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Others’ Opinion: Would a Super Bowl pay off?

Published 8:53am Wednesday, April 2, 2014

No doubt

The anti-stadium crowd is back, this time with full-throated indignation over state tax incentives required for Minneapolis to be seriously considered as a Super Bowl host in 2018.

It’s a tiresome reprise of arguments ignoring the benefits of major league status for a state that must constantly battle its reputation as a frozen outpost on the Canadian border.

This worldview makes no room for professional sports or the millions of fans across the country who spend money on pro and college teams. Fact is, top corporate talent and skilled young people make career choices in part based on quality-of-life factors that include entertainment options and civic vitality.

Consider the objections we’ve heard:

The National Football League promised the game in return for public financing for the Minnesota Vikings’ new stadium.

Wrong. A Super Bowl was held out as a possibility, but NFL officials and state leaders were consistent in saying there were no guarantees. If you haven’t noticed, the NFL does a terrific job of setting up competition among cities; both Indianapolis and New Orleans are presenting competing bids for the 2018 game.

Super Bowls are a money-losing proposition for host cities, and economic-impact studies are always exaggerated.

No and maybe. Because Super Bowls mostly attract out-of-state fans, a solid case can be made that there are net economic benefits. Although it’s true that boosters too often tout flimsy projections to hype their efforts, that’s not always the case. Minnesota officials are quick to point to an impact report done for the city of Indianapolis after the 2012 game. The estimated economic benefit to businesses that directly serve visitors or are involved in staging the game: $152 million. Many sports economists would scoff at that figure, but an event that draws tens of thousands of tourists will fill hotels and restaurants.

That figure no doubt includes spending by local residents who would have spent their entertainment dollars in the city anyway, and it probably failed to subtract tourism spending that was displaced by the game.

Not true. The study, by Rockport Analytics, excluded spending by residents and reduced the net benefit figure by $46 million to reflect displaced tourism. You can argue with the spending figures — they are estimates, after all — but tax receipts can be tracked. After excluding typical tourism spending, which would have generated about $6 million, hosting the game generated a net $39.9 million in state and local taxes after factoring in incentives, Rockport found. And keep in mind that February is typically not a booming month for hotels in the Twin Cities.

It’s an outrage that Super Bowl boosters want $10 million in tax breaks for billionaire owners and millionaire players.

That’s an understandable objection, but it’s the cost of doing business with the NFL. Boosters say that a competitive bid requires tax breaks and that the bids from Indianapolis and New Orleans will include similar provisions. They also emphasize that those two cities would not be bidding for the game again if it were a losing proposition. In addition, the league wants to see both private- and public-sector commitment to hosting.

If business leaders want the game here, they can pay for it.

They will — to a point. That’s why Gov. Mark Dayton asked former Carlson CEO Marilyn Carlson Nelson, Ecolab CEO Doug Baker and U.S. Bancorp CEO Richard Davis to lead the bid process, including raising $20 million to $40 million in private money to cover hosting costs. “The business community is more than willing to step up and is stepping up,” Baker told an editorial writer last week.

Easily overlooked in the debate over direct economic impact is the branding value for Minneapolis-St. Paul. For about a week, the Super Bowl captures the nation’s attention. Executed well — see Indianapolis, 2012 — the media spotlight can be a huge boost for the market, with lasting benefits that include improved opportunities to land other major events.

The NCAA already has Minneapolis and the new stadium on its list of finalists for a future Final Four, and a successful Super Bowl effort would help secure that increasingly valuable event.

The 2014 Super Bowl drew the largest-ever U.S. TV audience — a remarkable 111.5 million, breaking the record of 111.3 million for the 2012 game.

Twenty-six years after the Twin Cities last hosted the game, a 2018 Super Bowl would give the metro area a rare opportunity to show off a revitalized Downtown East and Nicollet Mall in Minneapolis, an improved transit system, a reinvigorated St. Paul, and an expanded Mall of America.

Visitors and viewers would see a metro area that is moving forward and willing to compete for major events that will help sell the region for years to come. Based on those returns alone, hosting a Super Bowl on the Canadian border is worth the investment.

—The Star Tribune

 


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