
NFL claims $600M in Super Bowl economic impact. Economists say it's closer to $0 - amitkumar01
http://www.sportsonearth.com/article/66544296/
======
antonius
What ticks me off and isn't mentioned in the article is how the U.S Government
gave permission and classifies the NFL as a non-for-profit organization[1].
This classification deters millions in taxes that any other organization of
its' size would ultimately be paying.

[1] [http://www.nbcnews.com/business/legal-procedure-critics-
cry-...](http://www.nbcnews.com/business/legal-procedure-critics-cry-foul-nfl-
defends-nonprofit-status-8C11412804)

~~~
ozi
Why does this tick you off? "Non-profit" doesn't mean it has to be a charity.
It just means that they make no profit... All profits are divided among the
teams and taxed accordingly. The money is being taxed, just not at the "top"
level.

~~~
001sky
_It just means that they make no profit_

LOL. They make plenty, they just funnel cash to affiliates via the cost
structure. Having a non-profit status enables this shell game by eliminating
economic entropy.

Its 2013...this is not "news", its is standard operating procedures in many
walks of life. Have you seen the television contracts for the NCAA?

Oh, wait...those are just a bunch of amateurs =D The players, maybe. But not
the accountants, coaches, boosters, and administrators.

~~~
Zarathust
It is only a confusion of terminology. They have a lot of revenues which they
spend before they can be taxed, so they declare a lot of expenditures but no
profits. Many charities and religious institutions work like this.

~~~
001sky
This is true, to an extent. By design so-called "non-profits" are truly just
restricted from paying dividends (which can only be paid from profits). This
is illsutrative, however, in the broader sense most taxable corporate entities
forgo dividends for a variety of reasons. That is to say, they find the
payment of dividends to required subsequent re-capitalizations via finacial
markets to have economic entropy. Companies retain their profits, as a result,
for the benefit of management (avoiding market benchmarking) and to a lesser
extent, shareholders. A non-profit and a for-profit company are not that much
different it turns out once this is considered a point of equivalence. If you
take that argument to its logical conclusion, its makes sense also not to pay
taxes (more operating cash flow retention). Thus, from the perspective of
principal-agent theory, an eefficientnon-profit structure fully capitalized
and run equivalently a "non-dividending" but "operating profit" maximizing
entity. The purpose of maximizing revenues less costs is to opportunistically
extract economic rents.

------
VLM
This is a strangely bottom up analysis. If a long chain of assumptions and
wild guesses results in $35M sales tax revenue, it should be pretty easy to
compare this weeks sales tax revenue to 52 weeks ago and subtract and see how
it compares.

As a meta issue its a "belief system" so there's no point dragging math and
logic into it. Exactly like debating evolution or other topics.

Comically, we got stuck with a new stadium because it was claimed if the local
ball team pouted and left, all of us mere consumers would react by making huge
piles of paper cash money in our backyards, and then light the piles of cash
on fire. A complete lack of reasoning is BAU WRT sports economics.

As a startup issue you see pretty much the same style and type of arguments
about the contribution of startups to the local economy.

~~~
tsotha
When I lived in Southern California the NFL and its boosters were continually
trying to get the taxpayers to build a stadium complex. The arguments always
went something like "There will be X new tax revenue and Y new jobs." And
that's probably true.

But if you took the same land and used the same money to build a big shopping
mall your X and Y would both be much bigger. Every time local governments did
a study that compared a new stadium to just about any other use of the land
the alternative was better.

I'm not opposed to stadiums, per se, but professional sports teams are
businesses and as such need to pay their own expenses.

~~~
the_ancient
There is one One Truth above all Else

If Running a Stadium was profitable, the NFL or the Teams would do it, Since
they do not want to touch the stadium with a 10 foot pole, then you know it
will not be profitable

~~~
chaz
Sorry, this makes no sense. Economic impact is measured in revenue to local
businesses. Unless the NFL/team owns all of the local retail, restaurants,
tolls, parking lots, tourism and associated taxes, there is no way the
NFL/team could ever realize that revenue. We can debate the actual revenue
impact (check out the "profitability" of the Olympics:
[http://www.npr.org/blogs/money/2012/07/23/157224211/olympic-...](http://www.npr.org/blogs/money/2012/07/23/157224211/olympic-
economics-the-pre-games-show)), but the standard you propose is incorrect.

~~~
Spooky23
The economic impact of a stadium or other large public works project is based
in calculators that are usually published by the state economic development
agency. It's more of an art than a science, and like any projection made over
a period of 30 years, they rarely hit their numbers.

Public financing of something like a stadium or arena does three things:
eliminates a tax liability for the teams/other users, eliminates risk, as the
local taxing authority ultimately owns the debt, and keeps the labor and trade
unions happy, and stadium projects keep the guys on the payroll.

Ultimately, all of people in a taxing district bear the burden of these
giveaways. If I could apply for a full property tax exemption in NY, the
$6,000/year I pay for my modest home would be used for capital improvements
like a kitchen, solar panels and siding. That would give some construction
dudes jobs, and generate more value. The government easily spent $100m on
Super Bowl security. That's a lot of money spent better elsewhere or not at
all.

------
Stratoscope
In the last few days I've received a couple of emails from FedEx with the
message below. No doubt other carriers have been sending similar alerts.

I don't know, of course, but I have a strong hunch that _none_ of the costs
associated with this message (businesses unable to receive their deliveries,
carriers having to make contingency plans and add extra staff to catch up
after the "festivities", customers having to work around shipping restrictions
and delays, etc.) have been accounted for in NFL's economic analysis.

After a great storm comes through, there are plenty of estimates of the
economic damage it causes. Of course the Super Bowl has benefits that a storm
lacks, but I have to wonder if the negative externalities are properly
accounted for, or if they just tally the benefits.

FedEx message follows...

Operations During Super Bowl XLVIII

FedEx will be operating in the metro New York / New Jersey area during
SuperBowl XLVIII festivities through February 5, 2014. Some customers in the
metro New York / New Jersey area may experience service delays or disruptions
during this time because of government security measures in place for Super
Bowl XLVIII. We encourage all customers shipping into the area to check with
your recipients to understand their locations relative to the security zones.
We encourage metro New York / New Jersey area customers to track packages on
fedex.com or by calling 1-800-GO-FEDEX. Our customer service teams can assist
you in locating an alternate delivery location as needed. We have implemented
contingency plans and our teams will minimize delays to the extent possible.

Please continue to check FedEx Service Alerts for details.

Shipping to affected areas?

To help avoid delays, we encourage you to contact your recipients to verify
whether their location is open or able to receive deliveries before and after
Super Bowl XLVIII.

Note that potential service disruptions may not affect FedEx Express, FedEx
Ground, FedEx Freight, FedEx Office, etc. the same. This may result in
different levels of impact as well as cities, states and ZIP Codes serviced.

Continue to check fedex.com for service updates. For specific shipment status
information, please track your shipment at fedex.com. You can also contact
FedEx Customer Service at 1.800.GoFedEx 1.800.463.3339 or stay up to date by
subscribing to FedEx Service Alert email notifications at the FedEx Email
Subscription Center. Consistent with the provisions of the FedEx Service
Guide, shipments delayed due to Super Bowl XLVIII are not eligible for a
refund or credit under the money-back guarantee policy.

------
UweSchmidt
How about it's a zero-sum game: Entertainment money could be spent elsewhere.
Actual economic impact is building a better tool or bringing in the harvest.
Paying _this_ or _that_ entertainer to do their thing is meaningless.

(The Gross Domestic Product and other economic figures do not account for this
and treats each economic transaction as equal. Additionally the knee injury
hospital bill of the young player who never made it to the NFL also increases
the GDP, adding to the confusion what "economic impact" is.)

~~~
massysett
Entertainment is essential; through the ages societies have allocated economic
resources to entertainment in various forms. That's what the Romans did in the
Colosseum. Without entertainment to unwind, people are less happy and they
just might riot rather than bring in the harvest. So entertainment is just as
essential as building a better tool.

Entertainment like anything in the economy benefits from greater efficiency,
and modern economies deliver great value for the resources they spend on
entertainment. There is cheap plentiful music everywhere, and lots of quick
video available. Pro sports also provide quite efficient entertainment, as
people spend tons of time not only watching the events but also tracking them
and talking about them. It gives people a lot of enjoyment.

------
seizethecheese
How about a negative economic impact? The event itself creates distortions
that many unsophisticated merchants are not able to predict. I work at a
restaurant, and the owner almost certainly lost thousands of dollars today due
to very little demand. (We were severely overstaffed and also had to throw
some food away. We weren't open last year so predicting this was non-trivial.)

------
massysett
The "tourist displacement" argument makes no sense. The hotel market in any
large city depends in part on having large events come to town: conventions,
marathons, Super Bowls. Such events help drive the construction of multiple
large hotels. Without the large events, there would be fewer hotel rooms in
the first place and, thus, fewer potential tourists to displace--no tourists
ever materialize without hotel rooms. With the large events, some tourists
might be displaced for abnormally large events (and in NYC or in most Super
Bowl host cities, the Super Bowl is not going to be abnormally large.) But
even if this displacement happens, the tourists benefit during all other times
because there are more hotel rooms for them--which lifts numerous other
businesses in the city, such as restaurants and shops and entertainment
venues.

------
honksillet
The truth is somewhere in between

~~~
tomByrer
^ logical fallacy [https://yourlogicalfallacyis.com/middle-
ground](https://yourlogicalfallacyis.com/middle-ground)

~~~
zorbo
^ Logical fallacy fallacy
[http://www.fallacyfiles.org/fallfall.html](http://www.fallacyfiles.org/fallfall.html)

The beauty of logical fallacies is that you can use them to discredit anything
you want. "Scientists are in agreement".. Appeal to authority! But that's not
how logical fallacies work. You still need to provide a logically sound
reasoning why the fallacy applies. Which you didn't.

~~~
ucho
He probably thought it is obvious. If it is so hard to estimate economic
impact it might as well be over 600M or under 0.

~~~
Zarathust
This year, I bought a box of chicken wings for 10$ so I made his argument true

