What's Hosting the Super Bowl Worth? Indianapolis Offers Some Perspective

November 02, 2017 03:36 PM

Nearly six years after the crowds cleared out of downtown Indianapolis, memories remain of Super Bowl 46 at Lucas Oil Stadium and the nine-day celebration that led up to kickoff.

For many businesses, it was the busiest they've ever been.

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"We had staff that spent the night here a few days in a row - it was all hands on deck," said Craig Huse, whose family owns St. Elmo Steakhouse in downtown Indianapolis.

Few places were busier than St. Elmo leading up to the game on Feb. 5, 2012.

Huse said the Super Bowl tripled the sales for a typical week. National Football League executives and star players alike all wanted to sample the restaurant's iconic steaks.

"We had to manage the door," Huse said. "We don't normally do that. We're not a club. We're a restaurant and we had to manage the door."

Across town, the then-newly-opened JW Marriot Hotel's 1,005 rooms were sold out.

"That month was the highest month of revenues we've ever done at this hotel," general manager Philip Ray said.

The National Football League often references studies estimating cities which host the Super Bowl - as Minneapolis will do this season - benefit from hundreds of millions of dollars in economic activity.

A report by Rockport Analytics from July of 2012 estimated the Super Bowl generated $384 million in spending in Indianapolis.

It's up to each host committee to decide whether to hire a company to conduct an economic impact study, and those that do have historically hired Rockport.

But not everyone sees the Super Bowl as a giant economic windfall.

"I'm always skeptical of these," said Michael Hicks, a professor of economics at Ball State University. "Everyone promises big money."

Hicks has studied the economic impact of Super Bowls. He believes financial impacts are on the high end of estimates, and it's important to know what's in that big number.

The Rockport study breaks the impact down.

Of $384 million in spending, $60 million went to businesses outside of Indianapolis, and another $46 million was economic activity that would have happened anyway — leaving $278 million left over.

"The NFL didn't really make a promise to us that you do the game and this is the economic return for the community," said Mark Miles, who helped lead the Indianapolis Super Bowl host committee. "They were careful about that."

But even considering the extra costs to taxpayers, and the private donations needed to make the game happen, officials in Indianapolis were pleased with the Super Bowl's financial impact on the area.

"I think that's a really good day, a really good return, given all of the other positive things that happened," Miles said.

"Those numbers sound great to all of us, but when you spread that over the size of the city, it's really quite small," said Kyle Anderson, a professor of economics at Indiana University's Kelley School of Business.

Anderson said it's important to put the huge numbers people hear into perspective.

Using data from the United States Department of Commerce, the $278 million dollars in additional spending from the Super Bowl only amounted to about a 3 percent bump when you consider the overall economic engine in the Indianapolis area – which amounts to billions of dollars.

Suddenly, the big numbers don't sound so big any more.

"Even though there is a positive economic impact, which I'm sure there will be, it's going to be relatively small," Anderson said. "And it's not like people are going to go home and say my pay went up 10 percent because all of this is going on."

"That was one piece of a larger puzzle for us," said Allison Melangton, who also helped lead the Super Bowl host committee in Indianapolis.

"I haven't found a person in our entire community or state that would say it wasn't worth it for us to host the Super Bowl."

Officials did use a $1 million NFL grant to leverage more than $11 million in private donations to build the John H. Boner Community Center on the city's near east side.

In the years since the Super Bowl, the center has provided a place for thousands of young people to learn and play in a neighborhood that was desperate for such a facility.

There's also a community garden and a rejuvenated turf football field.

"The million-dollar challenge grant from the NFL really inspired us to think big when it came to what we could do here locally," said James Taylor, who runs the center.

In fact, the center has had an impact that has spilled far beyond its four walls. It's prompted millions of dollars in private investment in the neighborhood - used for building new housing and fixing up abandoned buildings.

The impact is clear with new businesses moving into the area.

"All told the Super Bowl's legacy project leveraged $153 million of investment throughout the neighborhood," Taylor said.

Yet there are costs to hosting the game as well.

According to the Minneapolis Super Bowl Host Committee, the committee has entered an agreement with the city of Minneapolis to reimburse an estimated $5 million in costs for police overtime and road closures. The committee also said this arrangement is "unique" to Minnesota and the reimbursement could grow if the costs are more.

Taxpayers foot the bill for infrastructure improvements, although the Host Committee says many of those improvements happening in the Twin Cities were already planned and happen to coincide with the Super Bowl. Residents will also have to deal with road closures and traffic during the days leading up to the game.

Supporters argue those costs are small when compared to the boost provided by the game - both financial and otherwise - resulting from just from being in the spotlight.

Rockport estimated the Super Bowl will generate $338 million dollars in spending in the Twin Cities, and said there are plans to issue a report on the actual impact after the game.

Credits

Matt Belanger

Copyright 2017 - KSTP-TV, LLC A Hubbard Broadcasting Company

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