say such things
Posted on May 30, 2018
<http://www.fieldofschemes.com/2018/05/30/13814/minnesota-made-a-squillion-dollars-from-super-bowl-lii-say-people-paid-to-say-such-things/>
by
Neil deMause <http://www.fieldofschemes.com/author/neild/>
If you were running a business, how would you figure out how much money you
made at the end of the year? You could do an estimate of how many customers
entered your store each day, estimate how much you think they spent on
average, subtract a theoretical number for your costs per item sold, and
call that your best guess. Or you could, you know, actually look at how
much cash you have at the end of each day, and count.
The latter method is how economists prefer to calculate the impact of
sporting events: Add up the tax revenues during the big game or games, and
compare it to tax revenues during a normal month. If youâre an economic
impact consultant whoâs paid more to come up with big numbers than accurate
numbers, though, itâs often better to use the former method, since thereâs
a lot more wiggle room for truthiness.
Which brings us to yesterdayâs headlines that hosting Super Bowl LII
brought in $370 million in new economic activity for the state of Minnesota
<http://www.startribune.com/super-bowl-lii-adds-up-to-370m-for-minnesota-report-says/483949311/>
:
That was the net new spending from the 10-day event Jan. 26-Feb. 4,
according to an economic impact report released Tuesday by Gov. Mark Dayton.
The results, which are in dispute, came in $50 million over pre-event
projections
<http://www.startribune.com/minnesota-super-bowl-host-committee-to-release-results-of-economic-impact-study/375414861/>
by Rockport Analytics made years in advance. Rockport, based in
Pennsylvania, also wrote the final report.
If youâve been reading this site for a while, youâve probably already
spotted the first problem, which is that this is economic *activity*, not
economic *benefits*. So part of that money includes $179 million in
spending by the NFLâs broadcast partners, much of which likely went
directly into the pockets of the NFL, never actually touching the Minnesota
economy. As far as actual tax revenue goes, the report estimated $32
million in new receipts.
That number, though, was goosed by including increased property tax
receipts, I guess on the grounds that hotels are worth more when they can
sell Super Bowl stays once every couple of decades?
And then we have our old friend the substitution effect, where one has to
account for any money that would have been spent locally anyway, either
because it was spent by locals whoâd be in town regardless, or because
Super Bowl tourists displaced other tourists (and locals) who steered clear
of town because they didnât want the hassle of dealing with football fans.
The study trimmed about 18% from its projected economic activity for
substitution, a number that it arrived at thusly
<https://www.mprnews.org/story/2018/05/29/was-super-bowl-super-economic-analysis>
:
âThe average visitor spent $608 per person per day,â said Ken McGill with
Rockport Analytics, a consulting company that looks at the economics of big
events and wrote the report on the 2018 Super Bowl. âWe interviewed, and we
literally intercepted visitors ⌠and asked them where they were from, what
they were spending in certain categories and whether theyâd come back.â
This, needless to say, is not rigorous science, since people are terrible
reporters of their own spending activities. And, on top of that, Rockport
wasnât able to intercept anyone who would have been in town if not for the
Super Bowl, since they were off doing something else.
Fortunately, Minneapolisâs chief financial officer is calculating the
actual changes to city tax revenues during the Super Bowl, and will present
those numbers to the city council in June. While we wait, maybe we can pass
the time by seeing how things went the last time tax officials fact-checked
an economic consultantsâ claims:
Minneapolis All-Star Game impact overstated by 27-72%, says state revenue
department
It is very, very rare for a public agency to take a look at the actual
impacts of a major sporting event after the fact, as opposed to just
throwing around crazy numbers beforehand. So props to the Minnesota
Department ⌠Continue reading Minneapolis All-Star Game impact overstated
by 27-72%, says state revenue department
<http://www.fieldofschemes.com/2014/11/12/8096/minneapolis-all-star-game-impact-overstated-by-27-72-says-state-revenue-department/>
Field of Schemes <http://www.fieldofschemes.com/>
Thanks to Neil deMause for his years of fine reporting on the sports
stadium scene in the United States and abroad on his website
fieldofschemes.com
The sad part of this situation is that even if Minneapolis were to have
profited greatly from this extravaganza, the taxpayers will see no benefit
from it. The uber rich will be on to the next shiny object, their chief joy
in making piles of money without actually doing any honest work. The work
part is, as always, left to the taxpayers, who also pay way more taxes
proportionately than the rich.
Janet Nye
Phillips
Minneapolis All-Star Game impact overstated by 27-72%, says state revenue
department
<http://www.fieldofschemes.com/2014/11/12/8096/minneapolis-all-star-game-impact-overstated-by-27-72-says-state-revenue-department/>