Super bowl: Cash Cow or Curse?

When the Pro Bowl and Super Bowl perfecta comes into South Florida, its arrival will pit professional football’s best—and ignite anew a timeless debate: Is the investment in time and money worth the payback?

This game marks the tenth time the Super Bowl has been held in South Florida. Increasingly, the event has been something of a blessed lightning rod. Backers point to hundreds of millions of dollars infused into the local coffers via lodging, transportation, entertainment, food, beverage and catering for consumer and corporate events alike. Some tally the impact of this year’s games—the first time the Pro Bowl, on January 31, and the Super Bowl, on February 7 have been played in the same city—at nine figures.

In 2007, the last time the big game was held here, the figure was a $463 million infusion for the South Florida economy. Counter this hype with those who say South Florida in January and February hardly needs an event to fill hotels.

Either way, most admit the games’ impact can be wide reaching. Employment spikes as hoteliers, restaurants and rental car companies see customer demand grow. And local apparel, marketing specialty companies and other niche vendors see lofty—if temporary—rises in business.

“The value of the Pro Bowl and Super Bowl to the South Florida economy may start with the tourism industry, but go way beyond that,” says Scott Becher, principal with Sports & Sponsorships, a Boca Raton sports consultancy. “Opportunities like this are treasured by small companies that have big capabilities.”

As for heightened impact, some aren’t so sure. The Miami Dolphins get nothing, and stadium owners essentially “hand over the keys” to the league, says Mike Dee, CEO of Miami Dolphins and Dolphins Stadium (recently renamed Sun Life Stadium). “We’re not in it for the money,” he says. Ticket sales—at least for the Super Bowl—don’t amount to much, at least for the team (executives with the Dolphins and the NFL would not discuss the specifics of any compensation for the league’s use of the stadium).

The game already is “sold out,” though almost half of all tickets go to sponsors, league executives, media, and others close to the sport. The Pro Bowl, where more tickets are made available to fans, is anticipated as a strong draw for loyal enthusiasts eager to see the best of the best, including those intent to drive to see their home team players—unencumbered by the cost and distance of a necessary flight to the game’s former host, Hawaii.

Therein lies the real strength of having the Super Bowl and Pro Bowl in South Florida. A billion viewers worldwide watching South Florida, its bikini-clad tourists on sunbathed beaches, and fishermen in shorts and t-shirts. William Talbert, the CEO of the Greater Miami Convention and Visitors Bureau and key Super Bowl organizer, is non-plussed by projections of $400 million or more flooding the market. It’s the visible halo he wants—the eyeballs of the world.

Some 3,500 journalists from the U.S., Latin America, Europe and Asia are already credentialed for the event, and a recent travel section in The New York Times leading up to the games had a half-page article on South Beach. ESPN and other networks will broadcast from amid the neon glow of Ocean Drive in February. Local officials place great value on this free exposure to a global audience—outreach which admittedly far exceeds the local tourism bureaus’ own efforts. “Wherever they are, it’s cold there. It’s warm here. That’s priceless coverage,” Talbert says. “At the end of the day, it’s all about the buzz. I’ll take the games just for the media coverage.”

[CONSIDER THE NUMBERS]

To paraphrase a refrain born on Capitol Hill, a hundred million here, a hundred million there, pretty soon, you’re talking real money. For its part, the National Football League is bullish on the game’s impact on local markets. Super Bowl XLII in Arizona was thought to have generated a record $500.6 million in economic impact, including direct and indirect spending, surrounding the February 2008 game, according to findings from the W.P. Carey School of Business at Arizona State University.

Kathleen Davis is President and CEO of Sport Management Research Institute, the Florida-based research firm that tallies post-event figures for the South Florida Super Bowl Host Committee. Her four economic impact studies to date have shown strong financial infusions to the local market—including the $463 million shot in 2007 and a $204.5 million injection in 1995. Most of those revenue streams were infused into the local South Florida economic vicinity through hotels and lodging, food and beverages, concessions and general shopping. In 1999, Super Bowl XXXIII generated $239 million, she says.

Moreover, Davis says indirect spending—or money re-spent down the economic food chain, like when a contractor buys other goods or pays wages, and then those wage-earners spend their money—has a “time-released approach” whose impact may be felt 18 months to two years down the line. This touches contractors and sub-contractors across the region.

Miami-Dade County reportedly collected $1.3 million more in taxes in February 2007—the last time the game was held in South Florida—over the year prior. It might seem as a slight economic benefit to the county, except Miami-Dade pitched in $1.5 million to the host committee to help underwrite this year’s event.

With time spent on five Super Bowl committees, Rodney Barreto has heard the detractors. He’s heard how Tampa suffered lackluster results last year—taking in about $300 million in local impact—and how Americans still seem a little too tight-fisted to loosen up on the purse strings. Since their debut at a peak of $12 for Super Bowl I in 1967, tickets have risen to as much as $1,000 this year, holding steady compared to top-end ticket prices at last year’s event. For their part, advertisers seem unfazed. Broadcaster CBS as of late last year had already reported a near sell-out of its advertising inventory of 62 30-second TV spots, starting at $2.5 million.

“The economy still is a little shaky,” says Barreto, chairman of the South Florida Super Bowl Host Committee and a local business executive. “But every American city wishes they had a Pro Bowl and Super Bowl on their books.”

David Broughton, a research director with SportsBusiness Journal in Charlotte, North Carolina, is suspicious of economic impact numbers. The studies are sanctioned by local communities, chambers of commerce and even the NFL, and are conducted by local university professors. “Rare is the one that’s unbiased or flawless in methodology,” he says.

Broughton agrees that Miami in February is a stronger draw than Detroit or Indianapolis, but in a market where room occupancies already are flat—like cold weather cities—the jump could be 60 percent, versus less than 25 percent in South Florida.

Occupancies in Miami-Dade were already topping 80 percent in the first weeks of January, up from 77 percent a year before, according to Smith Travel Research, a hotel and lodging research firm. In Broward County, occupancy was running at 81 percent, up from 77 percent.