The Burden of Hosting a Super Bowl

When public money is used to help finance a new NFL stadium, two arguments help persuade officials and taxpayers that the investment is worthwhile:

1. The expensive new facility will prevent the local team from leaving town.

2. The expensive new facility will lure in a Super Bowl. Maybe more than one.

In the case of Glendale, Arizona, funding the Peter Eisenman-designedUniversity of Phoenix Stadium has allowed both things to come true. After years of frustration with a mediocre stadium in nearby Tempe, the Arizona Cardinals are comfortably settled in the Phoenix area for the long haul. Their state-of-the-art venue hosted its second Super Bowl Sunday.

The cost to local fans? $302.3 million from the Arizona Sports and Tourism Authority and $9.5 million from the City of Glendale to build the stadium. (The team contributed $143.2 million.)

In an especially profit-driven era for the NFL (the league would like to see its estimated $9 billion in annual revenue reach $25 billion by 2027), new stadiums are important to the league's business model. Public funding plays an important role in the construction of nearly each one, and as a "thank you" for the free money, the league often gives preference to cities with new or dramatically renovated stadiums when selecting a Super Bowl site.

Detroit in 2006, Indianapolis in 2012, Santa Clara next year: Some of the league's nicest facilities are put on display before millions of viewers on Super Bowl Sunday. The payoff for the host region is often cited as being around $500 million, but the actual number is much lower.

Victor Matheson, from the department of economics at the College of the Holy Cross in Worcester, Massachusetts, told CBS News that the regional economic impact from this year's Super Bowl will likely be somewhere between $30 million to $130 million for the metro area, where Super Bowl-sanctioned events are also taking place in nearby Scottsdale and downtown Phoenix. Matheson has previously published work showing that Super Bowls generate just 25 percent of the economic activity that league officials and host committees claim.

PricewaterhouseCoopers estimates $206 million in direct spending (tourism, lodging and transportation) will flow into the metro area as a result of this year's Super Bowl, but adds that after inflation the figure is two percent lower than projected for Glendale's first Super Bowl, back in 2008. For that event, the city of Glendale collected approximately $1.24 million in direct revenue and state shared sales taxes. (Because the NFL is a non-profit, state and local authorities can't collect taxes on game tickets.) That figure may improve with more hotels and restaurants having opened in the city since then.

Meanwhile, the Phoenix suburb is expecting to spend $2.1 million on security for Super Bowl week.​ A bill presented in the Arizona State Legislature last year would have allowed Glendale to bill the state for security costs but it did not pass.

It's not an especially exciting bottom line considering more than 40 percent of Glendale's current debt "is dedicated to paying off sports complexes," asreported in the New York Times last weekend.

Millions in public money towards a financially unstable National Hockey League team and Major League Baseball spring training facilities that havefailed to generate private-sector development have exhausted the pockets and patience of Glendale's taxpayers and elected officials. The Times article also states that the city of 230,000 residents has a debt equal to 4.9 percent of its tax base, twice as high as that of an average city in Arizona.

With the economic realities Glendale has to face thanks to its pro sports investments, mayor Jerry Weiers isn't as excited as the NFL or Cardinals owner Michael Bidwill would like for him to be, telling ESPN recently, "I totally believe we will lose money on this." His punishment—just like the one that befell last year's host mayor, East Rutherford's James Cassella—is not getting a free ticket to the game from the NFL. After hearing about the snub, Mitchell Modell, CEO of Modell's Sporting Goods presented the mayor two tickets on Thursday.

Cassella (who eventually received an invitation to the Indianapolis Colts' owner's suite and a parking pass from the owner of the New York Giants), was outspoken about what he perceived as arrogance and disrespect from the NFL toward its host city for Super Bowl XLVIII. As a result, Cassella claimed, New Jersey missed out on a disproportionate amount of economic activity and exposure because of the league's focus on hosting New York events leading up to the game.

After the game, Cassella and the rest of the country saw a shockingly bad public transit plan leave thousands of fans stranded for hours. Cassella has said since that he'd be OK with another Super Bowl coming to his city, but only if the league promised to do a better job planning for transit access and promoting New Jersey. A thoroughly forgettable football game, the public transit mess may end up being what everyone remembers most about the event.

If Arizona has a tourism issue, it's certainly not its ability to attract chilly Americans in January. (Matheson's $30-$130 million estimate takes into account the lost spending from potential tourists who will specifically avoid the region because of the Super Bowl's crowds and higher hotel rates.) No one will choose to spend a weekend in Phoenix just because they remember an adequately run Super Bowl XLIX.

"People only remember the site if some debacle happens," Matheson told NJ.com just before last year's Super Bowl. Glendale can't afford that kind of attention.