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May 26, 2016

Super Bowl LIII: Region, state to benefit from $400 million projected impact

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NFL owners this week selected Atlanta to host the 2019 Super Bowl, an economic boon for the regional and the state.  It will be the third time the city welcomes teams and visitors for the Super Bowl and the first time that the game will be played in the new Mercedes-Benz Stadium.

Each of the teams bidding on the game made a 15-minute presentation Tuesday at the NFL's Spring meeting in Charlotte.  Atlanta's pitch, dubbed "Atlanta Transformed," included a video highlighting the new stadium, the city's history of hosting major sports events, and our story was told by former ambassador Andrew Young.   The team, lead by Equifax chairman and CEO Rick Smith, United Distributors president and CEO Doug Hertz, included Falcons president Rich McKay, Atlanta Sports Council executive director Dan Corso, Atlanta Convention & Visitors Bureau president William Pate and Georgia World Congress Center Authority chief commercial officer Carl Adkins.

Upon being awarded Super Bowl LIII, Falcons Owner Arthur Blank thanked the group as well as Governor Deal, Mayor Kasim Reed and hometown fans for their long-standing support of bid efforts.

Aside from showcasing Atlanta and its many new visitor attractions, a preliminary economic analysis demonstrates that the Atlanta region and the state stand to significantly benefit from the game and related activities.

Q. What is the estimated economic impact to metro Atlanta?

A. Our early estimates suggest that metro Atlanta will benefit from approximately $400 million in economic impact.

Q. How did you reach these initial projections?

A. We looked at previous results and estimates of direct, indirect, and induced spending. We also considered issues of potentially displaced activity. Atlanta has a seasonal lull in hospitality around the time of the game, which should mitigate displacement. The hotels will have greater occupancy and, importantly, rent the rooms at higher rates than they otherwise could have.

Q. How does this estimate compare to other recent Super Bowl host cities?

A. The issue of estimating net economic impact, even after the fact, is contentious. And with the Super Bowl continuously growing in size and duration, it’s hard to project year-to-year with pinpoint accuracy. However, we are confident that for the future event, a $400 million impact is a comfortably conservative estimate. Our projections are in line with what the most recent Super Bowl region, the San Francisco Bay Area, reported. In March, reports pinned its total economic impact at $350 million, driven in large part by hotel/motel, commercial and private airport revenues. Following the Phoenix Super Bowl the previous year, Arizona State University’s School of Business estimated a net number at over $700 million; a conclusion which many have met with skepticism.

Q. How much of the estimated revenue will benefit the city specifically vs. the region?

A. It’s hard to say this far in advance. In the San Francisco Super Bowl, the city of San Francisco netted only a few million in revenue, as the stadium is located so far outside of the city in Santa Clara. Since Mercedes-Benz stadium will be located right in downtown, the majority of net revenue should benefit the City of Atlanta, Fulton County and the immediate surrounding counties such as DeKalb, Cobb, and Clayton etc. The state as a whole will also benefit from taxation of the added income generated by the event, in addition to the added business and personal income taxes.

Q. Other than the airports and hotel/motel industries, what other industries might benefit the most from the Super Bowl in town?

A. This event will primarily benefit the hospitality industry. The jobs associated with it have the potential to have a significant impact on the reputational strength of our region and our state.

Q. What costs will Atlanta incur in preparing for the event that will offset the potential net economic impact?

A. The host committee bears most of those extra costs, with the municipalities assuming a smaller portion.

Q. Any projection on the number of short-term and long-term jobs that hosting the Super Bowl will create?

A. Because it is a one-off event, the long-term job impact is negligible. How well the event is received will have some long-term reputational effects, which may have some lasting influence. In the short run it is clear that additional labor will be needed for the hospitality and related industries. How that divides between added temporary jobs and/or extended hours for existing workers is up to the management of the individual firms.