Super Bowl XLVIII 2014 And The National Economy: From Los Angeles To East Rutherford

on February 01 2014 10:38 AM
MetLife Stadium Super Bowl XLVIII
Taking place at East Rutherford, N. J.’s MetLife Stadium, representatives of the AFC and NFC will battle in Super Bowl XLVIII on Sunday, Feb. 2. Reuters

Stadium beer: $9. Last-minute ticket to the game: $3,000. Super Bowl XLVIII T-shirt: $25. The Super Bowl experience in New York/New Jersey: $600 million? 
 
There’s no doubt you’ll be paying inflated prices if you have any plans of attending the Super Bowl this year, but do the numbers really add up to as much as the NFL claims?
 
The Super Bowl, one of America’s greatest pop-culture phenomena, has transformed from just a football game into a major economic event. This year’s Super Bowl XLVII -- to be held at the MetLife Stadium in East Rutherford, N.J., will be no different, drawing attention and dollars from all corners of the country. 
 
For one small California-based pizza and Italian food chain restaurant, Ameci Pizza & Pasta, Sundays have always been busy, but on the biggest Sunday of the year, sales tend to match the scale of the Super Bowl. The Ameci in Newhall, located in suburban Los Angeles’ Santa Clarita Valley, saw a 48 percent increase in overall sales on Super Bowl Sunday last year compared to the average of other Sundays, along with an exceptional number of deliveries. 
 
The numbers are hardly surprising considering that the televised sport has a long history of record-breaking national viewership, consistently attracting about 100 million viewers annually. What’s less expected, however, is that the game last year between the Baltimore Ravens and the San Francisco 49ers took place in the Gulf Coast city of New Orleans, which is geographically far removed from the LA area. Still, all the way on the West coast, Ameci was celebrating a successful Super Bowl Sunday of pizza and pasta sales as the Ravens hoisted the Vince Lombardi Trophy after beating the Niners. 
 
In Nebraska, a state that has no NFL team, the Super Bowl also reigns supreme. Though the state’s college team, the Nebraska Cornhuskers, is what dominates football culture in the state, the Midwestern state is no exception for Super Bowl mania. According to one Wal-Mart in Omaha, the chain of superstores is preparing for a surge in sales for alcoholic beverages, chips and soda, securing extra stock for the week leading up to the Super Bowl with their different vendors. 
 
Unlike the other sporting event championship games, like MLB’s World Series or the NBA Finals, the Super Bowl has become such a massive occasion that it has taken on the status of a holiday. For some families, deciding where you watch the Super Bowl can be as complex as splitting holiday’s with various in-laws. While the Denver Broncos and the Seattle Seahawks have been preparing all season for this year’s championship game, outside of the New York/New Jersey area, grocery stores, bars and restaurants in some of the country’s unassuming pockets are also prepping for the game. 
 
Historically speaking, Super Bowl Sunday has always seen an annual boost in sales for both the restaurant and the specific supercenter, even when located in cities that are not connected to the NFL. Los Angeles, for example, has not had a team since the departure of the Los Angeles Raiders in 1995, when the franchise moved to Oakland. Still, football fandom thrives. A mixture of a transplanted population and a rich history with college football has kept the interest in the sport alive in Los Angeles, which is by far the largest U.S. market that does not have an NFL team. In Nebraska, football begins at a grassroots level, but takes on a professional-league-like following by the time college football rolls around.
 
So despite failing to attract a football franchise to the city, the residents still make their Sunday homage. But this could be said of almost any American city. The unique thing about football, but particularly the Super Bowl, is that it has reached another level of viewers, attracting not only football fans, but pop-culture junkies, media and advertising gurus, and people who just like to eat, drink and party. 
 
All of this hype, marketing and fandom has contributed to the widely studied and often debated concept of “Super Bowl Economics” -- making sense of how the massive event affects local businesses and economy of the host city. For the New York/New Jersey area, this would include an increase in hotel bookings, and a boost in the number of taxi rides and tapped kegs at bars. 
 
On a larger scale, the economic impact of the Super Bowl on host cities has been hotly disputed. The NFL officially advertises that the Super Bowl will draw in anywhere from $500 to $600 million for a host city, giving an obvious monetary incentive for future cities to bid to host the game, and consider building additional infrastructure of stadiums to host the Bowl and still be able to recupe costs rapidly. For some economists, this number has been greatly overvalued. 
 
In a phone interview with the International Business Times, Robert A. Baade, an economics professor at Lake Forest College in Illinois, and co-author of “Super Bowl or Super (Hyper)bole? Assessing The Economic Impact of America’s Premier Sports Event,” a research paper that analyzes the costs and profits of the event, and explains why national success can be as deceptive as NFL’s inflated numbers.
 
The Super Bowl sounds like every food and beverage businessman’s dream, but in the way economics can explain how the impact has been inflated for host cities, the national effect on remote cities is also being overestimated. 
“Where is the money coming from?” Baade asks. It’s basically taking the same dollar from one pocket and putting into another. 
 
“It’s not brand-new money that’s coming into existence, it's money that would have been spent elsewhere,” Baade explained. “Less money is being spent at [another neighborhood restaurant], because more is being spent on delivery pizza.”
 
Essentially, the Super Bowl’s positive economic effects can’t accurately be applied to an entire city, whether it be New York, Omaha, or Los Angeles, because the metrics used often measures activity that does occur, but fails to consider activity that doesn’t occur. 

More News from IBT MEDIA