Coyote Blog

Huge alarm bells are going off as I read this headline in the Arizona Republic, whose motto should be "Happy to credulously print any crazy number your lobbying group puts in a press release."  In this case, the headline reads:

Ariz. economy reaped $500M from Super Bowl

Uh, sure.  Right.  Bet that is a quality number.  Lets first vet the source.  Who provided the paper with this number?

A study released today by the Arizona Super Bowl Host Committee
estimates professional football's championship game at University of
Phoenix Stadium in Glendale generated an economic impact of $500.6
million for the state.

Oh, I see.  Certainly a disinterested party.  And how was this number arrived at?

Arizona State University's W.P. Carey School of Business
completed the economic-impact report based on surveys of more than
1,500 visitors who came to the Valley to attend the game or take part
in festivities.

The survey revealed that visitors stayed in Arizona for an average of
3.9 nights and spent an average of $617 each day on hotels, food,
alcohol, transportation, recreation, shopping and other categories. The
report also calculated the amount that organizations dropped during
Super Bowl week.

Well, its good to see the business school at America's #1 party college on the case.  I would have thought this would be a very challenging study to conduct.  In my naiveté, I might have assumed that these Superbowl visitors might have displaced other potential visitors who would have been there anyway.  I would have fixated on the fact that Superbowl week is also Phoenix Open week and, given the beautiful winter weather here, one of the prime tourist weeks of the year even without the Superbowl.  I might have wondered how hotel stays during a week when most local resort hotels are full anyway could have been credited to the Superbowl, particularly when many locals left town to avoid the scene.   I might have been worried that I was not counting truly incremental revenues, but the folks in the business school at the university with Americas hottest coeds must be smarter than I am.

So apparently, these geniuses have found a way to assume that 100% of this $617 per day times 3.9 days is incremental and that there is no substitution effect.  However, they have also managed to somehow assume that University of Phoenix Stadium is even larger than I thought.  Because using these numbers, the only way to get to $500 million is if there were nearly 210,000 visitors.  Wow.  This does not even include the thousands of us from Phoenix who were also in the stadium. 

Look, the way to do this study is simple.  You look at sales tax receipts in Maricopa county over the period of January 2007-February 2008.  You calculate an underlying growth rate.  Then you compare the sales tax receipts for the Superbowl months (Jan-Feb 2008) with the same months a year previously, and see how much growth there is, if any, above the underlying growth rate.  I will tell you the answer right now:  It ain't anywhere close to $500 million.  I will eat my hat if its over $50 million.

Here is a reality check:  In 2004 the entire retail trade, from restaurants to stores to hotels, was $16.4 billion for all of Arizona.  This is $315 million per week.  Basically the study is saying that the entire retail trade for the whole state of Arizona was more than doubled in Superbowl week. 

Bullshit.

From a reader comes this story of Arizona looking to the public trough to get funds to lure another SuperBowl.  I can say from experience now that Superbowl week is made up mostly of private corporate and celebrity parties that the unwashed locals like myself are either a) not allowed to attend at all or b) can attend only by ponying up $1000 or more.  Not being resentful or a leftist, I couldn't really care less about the parties being near by.  However, my opinion changes real fast if my tax dollars are required to pay for them:

Super Bowl organizers will try to nail down another big game for Arizona, possibly as early as 2012.

But for the state to stay competitive, taxpayers need to shoulder the
majority of game costs, organizers say. And the organizers plan to
lobby for legislation to accomplish that.

The weeklong celebration culminating with Sunday's Super Bowl XLII cost
the local Host Committee about $17 million. The private sector,
including such big contributors as the Fort McDowell Yavapai Nation and
the Thunderbirds, bankrolled more than 80 percent, while state and
local agencies chipped in the balance.

But with a slumping economy making fundraising a challenge, the Arizona
Super Bowl Host Committee, the Arizona Cardinals organization and
Valley business leaders want see that ratio reversed, with public
dollars financing the bulk of the effort.

Don't you love the last sentence?  An exactly equivalent way to state this is "people have other priorities for their own money and refuse to give it up voluntarily, particularly in difficult economic times, so we need the state to take it by force."

No one yet knows how much this year's Super Bowl will fatten state
coffers, though organizers project the game created more than $400
million in spending. An economic-impact study won't be out for at least
a couple of months.

Bullshit.  Every major economic study not conducted by the management of a professional sports team has shown nearly zero impact from such events.  Here is the Seattle NBA team admitting they have no economic impact.  Here is yet another economic study to the same effect.

Here is my challenge:  Take the Phoenix-area GDP for this Jan-Feb, take out the growth trend line (which can be found in year-over-year comparisons of previous months) and then compare it to the GDP for Jan-Feb 2007.  I bet you whatever you care to bet you cannot find an additional $400 million.