Super Bowl XLVI Economics

By: 

Was the Indianapolis Super Bowl an economic success for the city? This question seems to be asked a lot these days, and the opinions are all over the place. My answer is a qualified "Yes".

Estimates will vary, but the overall impact is on the order of $100-$150 million to the area. Of course, some of that has already left town in the form of profits to the NFL and profits to the hotel owners and other businesses that do not reside in central Indiana. But that which remains will still exceed the costs of putting on the game.

The issue that makes the economics look worse is when you factor in the cost of Lucas Oil Stadium. While building the stadium did not ensure that Indy would get a Super Bowl, we surely would not have gotten it without a new stadium. Taxpayers funded about $600 million of the construction costs of Lucas Oil, and the financing means we will be paying for it for years to come. The economic benefits of hosting a Super Bowl certainly do not exceed this amount.

However, at this point (and when the Super Bowl was awarded) that was a sunk cost, one the citizens of Indianapolis could not recoup regardless of whether the game came to town. So the Super Bowl is economically beneficial to Indianapolis. Whether having an NFL franchise here is economically beneficial is an open question.

Personally, I would love to see the Super Bowl come back in the next 6-10 years. We've already built the stadium, the J.W. Marriott, Georgia Street, etc. Might as well get as much return on those investments as we can.