Economy

The Massive Cost Of Hosting A Super Bowl, By The Numbers

CREDIT: AP

Rosy projections about the economic benefits of hosting the Super Bowl obscure the painful reality that Glendale, AZ's quest to become a sports mecca has inflicted on its people.

When Tom Brady and Richard Sherman square off in Super Bowl XLIX on Sunday in Glendale, AZ, the city of 230,000 will be in the home stretch of its week-long hosting duties. But the huge expenses of becoming a magnet for big events in sports will linger.

It is the second time Glendale has hosted the NFL’s championship circus, and the city is deep in debt thanks to its effort to become a professional athletics hub. Multiple layers of complex financing arrangements around three separate sports spaces in town have starved the suburb of resources it needs to provide services to its people, and this week’s festivities will worsen Glendale’s problems. Being vocal about what his town is paying for its hosting privileges may have cost Mayor Jerry Weiers a chance to even watch the game in person.

Weiers’ reservations make plenty of sense when you look at Glendale’s sporting pursuits through the perspective of the city’s dire economic straits. Here are six numbers that take some air out of the rosy economic projections used to justify the game.

125 homeless people — Glendale’s homeless population was estimated to be 125 last January. One study in Florida has estimated that it would cost about $10,000 per year to provide permanent housing and services to a homeless person. That means the $2 or $3 million Glendale is spending on Super Bowl security alone could more than cover the $1.25 million cost of ending its homelessness problem for a year.

$40.5 million — Even if the state or the league were to reimburse Glendale’s security costs — which they won’t — that money wouldn’t necessarily be freed up for social services. That’s because Glendale spends a combined $40.5 million each year on debt, upkeep, and leases related to its two other, non-football stadiums. The first and most expensive of these is the Phoenix Coyotes hockey arena, a desert ice palace that has driven Glendale deep into debt and forced significant cuts to public services in the Phoenix suburb. The second is a spring training baseball park for the Chicago White Sox and the Los Angeles Dodgers. A state agency currently pays the equivalent annual costs for the football stadium, but a legal battle is threatening to derail the state tourism tax levy that supports that arrangement. If the state loses that case, Glendale could eventually be on the hook for another $12 million in annual stadium costs. Even as the Arizona Sports and Tourism Authority waits for the fallout from that case, it’s paying the NFL $4 million to refund sales taxes tied to Super Bowl tickets.

70 percent — Glendale’s stadium spending each year could cover seven out of every 10 dollars that Arizona as a whole spent administering food stamps to nearly 477,000 households. The benefits themselves are federally funded, but states split the administrative tab with the federal government. Arizona’s share of those costs was $58 million in 2013. It’s easy to get lost in abstractions around the stadium’s impact on Glendale’s municipal finances, but this comparison makes it concrete: for what the city is spending, Arizona could provide food assistance to 333,000 low-income households a year.

1 in 5 city workers — Glendale officials estimate the city has cut its public workforce by 20 percent since the recession. Prior to the housing market crash, Glendale’s debt-financed stadiums had kept more-or-less afloat. But when the downturn pummeled the Arizona suburbs, a series of financial arrangements that had just about worked in good times became untenable — and inescapable. Unable to extricate itself from the stadium deals or win sufficient concessions from the relevant teams and leagues, Glendale had to cut where it could. In 2012, the City Council simultaneously cut 49 public service jobs and approved a lease agreement to pay any future owner of the struggling Coyotes hockey franchise a cool $15 million annually. The city threatened to close public facilities and cut another 250 employees, including first responders, if voters didn’t approve a sales tax hike intended to help fill in the city’s budget hole.

3.7 billion taxpayer dollars — The online for-profit education company University of Phoenix paid $155 million to put its name on Glendale’s football stadium in 2006. In 2012 alone, the company pulled in $3.7 billion from taxpayers. Sunday’s Super Bowl might draw scrutiny back to the for-profit college sector thanks to the branding of the building. The naming rights cost the University of Phoenix about double what the company paid to settle a whistleblower lawsuit over its deceptive recruiter practices, but just pennies compared to the billions that companies like it spend marketing for-profit college degrees more directly each year.

$1.6 million — That’s what Glendale lost, on net, from hosting the 2008 Super Bowl. Despite boosters’ claims that the game brings huge economic benefits, the city’s last experience as a championship town confirms what actual economists say about these deals. “With these mega-events, yeah, you’ll have people coming, staying at hotels, going to bars and restaurants,” Minnesota State University-Mankato economics professor Phil Miller told ThinkProgress’ Travis Waldron. “But then they go, and, OK, show’s over. It doesn’t leave behind much of a lasting impact. And it’s a very narrow impact.”