Pre-Event Estimate of the
Economic Impact of Super
Bowl LII on Minneapolis-St.
Paul
Net Contribution to Jobs, GDP, Wages, & Tax Receipts
Prepared for:
Minneapolis Super Bowl Host Committee
April 2016
Kenneth McGill Managing Director, Rockport Analytics
Chief Economist, Global Business Travel Association (GBTA)
+1 (610) 213-2558
Copyright © 2015 Rockport Analytics, LLC. All Rights Reserved. 2
Agenda
• Super Bowl Economic Impact: Caught Between a
Rock and Hard Place
• How Will SBLII Benefit the MSP Economy?
• SBLII Economic & Fiscal Impacts
• Super Bowl LII Impact in Perspective
• About Rockport Analytics
Copyright © 2015 Rockport Analytics, LLC. All Rights Reserved.
Increasingly, sponsors, partners, citizens, businesses, &
government authorities ask the question, “is it worth it?”
• What are total hosting costs? Operations? Capital? Displacement?
• How will these funds be raised? Private or public?
• And how will local businesses, citizens, and governments benefit?
• Are there ongoing benefit streams created or is it once and done?
3
Estimating SB Impact:
Caught Between a Rock & Hard Place
Meanwhile, past estimates have been criticized as extremely
overinflated, inaccurate, even purposely misrepresented…
• Gross SB spending is interchanged with economic impact
• Resident spending, game ticket sales, air transportation are included
• Displaced regular tourism spending is not subtracted
• NFL and other organization exemptions are not subtracted
• “Softer” benefits are questionably quantified and included –e.g.
unearned media, halo effects on future meeting bookings, city brand
• Inappropriate and inflated “multipliers” are used to translate spending
into jobs, paid wages, tax receipts, and contributions to local GDP
Copyright © 2015 Rockport Analytics, LLC. All Rights Reserved. 4
SB Economic Impact & ROI Under Fire
Miami
New Orleans
Tampa
Pasadena
Atlanta
Miami
Tempe
New
San Diego
Miami
Atlanta
Tampa
New Orleans
San Diego
Houston
Jacksonville
Detroit
Miami
Phoenix
Miami
Dallas
Indianapolis
New Orleans
New York
Phoenix
$150
$250
$350
$450
$550
$650
$750
1988 1993 1998 2003 2008 2013 2018
in m
illio
ns
of
$ o
f To
tal E
con
om
ic Im
pac
t (G
DP
)
Super Bowl Economic Impact 1989-2015
Source: University of New Orleans, Coates and Humphreys, UCLA/LA Sports Council, Price waterhouse Coopers, Depken and Wilson, Rishe, Greater Miami Convention and Visitors Bureau, San Diego Citizen’s Task Force, Rockport Analytics Houston SBLI and Minneapolis SBLII are pre-event estimates. Source: Rockport Analytics
“The Super Bowl's economic impact: Super-hype? “ CBS Moneywatch, January 2015
“Is Hosting the Super Bowl Worth It?” U.S. New & World Report, Jan 2016
“Your City Will Never Get Rich Hosting the Super Bowl”, Mother Jones, February 2016
“Super Bowl host cities always lose the money game”, MarketWatch, February 2016
“The NFL’s Super Bowl Con: Hosting the Big Game Isn’t an Economic Score For Cities”, Daily Beast, Jan 2014
…
Copyright © 2015 Rockport Analytics, LLC. All Rights Reserved.
• Purposely conservative (If in doubt, leave it out…) : Only non-resident local
spending, local operations, broadcast, advertising, and T&E spending. Avoid
double counting and outside reimbursed costs/ spending
• Use actual spending rather than budgeted estimates wherever possible
• Triangulate: always sanity check “demand” side estimates with supply side
capacity figures (e.g. # hotel rooms, rental car inventory, air lift, etc.)
• Check estimates against published benchmarks (e.g. S&L tax collections)
• Treat softer benefits such as media exposure, halo effects as “below the line
items”. Calculate it, yes, but leave it out of the headline numbers
• Displaced Tourism: Estimate the normal level of tourism activity (leisure &
business) for the late-Jan/early-Feb period, assume 100% displacement, and
subtract it from the “gross” impact
• Highlight strengths & weaknesses in data sources, models, methodology
early/often and upfront - no appendix burials.
• No black boxes: all data, model solutions, and interim work product belong to
the Host Committee. Results should be easily replicated by others
5
Use an Approach That Stands Up to
Scrutiny
Copyright © 2015 Rockport Analytics, LLC. All Rights Reserved. 6
Super Bowl LII –February 2018
How Will SBLII Benefit
the MSP Economy?
Copyright © 2015 Rockport Analytics, LLC. All Rights Reserved. 7
SBLII Economic Impact Approach
1. Estimate SBLII-initiated game attendee/visitor spending
2. Gather/estimate SBLII MSP game, event & broadcast operations spending
3. Translate incremental spending into economic impact for MSP & MN
4. Calculate SBLII-initiated state & local taxes
5. Estimate displaced tourism impact & subtract it from gross SBLII impact
6. Derive and monetize “softer” benefits of SBLII –value of media, convention/meetings lift, return visitation, etc.
Copyright © 2015 Rockport Analytics, LLC. All Rights Reserved. 8
Pre-Event Economic Impact of SB LII:
Executive Summary Super Bowl LII Bottom Line
For the Minneapolis-St. Paul
MSA: in millions of $ unless otherwise noted
SB LII Net*
Incremental
Contribution
Total SB LII-initiated Spending $338.4
Total Economic Impact:
Contribution to MSP GDP $342.6
Jobs Supported (# FTEs) 5,000
Wages Paid $241.5
Total Tax Receipts $95.4 Net Federal $51.3 Net State & Local $28.7
Source: Rockport Analytics FTEs=Full Time Equivalents
* After removing displaced tourism typical for 10-day period in late
January-early February
• Super Bowl LII will bring an estimated $407
million in new spending to the MSP metro area.
This will come from both the local travel spending of
125,000 expected visitors and an estimated $122
million of local game/event operations
expenditures. About $68 million in regular tourism
activity will be displaced by the event, however,
resulting in net incremental spending of $338 million.
• Given the direct, upstream, and downstream impacts
of that spending, MSP will realize a net new
contribution to the regional economy of $343
million, during which over 5,000 jobs will be
supported at an array of local businesses paying
wages of $242 million.
• SB LII-initiated state & local tax receipts will result
in an estimated net windfall of over $29 million for
state and MSP municipal governments.
Copyright © 2015 Rockport Analytics, LLC. All Rights Reserved. 9
Super Bowl-Initiated Spending Will Be
Substantial
Super Bowl LII Will Bring Substantial New
Spending to Minnesota in millions of $ %
Game Attendee/Visitor $284.9 70%
Events Operations $ 13.5 3%
Game, Broadcast Operations
and Promotion $ 102.3 25%
Other $ 6.0 1%
Total SB LII-Initiated Spending $ 406.6 100%
Non-Resident Visitor
Spending
Super Bowl LII
Spending (in thousands)
Retail & Shopping $63,854
Hotel $70,954
Food & Beverage $62,833
Rental Car & Commercial Vehicle $28,130
Entertainment $26,908
Other Ground Transportation $15,470
Other –e.g. travel arrangement,
laundry, other personal services $16,735
Total Attendee/Visitor Spending $284,884
• An estimated 125,400 non-resident visitors
will come to Minnesota for SB LII
• About 48% will stay overnight for slightly over 4
nights generating over 230,000 room nights at
area hotels
• SB LII visitors will spend an average of about
$620 per day in the MSP metro area. Typical
MSP tourism spending averages slightly over
$118/day
Retail & Shopping
22%
Hotel 25%
Food & Beverage
22%
Rental Car 6%
Entertainment 10%
Ground Transportation (ex Rental Car)
5%
Other 6%
Game Attendee / Non-Resident Visitor Spending
$285 million
Copyright © 2015 Rockport Analytics, LLC. All Rights Reserved. 10
SB LII’s Gross Economic Impact
Impact on MSP
Businesses
Value to MSP Economy
Total Super Bowl LII
Spending
Total Expenditures
$407 million
Economic Impact
$404 million
Direct Impact
$206 million
Indirect & Induced Impact
$198 million
Jobs Supported
6,000 FTEs
Industries providing goods and services to front-line businesses
e.g Food Distribution
Industries directly providing goods and services to MSP
visitors e.g. Restaurants
Copyright © 2015 Rockport Analytics, LLC. All Rights Reserved. 11
SB LII Will Be a Seminal Tourism Event
Super Bowl LII Economic Impact Metric
Direct Indirect (Supply Chain)
Induced (Income)
Total
Total Spending (in thous $) - - - $ 406,643
Value-Added (GDP) (in thous $) $ 206,230 $ 88,519 $ 108,945 $ 403,694 Wages (in thous $) $ 152,142 $ 58,898 $ 52,148 $ 280,561 Jobs (# Full Time Equivalents) 3,800 900 1,300 6,000 Tax Receipts (in thous $) $ 113,188 Federal Taxes $ 60,401 State Taxes $ 33,045 Local Taxes $ 19,742
• Direct Impact –accrues to those MSP businesses that directly serve SB LII game
attendees, visitors, and out-of-town staff; plus businesses directly involved with
hosting the game and its many related events.
• Indirect Impact –benefit to the many local upstream businesses that populate the
supply chain of SB LII direct businesses
• Induced Impact –both direct and supply chain businesses pay wages to their
workers. Much of these local wages will be spent in the MSP area at business that
provide a broad range of consumer goods and services.
2018 SB LII Gross Economic Impact Summary
Copyright © 2015 Rockport Analytics, LLC. All Rights Reserved. 12
SB LII Bottom Line for MSP & Minnesota
Super Bowl LII Bottom Line
For the Minneapolis-St. Paul
MSA:
in millions of $ unless otherwise noted
Super Bowl
LII Gross
Contribution
Displaced
Tourism
Offset
Super Bowl
LII Net*
Incremental
Contribution
Total Gross Spending $406.6 ($68.3) $338.4
Total Economic Impact: Contribution to GDP $403.7 ($61.1) $342.6
Direct Impact $206.2 ($32.2) $174.0
Indirect Impact $88.5 ($13.5) $75.0
Induced Impact $108.9 ($15.4) $93.6
Jobs Supported (# FTEs) 6,000 (1,000) 5,000
Contribution to Area Payrolls $280.6 ($39.1) $241.5
Total Tax Receipts $113.2 ($17.8) $95.4
Net Federal $51.3
Net State & Local taxes $28.7
Source: Rockport Analytics, Minneapolis Super Bowl Host Committee
* After removing displaced tourism typical for 10-day period in late January-early February
FTEs=Full Time Equivalents
Total estimated gross state & local
taxes initiated by SB LII are reduced to
account for tax receipts from typical
tourism activity at that time of year that
will be displaced by the game and its
events (middle column)
Displaced tourism is estimated using
Meet Minnesota estimates of annual
visitor spending adjusted for a 10-day
Super Bowl period using average daily
hotel data (2007-2014) from Smith Travel
Research and Indianapolis’ actual SB
XLVI experience. It includes all displaced
leisure and business trips.
Includes both full and part-time
workers converted to FTE using full-
time definition of 2,080 hours per year
Copyright © 2015 Rockport Analytics, LLC. All Rights Reserved. 13
SB LII Fiscal Contribution is Significant
Minneapolis-St. Paul Super Bowl LII
Tax Overview in thousands of dollars
Federal Taxes Collected –Total Impact $ 60,401
State Taxes Collected –Total Impact $ 33,045
Sales $ 18,511
Rental Car $ 2,750
Local Taxes Collected –Total Impact $ 19,742
Lodging + Entertainment $ 1,568 Restaurant + Liquor $ 1,617 Hennepin County Sales $ 198 Minneapolis Sales $ 224 Transit Improvement $ 673
Total Gross Super Bowl LII-Initiated Taxes $ 113,188
State and Local Taxes Analysis
Super Bowl LII S&L Gross Tax Receipts $ 52,787
Incremental Super Bowl LII-Initiated State
and Local Taxes less displaced tourism and
existing exemptions
$28,666 Estimated by Rockport w/ input
from Meet Minneapolis and the
Minneapolis Super Bowl Host
Committee
Transaction taxes are estimated
using spending by category and
appropriate tax rates less any
exemptions (i.e. sales tax on grocery
store food purchases)
State & Local tax totals also include
other tax types such as corporate
income (state) and property (local).
These are derived by the IMPLAN
economic model of MSP.
Normal tourism-initiated taxes
for a typical 10-day period in
late January-early February.
These receipts are assumed to
be 100% displaced by Super
Bowl LII
Copyright © 2015 Rockport Analytics, LLC. All Rights Reserved. 14
SBLII Estimated Impact In Range With
Past Results Why the Broad Range?
• Different authors, methodologies, data integrity -
some more conservative than others
• Estimates vs. Hard Data: Level of cooperation from
NFL, Fox, CBS, ESPN, corporate sponsors, municipal
authorities, etc.
• Time: inflation naturally lifts the value of all visitor &
operations spending
• Relative Cost of Living -MSP’s cost of living is higher
than some other host cities (e.g. Dallas, Indianapolis)
• Minneapolis previously hosted Super Bowl XXVI in
1992 –economic impact estimated @ $176 million
($364 million in today’s dollars)
Miami
New Orleans
Tampa
MSP SBXXVI
Pasadena
Atlanta
Miami
Tempe
New
San Diego
Miami
Atlanta
Tampa
New Orleans
San Diego
Houston
Jacksonville
Detroit
Miami
Phoenix
Miami
Dallas
Indianapolis
New Orleans
New York
Phoenix
MSP SBLII
$150
$250
$350
$450
$550
$650
$750
1988 1993 1998 2003 2008 2013 2018
in m
illio
ns
of
$ o
f To
tal E
con
om
ic Im
pac
t (G
DP
)
Super Bowl Economic Impact 1989-2018
Source: University of New Orleans, Coates and Humphreys, UCLA/LA Sports Council, Price Waterhouse Coopers, Depken and Wilson, Rishe, Greater Miami Convention and Visitors Bureau, San Diego Citizen’s Task Force, Rockport Analytics * Houston SBLI and Minneapolis SBLII are pre-event estimates. Source: Rockport Analytics
Year Super
Bowl Host City
Economic
Impact (in millions $)
2010 XLIV Miami $ 333
2011 XLV Dallas $ 200
2012 XLVI Indianapolis $ 324
2013 XLVII New Orleans $ 480
2014 XLVIII New York $ 600
2015 XLIX Phoenix $ 719
2016 L San Francisco n/a
2017 LII Houston* tba
2018 LII Minneapolis* $ 404
Copyright © 2015 Rockport Analytics, LLC. All Rights Reserved. 15
SBLII Economic Impact in Perspective
By Promoting Minnesota Jobs
SBLII will support 6,000 full time equivalent jobs in MSP paying an average wage equivalent of $47,000 per year
By Contributing to the Health of the Public Education System
SBLII-initiated net state & local tax revenue is estimated to be enough to educate 2,350 Minnesota public school students or
hire more than 500 new classroom teachers*
By Directly Benefiting Area Businesses
SBLII will generate net incremental top-line revenue of over $338 million benefiting a broad array of Minnesota businesses in
sectors far beyond just hotels and restaurants.
By Building MSP Tourism
SBLII’s $338 million in incremental spending will boost annual MSP tourism by an estimated 7% in 2018 -all in a 10-day period
during tourism’s low season! Moreover, many visitors impressed with MSP and MN will return to build future tourism.
By Helping to Relieve the Tax Burden of MSP Households
SBLII will generate about $21 per MSP household in state & local tax receipts. Since no resident spending was included in the
economic impact analysis, these tax receipts can be considered net new to state and municipal government budgets.
By Capturing and Retaining Local Expenditures Made By SBLII Visitors
For every $1 spent at SBLII, the MSP economy will retain 99₵. About 69₵ of that retained benefit will go towards paying
Minnesota workers a total of $281 million in wages and salaries. And 13₵ of each SBLII dollar will go towards the payment of
state and local taxes.
How Will SBLII Benefit MSP & Minnesota?
* Based upon National Education Association statistics for Minnesota, 2015
Copyright © 2015 Rockport Analytics, LLC. All Rights Reserved. 16
Methodology & Data Sources
Task Methodology/Approach Data Sources
Estimate SB-initiated Visitor Spending
Past studies of game attendee/visitor spending were used to derive likely MSP SB LII outlays on hotel, F&B, rental car, shopping, etc. Estimates of total expected SB visitor volume was derived using stadium capacity, past surveys of game attendee-to-total visitor ratios, and MSP hotel room inventory. Spending per diems were adjusted for: (a) cost-of-living differential between MSP and other host cities and (b) overall inflation by category to 2018.
• Indianapolis, Dallas, New Orleans, and San Diego studies
• Smith Travel Research • Meet Minneapolis • D.K. Shifflet & Associates (DKSA) • US Census Bureau, BLS • Past NFL, Media, & Corporate expenses
Estimate SB-initiated MSP Game & Event Operations Spending
Each major operations entity was estimated using two approaches: (1) imputing MSP using past SB data covering individual line item expenses and (2) direct input from Minneapolis Host Committee’s budget. Organizations include NFL, ESPN, various Corporate sponsors, municipal authorities, NBC, local airport authorities, and local DMOs.
• Indianapolis, Dallas, New Orleans’ studies • Indianapolis, Dallas Host Committee
reported expenses • Minneapolis Host Committee budget
Translate spending into economic impact on MSP
Spending streams for visitors and operations by detailed category are inputted into the latest (2013) IMPLAN economic model of the MSP metropolitan statistical area. Contributions to GDP, jobs, wages, and taxes are estimate by the model. IMPLAN is a non-proprietary model of the regional economy that is widely used by to assess the economic impact of public or private investments.
• IMPLAN (www.implan.com)
Calculate Minnesota & MSP transactional taxes
Taxes directly applicable to visitor & operational transactions are calculated using the categorical spending described above alongside appropriate current tax rates. Exemptions for items identified in the tax law are also factored (e.g. state sales tax on food & clothing)
• Minnesota Department of Revenue • Meet Minneapolis collection of key tourism
taxes and rates
Estimate displaced tourism & calculate net SB LII impact
SB LII will displace regularly occurring tourism during Jan-Feb 2018. This tourism impact was estimated and subtracted from the gross SB LII impact calculations mentioned above towards a net benefit. Displaced tourism was estimated by prorating regular annual tourism spending for the winter season and using past studies to derive the 10-day late Jan-early Feb portion of average spending.
• Meet Minneapolis visitor profile and tourism spending estimates
• DKSA MSP trip budget averages • STR daily hotel activity during SB XLVI • IMPLAN model of MSP
Copyright © 2015 Rockport Analytics, LLC. All Rights Reserved. 17
About Rockport Analytics
Rockport Analytics LLC 1610 Herron Lane West Chester, PA 19380
web: rockportanalytics.com email: [email protected] phone: (866) 481-9877
Rockport Analytics is a research and analytical
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Capabilities include:
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