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Major sporting events, like the Super Bowl, require big investment from host cities

For cities that hold major sporting events like the Super Bowl, the job of hosting requires a major financial investment.
It takes years of planning and preparation, including infrastructure upgrades, in order for a city to gain the right to host a major sporting event like the Super Bowl or the Olympics.
For Raymond James Stadium in Tampa, host of Super Bowl 55, the stadium underwent $160 million in renovations, some of it underwritten with tax dollars.
Posted at 12:20 PM, Feb 01, 2021

In just days, the eyes of the football world will focus on Tampa, Florida, the site of Super Bowl 55. In the stands during this socially-distant, COVID-19 time will be a mere 22,000 fans, including 7,500 vaccinated health care workers.

Preparations there have been years in the making, along with a $160 million renovation to Raymond James Stadium, including $10 million in federal money for COVID-19 related upgrades. So, do major investments like these pay off for host cities?

“Generally, the return on an investment that's required by a destination is significant,” said Jeremy Jordan, associate dean of the School of Sport, Tourism and Hospitality Management at Temple University.

Jordan says studies on the economic impact of games can be subjective and aren’t always reliable.

“You could have two or three groups study in the same event and come up with very different results in terms of the impact of the event,” he said.

With that said, the return on investment depends on the sporting event. For example, the Olympics require a lot more infrastructure, billions of dollars-worth, for building facilities that may not get used again after the games are done.

The Super Bowl, though, is different. Take Tampa’s stadium, for instance.

“Obviously, the Buccaneers play there. University of South Florida uses [it] for their football games. There are usually several bowl games there, as part of the College Football Bowl System,” Jordan said. “So, you know, if you look at it from a sustainability perspective, it probably is worth the investment.”

However, this year’s Super Bowl won’t have quite the local economic impact it might have had because of the pandemic, something which future hosts of national sporting events should take note of.

“It will be interesting how long it takes for people to feel comfortable to go sit in a stadium of 70,000 people and attend a sporting event,” Jordan said. “It doesn't mean they're not going to consume it, but the patterns of consumption may be different.”

Yet, he says there is one major positive to cities that host these events.

“It's a status indicator, right?” Jordan said. “I mean, to say that you hosted the Super Bowl or, obviously, that you hosted something like the Olympics, it creates the perception that this is a first-class destination.”

It’s the kind of branding money can buy.