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Super Bowl or Super Bust?

February 3rd, 2012 by Wade Kozich

Admittedly, sports have not captured my attention anywhere near like they did when I was a boy growing up in Lorain, Ohio rooting for the Browns and Indians. My life moved beyond those young days when guys like Rocky Colavito were Gods to me.

As a guy who has spent his life around economics, something this past year really caught my eye. I was over in Indianapolis last Fall and could not believe all the construction going on. I was really impressed and inquired to some of my Indiana colleagues regarding what was going on in the city. They told me Indianapolis was getting ready for the Superbowl and the was spending nearly $200 million. That number was staggering to me, yet, it was obvious that Indy would be forever changed.

I decided to do a little research on the economics of the Super Bowl and there are big questions as to whether it even benefits the city. Research shows that Indianapolis itself will take in about $7 million in additional taxes but spend $8 million for a loss of $1 million. Visitors, however, will spend about $200 million during the game. Tickets go for $2,000 to $20,000 and hotel rooms average about $500 per night. This is Big Business! The NFL brings in $10 billion a year and the current commissioner makes about $10 million a year.

Back to the effect on Indy… My opinion is that you can never really measure these things; improvements to the city and the reputation of a city can last years after an event and may define a city, after all, people still visit the Coliseum in Rome and how many years ago was that built?

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