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Super Bowl Economics

2009 February 1
by Skip Sauer

University of South Florida Economist Phil Porter is referred to here as the “Dr. Doom of sports economics,” presumably for throwing cold water on economic impact claims surrounding the Super Bowl. That’s what you get for telling it like it is, even if your abode doesn’t sport … unusual wall hangings. Some figures of the mundane variety (and not all that pretty) are here.

In spite of the gloomy reports on the economy, NBC is reporting that advertising revenue will hit a record $206 million for the game. This despite the fact that American car companies will be absent from the ad lineup. Frankly, I prefer the VW ads to the ones for Ford Trucks, and am somewhat heartened that my bailout contribution won’t occupy my TV screen during the Super Bowl broadcast.

This report has a several interesting anecdotes on economic impact in Tampa. Most interesting to me was the following:

The Federal Aviation Administration is expecting about 1,000 more small private planes and bigger corporate jets than usual to use Tampa-area airports over the weekend – about the same increase that Phoenix saw for last year’s game.

But this year some of those who favor deluxe private air travel may be staying home. Nathan McKelvey, chief executive officer of Jets.com, which books charter flights on private aircraft, said last year he booked 55 trips to the Super Bowl – many of them in premium aircraft with seating ranging from six to 12. This time around, McKelvey has booked 18 trips.

With fewer luxury planes in the sky, there also will be fewer courtesy vehicles – a mix of Cadillacs and Chevys – on the ground in Tampa. That’s a reflection of the crunch at General Motors, which cut 14,000 jobs last year.

GM, which recently received $9.4 billion and is scheduled to receive another $4 billion in government bailout money, says it scaled back on the fleet of courtesy cars it makes available to the NFL for the weekend and it decided not to buy a costly in-game ad this year.

“We are cutting the courtesy fleet in half and providing the NFL nearly 200 vehicles,” said GM spokeswoman Kelly Cusinato. She also said that although in the past GM hosted a dealer party in conjunction with the Super Bowl, this year “we are not hosting any dealer meetings and no GM executives are attending the game.”

That seems prudent. Maybe Donald Fehr should take a lesson from GM rather than John Thain. It’s only one quote, but Dave Zirin’s interesting piece on sports & the economy quotes the MLBPA Chief as saying: “Historically, baseball has been recession resistant.” Fehr could be posturing for the purpose of collective bargaining, or he could be ignorant. Or he could be referring to real output — i.e. attendance and viewing in general, in the presence of lower ticket prices and player wages. But I don’t think so. The 22% drop (annualized) in consumer purchases of durable goods last quarter, along with data from earlier eras, suggest to me that “resistance” could be an ill-timed strategy for baseball players.

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