Peter Corbett and Caitlin McGlade

The Republic | azcentral.com

The 2008 Super Bowl generated an estimated %24500 million for the Arizona economy%2C according to a study from the host committee%2C but economists question whether the impact is any where near that high.

Economic impact studies of major sporting events typically do not account for visitors displaced by the megaevents%2C critics say.

Arizona's last Super Bowl in 2008 brought global attention and a stadium full of big-spending visitors to the Valley, but some economists say the return on investment for mega-events like a Super Bowl is not as massive as boosters say.

Proponents touted the 2008 game as a half-billion-dollar windfall that lifted the local economy just as the Great Recession was setting in.

"That's why other cities compete so hard to host the Super Bowl," Arizona Cardinals President Michael Bidwill said of the economic benefits of hosting the event.

Local civic leaders hope for an even bigger payday when the Super Bowl returns to Glendale's University of Phoenix Stadium on Feb. 1 with a bonus of the Pro Bowl all-star game played there a week earlier.

But quantifying the Super Bowl's true economic impact is difficult.

A study paid for by the Arizona Super Bowl Host Committee determined a $500.6 million impact from the 2008 Super Bowl.

However, one sports business economist put that figure closer to $50 million.

And an Arizona Republic analysis of key economic indicators showed mixed results surrounding the last big game: hotel, restaurants and bar revenue was generally up, but airport passenger traffic stayed flat and retail sales were low.

The numbers have limitations: The figures do not pinpoint all of the economic activity directly or indirectly related to the Super Bowl. They do not account for visitors displaced by the big game. And they do not include the tens of millions of dollars local corporations and cities spent preparing for and producing the event.

"You need to consider the explicit costs and what else a city could be doing with the money it spends on the Super Bowl," said Robert Baade, of Lake Forest College, north of Chicago. "The litmus test from an economist's point of view is: Do we get the highest return on our investment? And the answer is no."

On the flip side, the figures don't take into account what kind of exposure the state gets, which could lead to future dollars, Arizona State University professors have said.

Fans spend on partying

Bidwill and other local leaders cite a 2008 economic report as evidence that mega-events like the Super Bowl generate substantial revenue for the state's economy.

The W.P. Carey School of Business at Arizona State University conducted the study, which estimated that Super Bowl events attracted 91,200 visitors to the Valley. More than two-thirds of them had game tickets.

Overall visitor spending, determined by surveying fans and those without game tickets, was pegged at $218 million. The NFL and its teams accounted for another $96.5 million in spending, according to the study.

Researchers used a multiplier formula to estimate the ripple effect of that spending on the local economy. That pushed the estimated economic impact to $500.6 million.

The study, paid for by the 2008 Super Bowl host committee, was conducted by an ASU research team of marketing experts and an economics professor.

Michael Mokwa, one of the ASU marketing professors on the team, said the Valley does lose some prime winter-season visitors during the Super Bowl, but the many upscale Super Bowl activities generate far more revenue.

He cited other intangible benefits from hosting the Super Bowl. Chief among them are media exposure for Arizona tourism and economic-development opportunities with visiting executives, he said.

"It's really important in what we do to enhance the image of our state," Mokwa said.

Economic bump overstated

Some economists who study major sporting events say the economic boost of a Super Bowl to host cities is greatly exaggerated.

"The apologists for the event produce generous estimates on the economic impact because they want the public to support it," Baade said.

Some economists challenge how much revenue flows into local cash registers and tax coffers and how much flows to out-of-state corporations.

Plus, state and local authorities don't collect taxes on game tickets because the NFL is a non-profit entity. The NFL is also exempt from paying for building permits and other fees.

"They're extracting every dollar out of this event," said Victor Matheson, an economist at the College of Holy Cross in Worcester, Mass.

Matheson and Baade, who together have studied major sporting events, said the rosy economic studies do not account for displaced visitors.

Matheson estimated the economic bump of the 2008 Super Bowl was closer to $50 million, not $500 million, when factoring in the lost spending from potential tourists who stayed away.

Football tourists simply replaced conventioneers and snowbirds who would otherwise lay their heads in beds at the Valley's resorts, he said.

"It's not something you should turn down," Matheson said of the Super Bowl. "But picking up that bump (in the economy) is like looking for a needle in a haystack."

He said game-related spending gets lost in large economies like Phoenix's, which was $187 billion in 2008.

Countywide, spending at hotels, bars and restaurants noticeably spiked during February 2008, but so many factors influence the economy that it is difficult to peg the sole source to the Super Bowl.

Economic results mixed

Some sectors of the Valley economy saw an increase in spending during January and February 2008.

Hotel, bar and restaurant sales were up by more than $41.6 million compared with the previous year.

However, retail sales dipped by $538.6 million compared with 2007 — but that continued to tank by $806.5 million the following year as the recession gripped the market.

Hotel-performance metrics over a two-week period spanning the 2008 Super Bowl revealed a surge of occupancy and rates on the game weekend. But room occupancy and revenue per available room or RevPar declined before and after Super Bowl week. RevPar is a measure of both occupancy and rates to get a bottom-line figure for hotels.

Hotel occupancy peaked at 85.6 percent of the Valley's 53,000 rooms on Saturday, the eve of the 2008 Super Bowl. Average room rates topped out at $313, according to figures from STR, formerly Smith Travel Research.

Local authorities must raise millions

Attracting a Super Bowl means big spending from both Valley cities and the private sector.

The Arizona Super Bowl Host Committee must raise $30 million. City tax dollars help pay the bill.

Paradise Valley Mayor Scott LeMarr said his town felt pressured to contribute $75,000 to the host committee.

"We don't need the Super Bowl to sell our rooms at that time of year," he said of Paradise Valley's exclusive resorts.

Neighboring Scottsdale gave $645,840 to the host committee and plans to spend another $475,000 for ESPN Fan Fest with an outdoor broadcasting stage set at Scottsdale Fashion Square.

Other host-committee contributions from local tourism bureaus include $1.4 million from Phoenix, $221,700 from Tempe and $138,000 from Mesa.

Those contributions do not cover public-safety costs, which could total an estimated $400,000 for Scottsdale, $1 million for Phoenix and $2 million for Glendale.

Glendale tried to convince the Arizona Legislature to help cover its costs, to no avail.

"We want to make sure we fulfill our obligation, but we don't want to burden our citizens with the costs," Mayor Jerry Weiers said.

But Maricopa County taxpayers already have footed the largest bill for attracting mega-events like the Super Bowl: Voters approved Proposition 302 in 2000, which funded the construction of the $455 million University of Phoenix Stadium for the Cardinals, Fiesta Bowl, concerts and other events.

Some cities score more dollars

The cities haven't contributed equally, nor do they reap the rewards equally.

Downtown Phoenix has more to gain this year than it did in 2008. It is hosting a massive block party known as Super Bowl Central and a fan event called the NFL Experience that Glendale hosted in 2008.

Thousands of journalists and NFL executives will stay in a block of 20,000 hotel rooms.

Phoenix has more hotel space than it had in 2008, an expanded convention center, light-rail service and a range of new restaurants and bars.

The Super Bowl events will help bolster Phoenix's image as the center for mega-events in years to come, said John Chan, Convention Center director.

If 2008's success is an indicator, Scottsdale also will see a bump in hotel stays. With about 12,000 hotel rooms, the city exceeded the overall hotel-market performance by at least 10 points during the last Super Bowl, according to STR's hotel data.

Occupancy was at 94 percent for five nights surrounding the big game, with average daily rates at $410.

Glendale, meanwhile, only got a fraction of the hotel revenue since it only had eight hotels and about 950 rooms in 2008.

That has grown to 12 hotels and nearly 1,400 rooms for the 2015 game.

David Rousseau, host committee chairman and president of Salt River Project, said the committee is "incredibly appreciative of the response and reception we've gotten from the business community and cities" in supporting the Super Bowl.

The event is about more than sports, he said.

"It doesn't matter if you follow football," Rousseau said. "People stop what they're doing to watch the game. It's like America's campfire, and we get to be right in the center of it."

The Arizona Super Bowl Host Committee board includes John Zidich, publisher of The Arizona Republic and Republic Media CEO.