(The Center Square) − Louisiana leaders this week touted numbers tied to the Super Bowl in New Orleans, claiming the game will yielded a $1.25 billion statewide economic impact, support nearly 10,000 jobs, and generated $82.7 million in state and local tax revenue. But at least one economist says those figures are misleading.
Victor Matheson, a sports economist at the College of Holy Cross in Worcester, Massachusetts, told The Center Square that the state’s claims about the economic impact of the Super Bowl seemed “wildly inflated.”
Matheson pointed to a trio of well-known distortions in economic impact studies: the substitution effect, crowding out and leakages.
Locals spending money on the Super Bowl aren’t adding new dollars to the economy; they’re just shifting spending they would’ve made elsewhere in town.
“If I buy a $10 beer at the Super Bowl instead of on Bourbon Street, that’s not new economic activity,” he said.
Matheson also says that big events can displace regular tourists.
“New Orleans is already full most weekends in February,” he said. “The Super Bowl may just push out visitors who would’ve come anyway.”
Lastly, not all spending stays local. High hotel prices largely benefit out-of-town corporate chains. NFL ticket sales flow back to league headquarters.
“Even though it looks like there’s economic activity that’s happening in New Orleans because of the Super Bowl, none of that’s actually accumulating in the pockets of New Orleans or Louisiana residents,” Matheson said. “It’s going back somewhere else.”
More concerning than the headline figures, Matheson said, is what’s missing: The costs of bringing the Super Bowl to town. Louisiana Economic Development Secretary Susan Bourgeois said the state spent $24 million, but did not know how much New Orleans spent.
“If you’re going to tout $1.25 billion in benefits, you’d better be transparent about how much was spent,” Matheson said. “How many millions in public subsidies, free police, discounted hotel blocks, free use of the Superdome —what did the NFL get at ‘no cost?'”
