Sugar Rush?: Evaluating the Effect of the Super Bowl on Phoenix’s Economy
On February 12th, the city of Glendale hosted the Super Bowl at State Farm Stadium for the 3rd time. The stadium, built in 2006 for the Arizona Cardinals to the tune of $455 million, 69 percent was publicly funded, stands as a testament to the importance of sports to the city’s economy. Indeed, although the actual numbers are still out for the most recent one, Glendale’s last Super Bowl in 2015 brought in over $719 million into the state economy over the course of the event, while ASU’s own David Rousseau projects that the event will bring over a billion dollars into the state. However, while this might be good news for Glendale, the question remains whether the economic benefits of such one-off sporting events last. Weighed against the seen and unseen costs of holding the game, the Super Bowl and other temporary events like it are ultimately more of economic sugar rushes than true gamechangers. To see why this is the case, we must look beyond the big numbers and spectacle and dive deep into the trade-offs that come when the NFL comes to town.
First, let us look at the short-term benefits. By far the biggest impact is the sheer number of people brought in for the event. Estimates of visitors for the 2023 Super Bowl currently stand at over 100,000, 90% of which are from out-of-state. These attendees are likely to be older, better educated, and much richer than the average tourist, with 35% having incomes greater than $100,000. The logic goes that these people would not have come to Arizona had the Super Bowl not been there, and that these richer tourists will spend much more money in the local community than the average tourist would. Businesses can then upcharge attendees and bring in more revenue during the period than they otherwise would. The upcharges would likely be concentrated in local businesses either directly servicing the event such as catering, private security, and ride-shares, or in the immediate vicinity such as hotels, restaurants, and bars. These businesses would also likely hire additional temporary staff during the event and temporarily decrease the local unemployment rate. Finally, local and state governments would also benefit in the form of increased sales tax and hotel occupancy tax revenue.
These in turn play into the long term benefits of hosting the Super Bowl. Public and private preparations for it provide impetus for infrastructure and investment that lasts beyond gameday. For example, in preparation for the 2015 Super Bowl, Glendale and the Arizona Department of Transportation added four on and off HOV-ramps leading to the road on the north end of the stadium. Similarly, in 2022, Glendale installed an adaptive signal system to better regulate the flow of traffic in 15 intersections around State Farm Stadium. The neighboring city of Peoria also invested over $3.2 million to repair roads leading up the Stadium. Meanwhile, in the private sector, five new hotels were built in the period between Glendale’s Super Bowls in the Sports and Entertainment District at Westgate, with a projected 4,000 further rooms to be added within the next three years. Related entertainment businesses such as casino resorts and sports betting also expanded in the same period. All of these projects will provide thousands of long term jobs in the Phoenix metro area, particularly in the construction and service industries. For instance, the University of Delaware reported that 2020 Super Bowl-related expenditures created 4,500 jobs in Miami, although they did not give the demographics for which jobs were created and if they were temporary. All of these together would fuel long-term increases in sales tax and hotel occupancy tax revenues, which will become increasingly important due to projected declines in revenues from state income taxes.
Nevertheless, while these figures might make the Super Bowl seem like windfall, they obscure many short and long-term opportunity costs attached to these benefits. For instance, the costs for overtime for police, medical personnel, and other emergency services can add up quickly, especially with events like the Super Bowl where drunk and disorderly behavior on a mass scale is more likely and where massive sports riots are a small but non-negligible possibility. Glendale alone spent an extra $3.4 million on essential city services during the 2015 Super Bowl and the days leading up to it. The Super Bowl also shifts government and private priorities towards the event itself, to the detriment of other areas and needs. For example, while improvements to public and private infrastructure around the Stadium are certainly a good thing, they necessarily mean that this money, time, and effort are not being put into fixing other city infrastructure that might need it more. Furthermore, although the Super Bowl might be good for types of businesses previously mentioned, it is certainly not good for other kinds. Football fans are not likely to go to bookstores, art galleries, and museums. The large amount of road closures and traffic congestion caused by the game might also keep local residents and average tourists away from Glendale and other nearby cities, as well as increase commute times for workers in and around the area. This also negates much of the benefits for the government since increases in sales tax revenues from businesses catering to attendees would be offset by decreases in sales tax revenues from businesses that do not.
However, all of these costs are overshadowed by the largest one of all: would all the Super Bowl’s purported benefits have happened anyways had it been held elsewhere? After all, the Super Bowl is not all Glendale is known for. The area also hosts the annual Fiesta Bowl, the Arizona Cardinals, spring training for 15 other Major League Baseball teams, concerts for big-name musical acts like Metallica and Taylor Swift, and a soon-to-be-completed theme park for toy-maker Mattel. The Fiesta Bowl alone produces $1.1 billion on average in economic impact every year, while the 2020 spring training season contributed $363.6 million to the local economy. State Farm Stadium will host at least 10 major events in the next 6 months that will bring hundreds of millions dollars into the local economy. In other words, the Super Bowl might boost business and get people to visit Glendale, but so would a few Arizona Cardinals games or concerts for Beyoncé and the Red Hot Chili Peppers.
These negatives beg the question of why the Super Bowl is portrayed as such a game changer deserving of taxpayer dollars when even the mayor of Glendale says that the city ultimately lost money because of it? The mayor’s arguments for this are laid out neatly in an interview he did with Arizona’s Family just days before the game: prestige, free advertising for the city, increased tourism and demographic growth from said free advertising. More succinctly, hosting the Super Bowl is worth the cost because it gives social and demographic benefits in addition to economic ones. While these are all valid points for the city at large in the long term, they are of small consolation to Glendale’s business community or its taxpayers in 2023 who gain little benefit from its high costs. Simply put, the Super Bowl’s economic impact does not justify the outsized support and attention it gets from Glendale and Arizona more broadly. Holding smaller, recurring events that benefit businesses more equitably would not demand outsized government funding or support and ultimately be a more effective way to promote lasting economic growth for Glendale and Phoenix in general.