Media Continue to Perpetuate Myth that the Superbowl Brings in Big Bucks for Host City

With Super Bowl Sunday approaching, expect plenty of media reports on the projected economic windfall for host city Glendale, Arizona. Last year, when the NFL announced that its big game would provide a $600 million boost to the New York/New Jersey economy, that figure promptly became a fixture in news coverage of the event (CNN, 1/24/14; Newsday, 1/22/14; FoxNews.com, 5/21/14).

In one typical article, the New York Daily News (1/20/14) reported that city business owners were scurrying to grab a piece of the Super Bowl pie, quoting a local limo-service owner: “Nothing comes close to this. Everyone in New York City that has to do with transportation, bars, hotels — all will be making money.”

Never mind that numerous economists have looked in vain for any evidence that Super Bowl host cities strike it rich. In one study, Holy Cross economist Victor Matheson (12/09) calculated that through 2001, the average increase in economic activity during each Super Bowl was about $30 million. Lake Forest College economist Robert Baade has found similar numbers, telling theAssociated Press (1/27/14) that you could “move the decimal point one place to the left” on the NFL’s claims and still have “a generous appraisal of what the Super Bowl generates.”

And that’s economic activity, the total amount of money changing hands within city limits — not the amount that comes back to city coffers. When University of Maryland economist Dennis Coates (International Journal of Sport Finance, 2006) studied the 2004 Super Bowl, he found that added sales tax revenues in host Houston totaled about $5 million — well under the $30 million to $70 million that cities spend on increased police presence and other services for the game (USA Today, 1/25/15).

Economists have provided similarly dismal results for other sporting events, with major sporting events failing to make a dent in everything from local sales tax receipts to per capita income. (One study of sports strikes and lockouts failed to find any measurable impact on local economies even when local teams shut down entirely.) The most likely explanation: Increased spending on sports is largely balanced by reduced spending on other entertainment options, and even new spending quickly leaks out of the local economy into the pockets of out-of-town sports leagues.

Yet despite the overwhelming consensus of economists, taking sports impact claims at face value remains standard operating procedure for most journalists:

Journalists who’ve seen firsthand how newsrooms handle economic impact reports say there are multiple reasons for the uncritical coverage. First off, most reporters lack the expertise to evaluate impact claims properly — news-side staffers don’t know the sports world well, while sportswriters lack the financial know-how. Outlets that cover games on a daily basis may also be inclined to give their regular sources at sports leagues the benefit of the doubt.

Most of all, stripped-down news staffs pressed to operate on a 24/7 schedule are increasingly likely to grab an easy factoid and run with it — as when Turner Sports’ Jared Greenberg remarked on ESPN (2/2/13) in the runup to the 2013 Super Bowl: “Seven and a half years ago, parts of New Orleans under 15 feet of water. The University of New Orleans says the economic impact this weekend, $434 million.”

“Typically, a big number like that comes in and it gets a big headline,” saysLouisville Courier-Journal sportswriter Tim Sullivan, who was fired from his longtime position at U-T San Diego (formerly the San Diego Union-Tribune) not long after new owner Doug Manchester declared that the paper should be a “cheerleader” for the local football team’s stadium plans (Voice of San Diego, 2/8/11). “It doesn’t always get the scrutiny that it probably warrants, largely because newspapers, particularly, are understaffed and they don’t have the resources to do rigorous examination of a story like that every day.”

On the occasions where journalists have taken the time to dig deeper, some excellent reporting has resulted. The dubious benefits of hosting the Olympics have gotten widespread coverage (CNNMoney.com, 7/30/12; New York Times, 8/5/14). NPR’s All Things Considered (2/3/14) investigated a British government report that projected billions of dollars in profits from the 2012 London Summer Games and found that the only economist who reviewed the study before publication — University of Michigan professor Stefan Szymanski — termed it “tantamount to a whitewash.”

New York Times columnist Catherine Rampell (1/26/14) wrote that a Super Bowl spokesperson ducked requests for the 2008 study that provided the $600 million New York Super Bowl estimate — “she could not say why it was never released, who created it, what the underlying assumptions were, or even whether it represented just benefits or included costs” — and cited economists, including Holy Cross’s Matheson, as calling economic impact figures “flawed, myopic or outright fraudulent.”

And when Florida officials claimed that the Tampa Bay Rays created $100 million a year in economic impact, the Tampa Bay Times’ Stephen Nohlgren (3/30/13) noted that the study they cited “failed to distinguish between tourists coming specifically for Rays games and tourists who came for other reasons and just happened to take in a ball game.”

Such coverage, though, remains the exception rather than the rule. “For every one good article you see, there are ten others that don’t bother to do it, and the good ones just get lost,” says Noah Pransky of WTSP-TV in Tampa Bay, who also reports on sports economics at his own website,Shadow of the Stadium. “An industry joke is that reporters have always been mathematically challenged, but the problem has been magnified in recent years by the 24-hour news cycle and staff depletion at traditional media outlets.”

It also doesn’t help, adds Pransky, that sports development projects are growing exponentially more complex. Team owners are increasingly packaging “ballpark village” projects with stadiums, and turning to arcane financing mechanisms like bonds backed with payments in lieu of taxes (PILOTs), or EB-5 loans that offer expedited green cards for overseas investors in US development projects (OZY, 8/20/14).

While Pransky wonders if the proliferation of new media writers with little training in economics is partly to blame, other sports business reporters say that if anything, nontraditional outlets have outperformed their old-media counterparts in this area. Travis Waldron of ThinkProgress, who has debunked claims that the NCAA tournament is an economic boon to host cities (3/17/12), points to web-based sports sites like Deadspin (9/26/12) and Vice Sports (12/7/14) for their consistent skepticism on sports teams’ claims. (Disclosure: I myself have written several articles for Vice, including one onoverly credulous reporting on claims of LeBron James’ impact on the Cleveland economy.)

Limited research time should be no excuse in the modern age, says Waldron, when a quick Google search is enough to turn up studies showing that the average impact of hosting the NCAA tournament was actually negative.

Of course, hitting the Web to present a he-said-she-said report still is no substitute for real investigative journalism that attempts to determine whose claims are correct. “Our role as journalists is not to present both sides of the story, necessarily; it’s to present truth,” says Pransky. “And all too often, tight deadlines and the need for more content clouds that goal.”

Still, even just presenting readers with conflicting impact claims would be preferable to much of what passes for sports economics reporting. When Milwaukee Bucks president Peter Feigin gave a speech earlier this month claiming that a new publicly subsidized basketball arena could generate more than $1 billion in new development, Milwaukee Journal Sentinel sports business reporter Don Walker responded with an article (1/6/15) that cited Feigin 16 times — and no one else. Maybe his Google was broken.

• When the owners of the Detroit Red Wings provided the Detroit Free Press (7/20/14) with details of its planned $650 million arena district — which had already been approved for more than $300 million in public subsidies even as the city filed for bankruptcy — the paper uncritically cited team CEO Chris Ilitch’s claim that the project would create “at least $1.8 billion in total economic impact over several years, 8,300 construction and construction-related jobs, and 1,100 permanent jobs.”

• In 2013, with Philadelphia set to host golf’s US Open plus NCAA basketball, lacrosse and soccer tournaments, thePhiladelphia Inquirer(3/18/13) cited a local tourism official as projecting “probably conservatively” $150 million in economic impact as a result. The article consulted no actual economists to determine whether this number could possibly be for real.

  • After St. Louis Rams owner Stan Kroenke floated plans for a new stadium in Southern California, the Los Angeles Times (1/15/15) ran an article headlined “NFL Stadium in Inglewood Could Mean a Billion Dollars, 40,000 Jobs.” The only sources cited by the article’s three authors: the text of a ballot measure put forth by stadium proponents, and Inglewood Mayor James Butts, who said a new stadium could make his city “a top-tier metropolis.”
  • The New York Times real estate section ran an article (12/16/14) on how a new stadium for the DC United soccer team could serve as a “catalyst” for local development, citing DC Mayor Vincent C. Gray as predicting that the project would create $1.6 billion in “economic opportunity.” In fact, the economic consultants Convention, Sports & Leisure — co-owned by the owners of the New York Yankees and Dallas Cowboys — had admitted the previous month that their city-commissioned report had grossly overstated the projected benefits of the stadium, something that never made it into theTimes story.