Super Bowl revenue of $500 million? Economists say no

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Minnesota officially unveiled its bid to host Super Bowl 52 Monday in a morning news conference at the Capitol, one of the money quotes coming from Gov. Mark Dayton when he stated hosting could generate a $500 million uptick in the state's economy.

According to multiple economists, those estimates are a little off.

Speaking to the Star Tribune's Jon Tevlin, Victor Matheson, a professor of economics at the College of Holy Cross that has studied economic impact of large events on the host city, says the NFL has been inflating profit figures for decades when it comes to Super Bowl figures.

“The NFL magically comes up with a number that corresponds roughly to what a city just spent on stadium subsidies. A Super Bowl is certainly a good thing for a city. But not nearly as good as they pretend.”

Matheson said the actual economic spike for a city hosting the NFL's title game is anywhere from $30-120 million.

Other economists seem even less optimistic on the high end.

Robert Baade, a professor at Lake Forest College who has focused his studies specifically on the Super Bowl's economic impact on host cities, says rather than $500 million, the decimal point should take a step to the left.

Baade spoke to CBS on the projected impact of the Super Bowl on this year's host, New York:

“The NFL says $500 or $600 million? I think $50 to $60 million would be a generous appraisal of what the Super Bowl generates.”

One of the main things both experts agree on when it comes to the NFL and Dayton's estimates, is that they fail to take into account that much of the money spent during Super Bowl week in the host city is dropped at NFL sponsored events, meaning the cash goes right back into the league's pocket.

Matheson also notes that the "substitution effect", which refers to consumers spending money on NFL events RATHER THAN their normal small business spendings locally, as a discrepancy in the NFL's figures and realistic estimates.

More examples debunking the large figures that have been bandied about appear here,here, and here.

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