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2010 May 26
by Victor Matheson

Yesterday the NFL announced that the 2014 Super Bowl will be played in the new Giants/Jets stadium in the Meadowlands. Aside from the obvious interest in the weather, the game also provides an interesting question of what is the optimal size of a governing jurisdiction for public finance purposes. 

The game, with its attendant traffic congestion and demand for public services will be held in New Jersey, but the vast majority of the economic impact (limited as it may be) will accrue to NYC. Hoteliers are one of the clearly identifiable winners in any mega-event, and how many high rollers willing to spend $1,000 on a Super Bowl ticket are going to stay in Newark?

While the NFL’s claim of $550 million in economic benefits from the Super Bowl is almost certainly overblown, the data do suggest that a figure of $30-$90 million in gains may be reasonable. So, should NYC share some of their windfall with the state that actually made this event possible?

UPDATE:  Apparently East Rutherford, NJ Mayor James Cassella agrees with me

The mayor of East Rutherford isn’t feeling so super. Sure the New Jersey burg is technically home to Super XLVIII in 2014, but all the glory, hoopla — and frankly, much of the moolah — will go across the river, Mayor Cassella lamented yesterday.

Local hot spots such as Tao’s restaurant, the Blarney Station and the Park Tavern “will do more business than “a typical February weekend,” he said. But in general the Super Bowl will mostly generate traffic, he said. “If the weather gets bad, then they will ask me to get involved — and we’ll be paying overtime to clean up the snow and never see anything for it,” Cassella said.

4 Responses
  1. Dan permalink
    May 26, 2010

    I went to SB 34 in Atlanta and it was miserable dealing with the ice storm that weekend. The game was fine but the Georgia Dome had a roof on it. Take away that roof and I can’t even imagine how bad the experience would have been. Games in cold weather are one thing but ice storms are something else.

    I’ve been to Super Bowls in New Orleans and Atlanta and traffic was not an issue either time. Atlanta had the rail system and other than scraping the ice off the windows when we got back to our car, getting to the game and the NFL Experience was easy. In New Orleans we parked under the interstate and walked to the dome. I doubt the New Jersey Super Bowl will be free of traffic problems.

    As far as sharing the windfall with New Jersey, tough luck. New Jersey would not have a stadium there if New York City were not across the river. If they want people to stay in New Jersey, give them a reason to be there besides the stadium. I have no love for Mayor Bloomberg and the idiots that run the city, but they don’t owe New Jersey anything.

  2. May 26, 2010

    This is probably a mistake for New Jersey, but it could have been worse. There was a proposal to hold a Formula One race in Jersey City. It would have required building a racing circuit. F1 really wanted to race in NYC proper, but there is no way NYC would put up with F1′s nonsense. Fortunately for New Jersey, the Jersey City mayor squashed the plan earlier this month. I think the primary reason was environmental, but I’m sure the fact that the costs would be paid for by New Jersey while the benefits went to New York weren’t lost on the Jersey City administrators.

    Instead, F1 announced this morning that they will be racing in Austin, Texas soon. It will require a permanent circuit to be built. I’m 99.9% sure that this race will never happen in Austin even though it has already been announced. Austin isn’t Dallas. The environmentalists will be out in full force if the track is anywhere near the city. More importantly, I don’t know where these mysterious backers are getting their money. I’m almost certain that this will be a “paper” track like so many proposed racing circuits in the US. The funny thing is that this race was announced without any rumors linking F1 to Austin. It certainly took me by surprise.

    Assuming that the race happens, what do the economists think will be the impact on Austin and Texas? I think this is a legitimate question because a Formula One race certainly qualifies as a major sporting event. In the past, F1 races have been major failures for American race promoters.

  3. May 26, 2010

    Traffic for the Super Bowl is unlikely to be much worse than traffic for any game at the stadium. Every game (presumably) will be a sellout, and there aren’t going to be seats added for the Super Bowl. While there will be many more media representatives, for the most part they’re not going to be on the road at the same time as the fans.

  4. Greg Pinelli permalink
    May 31, 2010

    Someone has to pay the piper..right? A bazillion buck facility was built to house the Jets and Giants and it needed a little kick in the pants..the NFL owes NY and yielded to certain realities. Will it be a little cold? So what….everyone will have become so well lubed before the game that unless an arctic blizzard hits they won’t care.

    NY City will do just fine. No one with any class or money will stay in New Jersey..and as for policing costs. Spare me. How could that crowd possibly be more trouble, more drunk, or lower class than those at a Jets home game?????

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