that Rockport sought to be conservative in its estimate, leaving out questionable spending, acknowledging strengths and weaknesses in the methodology and not including "softer benefits," such as media exposure.

As an example of Rockport's reserved approach, the firm subtracted $68 million from an initial $406 million in estimated new spending to arrive at the final $338 million projection. The $68 million comes from "displaced tourism," visits that would have occurred without the Super Bowl.

Victor Matheson, sports economics professor at College of the Holy Cross, said Minnesota has the "good fortune" that "it's not exactly a tourist wonderland in February." The football frenzy will benefit the local economy during what is normally a slow time of year.

The report also estimated a "net windfall" of more than $29 million in taxes to state and local governments.

Civic organizations invariably promote the benefits — tangible and intangible — of such big-name events. But economists and recent history in the Twin Cities indicate the economic impact tends to be overestimated.

Ahead of the 2014 Major League Baseball All-Star Game at Target Field, Meet Minneapolis, the city's tourism arm, forecast a $75 million boost to the local economy. A few months after the game, the group revised the number to $50 million. The state Department of Revenue estimated the actual number between $21 million and $55 million.

Matheson said Rockport's estimate on the 2018 Super Bowl is high by at least $200 million, but he gave the company credit. "They've clearly made an effort to be much more honest than we've seen in the past," he said.

To demonstrate the complexities involved in the projections, consider: Rockport estimated that nonresident visitor spending during the event would be $284 million. That number assumes there will be 125,400 nonresident visitors. Anyone who comes from more than 50 miles away is a nonresident, but if someone is a Twin Cities resident who stays in a hotel, they are counted in that number.

Further breaking down the $284 million, some 25 percent of the spending will be on hotel rooms. Rockford estimated that each visitor will spend an average of $500 shopping — apart from food, beverage and entertainment — during a likely stay of four nights.

The retail spending estimate is high, Matheson said. He also questioned the game's ripple effect on the local labor force.

The report said the game at U.S. Bank Stadium will support more than 5,000 jobs at local business with wages of $242 million.

Most of the financial beneficiaries will be corporations, many of them based elsewhere, Matheson said. "It's not like they're doubling or tripling the wages of room cleaners," he said, adding that some workers might get a few extra shifts or big tips at restaurants, but nothing major.

Economics professor Robert Baade of Lake Forest College, who also has published studies on the economic impact of Super Bowls, said the game isn't worth it. "Cities are often seduced by the, 'We'll have our moment in the sun or our moment in the snow,' " he said, but added that if something goes wrong, "it cuts both ways."

Matheson also doesn't buy the long-term benefit of publicity for the city. "The main way your city becomes a tourist destination is people go on vacation and come back and tell their friends what a great time they had on vacation in Minneapolis," he said. When they come back and say they had a great time at the Super Bowl, then their friends want to go to a Super Bowl. "They're distinctly different," he said.

Estimates of Super Bowl impacts from previous years vary markedly, with the greatest outlier being $719 million brought in by Phoenix in 2015 (including $295 million in direct spending and the rest in "ripple effect" impacts). New York reported some $600 million in 2014. Then there's Dallas, which was hammered by a winter storm in 2011. The city brought in a disappointing $200 million.

Mokros insisted the Dallas storm scenario won't be repeated in the deep Minnesota winter of 2018. "Dallas was unprepared," she said. "In Minnesota, we are prepared."

Rochelle Olson • 612-673-1747

Twitter: @rochelleolson