This story was updated on Feb. 8, 2022, at 5:32 p.m.
The Cincinnati Bengals and Los Angeles Rams are getting ready to face off in the 2022 Super Bowl at SoFi Stadium in LA, and local businesses in the city, especially restaurants, are stocking up to prepare.
Los Angeles is no stranger to hosting the NFL's biggest game of the year: Super Bowl LVI will be the seventh in city history.
When was the last Super Bowl in Los Angeles?
The last time the Super Bowl was played in LA was Super Bowl XXVII in 1993. The Dallas Cowboys, led by quarterback and game MVP Troy Aikman, trounced the Buffalo Bills 52-17 in a game at the Rose Bowl.
How the Super Bowl impacts the local economy
Any time a city hosts a big event that's broadcast around the world, you hear claims of an impact on the local economy. And when it comes to misleading economic claims, there’s no bigger offender than the Super Bowl.
In fact, you could call it “the Super Bowl of bad math,” since nearly every economist and data scientist seems to agree the economic impact claims made by the NFL and sports-loving politicians fall short. (The L.A. mayor's office did not respond to NBCLX questions regarding game-day economy.)
Here are just three of the ways taxpayers get misled:
Inflated tourist spending
In order to justify spending tens – or hundreds – of millions of tax dollars on sports events and sports stadiums, teams and leagues often cite the benefits their games bring to a community.
But the economic impact claims are typically attributed to marketing professionals, who often inflate how much a ticket-holder spends attending a game.
Sometimes, economic impact reports double- or triple-count a single tourist, while others overlook the fact that not every ticket-holder is staying in local hotels and eating all of his/her meals out at restaurants.
Leagues and teams also don’t typically mention that a lot of big-game spending leaves the host community, due to what economists call “leakage.” When a hotel, restaurant, or sports franchise is owned by a corporation that’s based elsewhere, much of that tourist spending winds up benefitting those other communities.
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Holy Cross economist Victor Matheson has long advocated politicians take any economic impact figure provided by a team, league, or business seeking tax dollars, and move the decimal place one digit to the left to get a more appropriate estimate of actual economic benefit.
Taking credit for economic impact that would've happened anyway
Economic impact reports, compiled by marketing professionals on behalf of sports teams and leagues, aren’t afraid to take credit for tourism that likely would have happened anyway, such as northerners visiting Florida in the winter.
While the Super Bowl undoubtedly draws wealthy fans to host cities such as Tampa, Miami and Phoenix each February, most warm-weather cities are already enjoying high hotel occupancy and room rates in the middle of winter. And when big crowds come to town, it often displaces visitors and spending that would have taken place in a normal year.
Big events create winners, but also losers
Sports leagues don’t like to acknowledge that championship games – and even some regular-season games – cause massive disruptions to a community that can hurt just as many businesses as they help.
Locals often spend less than normal, choosing to watch the event from home or take part in free events associated with the big game. And when heavy security is involved, as is typical for championship games or political events, regulars tend to avoid entire neighborhoods altogether, leaving many establishments empty.
When studies have looked at the overall spending following a big event – or even a baseball season without baseball – they have often found the games make little to no difference in regional spending.
The Los Angeles Sports & Entertainment Commission, which produced Super Bowl LVI’s economic impact report, sent NBCLX a statement from the Super Bowl Host Committee, which read in part: “For the L.A. region, the event is attracting thousands of out-of-town visitors to local hotels, restaurants, entertainment venues and retail businesses ... but we evaluate the economic impact not just in numbers, but how the event and the events leading up to it empower business owners, their employees, and non-profit organizations serving a diverse population throughout the region.”