Business & Economy

Will the Super Bowl really be an economic winner for LA?

NFL Commissioner Roger Goodell announced Tuesday afternoon that Los Angeles will host Super Bowl LV in 2021, the area's first Super Bowl since 1993.
NFL Commissioner Roger Goodell announced Tuesday afternoon that Los Angeles will host Super Bowl LV in 2021, the area's first Super Bowl since 1993.
File photo by Nick Laham/Getty Images

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NFL Commissioner Roger Goodell announced Tuesday afternoon that Los Angeles will host Super Bowl LV in 2021, the area's first Super Bowl since 1993.

Los Angeles Mayor Eric Garcetti sent out a statement immediately after the announcement, promising that the event, which will be held at the Rams soon-to-be-built stadium in Inglewood, will be an economic boost for the area.

"L.A. is already welcoming a record number of visitors from around the world, and Super Bowl LV will bring even more economic prosperity to our region, attracting tens of thousands of people to our city and generating hundreds of millions of dollars for local hotels, restaurants, shops and other businesses," Garcetti said.

However, the true economic impact will likely be between zero and forty million dollars, according to Andrew Zimbalist, a sports economist at Smith College and the author of "Circus Maximus: The Economic Gamble Behind Hosting the Olympics and World Cup."

“I like Mayor Eric Garcetti, but I think he needs to consult with some independent people who have looked into this,” said Zimbalist.

He explained that when projecting a Super Bowl's economic impact, it is important to consider – and subtract – the typical amount of tourist spending, which would have happened that same weekend if the game wasn't taking place.

“What you tend to find is that Super Bowl tourists displace normal tourists,” said Zimbalist.

He said the displacement effect is especially true of cities with warm weather, where Super Bowls tend to be played; a lot of tourists visit Southern California during February, but during Super Bowl weekend, they would likely take their dollars somewhere else since hotel rooms will be full. 

By contrast, Zimbalist said, northern cities that don't see a lot of tourists in the winter like Indianapolis get more of an economic benefit from hosting a Super Bowl, though that city still lost about a million dollars when it hosted the big game in 2012.

There is also the cost to cities for providing services. A recent report from San Francisco's City Controller found the city spent twice as much as it expected during this year's Super Bowl in Santa Clara. However, the report also said the city took in $11.6 million in revenue, so it ended up with a $2 million surplus.

The analysis has been controversial though, with some local leaders claiming that certain costs were left out, such as the cost to speed up infrastructure projects.

“If you read the fine print, the city didn’t make $1.9 million," San Francisco Supervisor Aaron Peskin told the San Francisco Examiner. "It arguably barely broke even or lost money."

According to the Los Angeles Rams, the bid committee, chaired by sports agent Casey Wasserman, will be responsible for raising enough money to offset city costs for Super Bowl LV. The Rams also say the Super Bowl will book 60,000 nights at local hotels, with the possibility of up to 100,000.