The Title in Titletown, Part 3
This story appears in the August 2014 issue of Packerland Pride magazine. Subscribe to the magazine here.
That’s one of the last, maybe one of the most important, questions facing a hypothetical Super Bowl in Green Bay someday. Why go through it, and at what expense? Why break this all down: the hotels, transportation, gameday and weeklong events, security, team facilities – why would Green Bay want to endure the assured hassles of a Super Bowl to put a name already prominently featured on the national map of sport?
Evidence is out there that suggests playing host to the NFL’s premier event isn’t so great for the city it invades for two weeks. Not as great as the league says, at least; though that depends on a host of factors, including the host in question. Green Bay, because of its size, would be unique in many ways and in the many situations it’d present.
The first thing you need to know is that, no matter where it’s hosted, the Super Bowl is going to be great for the league; like, really great for the league. Pirate ships used to show up in some unfortunate port town, take what they wanted, then leave. Pirates didn’t bring a major worldwide event with them, but their ideology upon arriving at a place was similar. The following are included in a list of demands the league issued to Minneapolis, obtained by the Minneapolis Star Tribune, before they were selected to host the Super Bowl in 2018:
– All revenue from game ticket sales
– 35,000 parking spaces, for free
– Police escorts for team owners, for free
– Presidential suites in the city’s premier hotels, for free
– ATM machines that take only NFL-preferred cards installed and taking out ATMs that “conflict with preferred payment services”
– Installation of portable cell phone towers
– Two premium bowling centers to use for a league event, for free
– Space in local newspapers and on radio stations to promote the “NFL Experience” in the month before the game, for free
– Exemption from municipal, county, and state taxes
So, to recap: no taxes, please, and thousands of free parking spots, if you could, and how about some free police work, and oh, how about your finest suites for free, as well as bowling alleys and ad space in your local newspapers and radio stations, and, also, we’ll take all that ticket revenue, too, thanks. All of that puts you in the conversation to host their big day; it doesn’t promise anything. This is a list the NFL can get away with, can have released to the public and still float above, because if you don’t do it, some other city will.
Robert Baade, Ph.D., is the A.B. Dick Professor of Economics and Business at Lake Forest College in Lake Forest, Illinois. One of his major interests of study is the intersection between economics and sports, particularly major sporting events like the Super Bowl, Olympics, and World Cup, among many more.
Understanding that Green Bay poses a situation unique to any other in the league, Baade says many of the same factors would have to be considered by the city when bidding for a hypothetical Super Bowl. Though Green Bay is different, the league won’t change their process – though as we’ve mentioned in previous parts of this series, they’ve shown they could alter aspects of it – for selecting a host.
“The league has a powerful interest in making sure the Super Bowl is going to be well conducted and it’s going to create the right kind of impression,” Baade says, “so remember the NFL is a monopoly, and you’ve got lots of cities bidding for this event in the hopes that somehow it’s going to generate an increase in economic activity for them. But the bidding for the event is often ruinous. You can just get carried away with making promises about doing this thing and that thing and the other thing to please the NFL, and that might jeopardize the economic viability of the project. But you are dealing with a monopoly here, when you talk about dealing with the league, so when cities try to secure an event like the Super Bowl, they’re going to have to outbid others for it, and that’s often got some pretty significant negative implications.
“This is not unlike the IOC (International Olympic Committee) and FIFA, the World Cup; these monopolies are in a powerful position because so many cities would like to host these mega events, hoping against hope that it will translate into something economically worthwhile, but the chances of that happening, for a lot of reasons, are quite slim and nowhere near what it is that the NFL is going to argue what occurs in the way of impact.”
Minnesota Governor Mark Dayton gets this, and seems to understand that when you deal with the NFL you’re not really dealing with them so much as you’re taking a dinner order from a businessman with a Bluetooth in his ear sitting in a stuffy airport steakhouse.
Along with calling the list “way overboard,” Governor Dayton said the following in June, after the Super Bowl was awarded to Minneapolis:
“I don’t think anybody needs free bowling alleys. Anybody who can afford to come here for the Super Bowl can afford to pay for the shoes and bowling ball and lane time.”
Gov. Dayton also said at the time that the NFL’s list of demands “doesn’t fit with my personal tastes,” but added, “the perfect is the enemy of the very good, and this is a very good deal for Minnesota.”
Every host city is different, especially a place as singular on the major sport landscape as Green Bay. It is difficult to parse the benefits and it’s clear there would be costs – since the NFL doesn’t plan on picking up many tabs, someone will have to. But what about the benefits of a Super Bowl coming to town? Even there, the numbers seem more muddled than they first appear.
The going number these days is $600 million. That’s about how much of an economic impact the NFL and committees committed to hosting the Super Bowl say the event has on its host. That’s how much was projected in New York/New Jersey last season, and that’s the area the Arizona Super Bowl Host Committee is predicting when Glendale hosts the 2015 title game.
The problem is that, in the case of last year’s Super Bowl, no one is quite sure about, or willing to say, where that $600 million figure came from. Catherine Rampell of The New York Times tried to dig that up prior to the 2014 game, finding that “everyone who cites that estimate credits someone else for producing it.”
Then the economists get to work on it. Ever the bloviating self-PR machine, the NFL might just be really good at adding economic boosts, not so good at subtracting costs.
Rampbell writes: “Usually the criticism is that the number leaves out all kinds of costs, both direct (like security, sanitation and transportation, typically paid for by taxpayers) and indirect (such as what kinds of economic activity and tourism did not happen because the area was snarled with football traffic).”
More on that last bit in a second. Baade, in a report from the Phoenix Business Journal in advance of next year’s game, estimates the Super Bowl’s actual benefits for the host city range somewhere between $30-$90 million, a far cry from the $600 million floating around out there.
Now, this drop can be picked at from different angles, too. One is the idea that, when a Super Bowl comes to town, the local economy doesn’t actually see much of that economic activity. Money changes hands between visitors and the NFL – their ATM machines and merchandise – and money made in hotel rates and chain restaurants goes back to corporate headquarters, not necessarily staying where it was spent.
“I think there’s something in the way of an economic impact but it’s going to depend on the locale, it will depend on the size of the economy, it will depend on how much activity would have occurred, it’s all of those things,” Baade says. “I think one of the problems we have with the Super Bowl is that it’s often the case that the analysis is prospective. You’ve got people of course in Green Bay who’d love to see a Green Bay Super Bowl, so they’re going to make an awful lot of promises for what it could do for Green Bay, and you really have to be careful, the analysis has to be more rigorous than it often is when you’re doing this sort of prospective thing because you’ve got to be mindful of the fact that there are people who stand to gain something from hosting the Super Bowl and they’re going to be the staunchest advocates for hosting.”
Another economic situation in play is what’s called the “substitution effect.” As Baade explains, this is essentially when one event bringing in tourists pushes out another, or keeps people wanting to avoid the craziness and spiked prices of the event away. Baade says the $600 million approximation does not factor for this.
As Rampbell is quoted above in her piece, there are economic activities and tourism not related to football that a place could be missing out on by hosting a Super Bowl. That said – and here’s one of the peculiarities of Green Bay’s situation – if we’re all being honest, in a February in Wisconsin, what other tourism boom or great economic activity would the area be missing out on or displacing? Would anything be comparable to a Super Bowl’s impact, even if that is grossly lower than advertised?
“When you think about any Super Bowl in a cold climate, other than places like New York or Chicago, there aren’t that many people that’d be coming to escape the rigors of winter to Green Bay or other cities that are cold weather cities,” Baade says. “So for Green Bay, and especially given the size of the Green Bay economy, you’ve got all of these outside folks coming, and of course that’s going to make a difference for Green Bay’s economy.”
Green Bay could see a significant local spike, but that doesn’t mean there wouldn’t be a substitution effect. Baade says in this case that could be seen at a state level.
“You are going to be bringing in people from outside Green Bay, from Milwaukee, Madison, Sheboygan. So to the extent that you’ve got people, let’s say in Milwaukee, that would have otherwise spent their money in Milwaukee but are now spending it in Green Bay as a consequence of the Super Bowl, Green Bay benefits but it’s going to come at the expense of Milwaukee to a certain degree,” Baade says. “So there’s a statewide substitution effect. We see things like that with the Olympics. One thing when I studied the Australian Olympic Games, Sydney gained but it came at the expense of Melbourne and Brisbane and other places, so there is a substitution effect on a more statewide scale.
“There are lots of things to consider here. But of course cities do this to one another all the time. They’re trying to promote their own economic interests. If you’re vying for a Mercedes-Benz plant or a Tesla plant, it would come at the expense of somebody else. You always have to be mindful of bigger substitution effects, but cities are in competition with one another so they often ignore that sort of thing.”
When speaking to him earlier this summer, Green Bay mayor Jim Schmitt said of adding more Super Bowl-friendly hotels and convention space: “I don’t want to build a church for Easter Sunday either. I want to make sure we can make money when there’s not a Super Bowl. So I’d have to look at all that. It’s not the Olympics or something.” Baade echoes this sentiment, saying that building hotels for a single event can be a problem.
This is important because when a city or area incurs all the costs of transportation and infrastructure – because again the NFL is your mooching guest for the fortnight and you’ve got this tab and the next one after that, right? – somebody is paying for it, and if it goes into public funding we’d have to imagine there being a bit of an issue with that notion in Green Bay.
One positive is that Lambeau Field’s most recent renovations were all paid for in-house by the organization, and without a Super Bowl in mind, so taxpayers wouldn’t be gouged or threatened to pay for a new, Super Bowl-ready stadium, as sometimes happens in other cities.
Another positive is that the 0.5 percent sales tax in Brown County used to fund Lambeau’s renovation in the early 2000s is set to end in 2015, which by itself takes burden off taxpayers, but doesn’t have anything to do with whether or not there would be a need for public money should the Super Bowl show up. Schmitt’s words on not building things for one event – a la a World Cup or Olympics – are wise, but a Super Bowl could require public money anyway.
Baade says taxpayer money is often spent on things like infrastructure – of which there’d have to be some modifications due to Green Bay’s size – and the major security presence a Super Bowl demands, as well as clean up post-event. This is where Baade notes cities in the heat of a bidding war can get themselves in trouble, making promises to pay for so much until it puts the economic impact in danger of tipping away from an advantage.
Right now, Green Bay and Brown County are just about set to come out of a long, hotly-disputed (initially) period of time when they helped pay for a football stadium. What, if anything, would be worth starting a new period like that, should the situation require it?
On a given Sunday in Green Bay, the Packers estimate that the direct and indirect economic impact of a game at Lambeau Field is around $13.5 million. This, from a report from the Green Bay Press-Gazette, is around a $1 million per game bump from estimates made in a study from the 2009 season. That means a low-end Super Bowl impact estimate of $30 million, such as Baade’s, would be more than two times a regular Sunday.
But numbers can be pulled apart and cast in enough different shades of gray, highlighting whatever the side you want people to see. As Baade says, it’s more important than ever for cities, when dealing with a monopolist like the NFL, to understand through significant study what all the plusses and minuses of playing host would bring. But, add in civic ego and pride, and the ultra-competitive environment fostered during bidding sessions, and it’s sometimes difficult to keep the bigger picture clearly in focus.
“The NFL is going to ask for all kinds of favors for their officials,” Baade says. “They’re going to want great hotel rooms, they’re going to want them at a very low price. I mean, there are costs that cities need to understand in bidding for these things. You do so at your own risk.”
Even at its lowest estimate, the Super Bowl would probably bring the kind of money into Green Bay that any other gameday environment at Lambeau simply isn’t capable of. But there would be costs, hotels to build, security to hire and changes to the daily operations of the city that are not included in many rosy projections of what comes with a title game.
Before anything we’ve discussed, though, the most relevant question remains: Will a Super Bowl in Green Bay ever be more than a conversation topic? We may never know, or find out how it’d actually stack up against other bidders. It may never look attractive enough for the league to seriously pursue. We may be left to wonder. We could be left to hope for playoff games at Lambeau. We can remember that this is not a consolation prize. We should remember that, all told, the Packers’ current modus operandi is working pretty well as is. That a Super Bowl could still, despite the demands and promises, turn out to be a successful event for Green Bay is the reward at the end of all the risk. And risk is always easiest to discuss when it’s not yet real.