More than Just a Game: The Impact of a Big Event

January 02, 2008

It's just a game, right?

On February 3, Super Bowl XLII kicks off on the sturdy blades of Tifway 419 hybrid Bermuda grass at the University of Phoenix Stadium in Glendale. After a week of parties, more 75,000 privileged fans will fill the stadium's cardinal-colored seats. Another 150,000 out-of-towners will join 90 million fans worldwide watching on television. At game time the party is almost over … right?

Not a chance!

Just a game?

To say that Super Bowl XLII is just a game is to say that a Tom Brady mid-field touchdown bomb to New England Patriots' receiver Randy Moss with triple coverage is a backyard toss.

Hands down, this is the biggest sporting event ever for a metropolitan area that has its share of headline sports events. Phoenix has already hosted a Super Bowl -- in 1996. And for 36 years it has welcomed the Fiesta Bowl, and the first college football BCS (Bowl Championship Series) ever was played in University of Phoenix Stadium.

More? The FBR Open has been attracting national attention since 1939, and the NASCAR Phoenix International Roadway (PIR) events draw thousands. Add the hard-fought NBA Playoffs and Finals and the 2001 World Series to the list. This is not a backwater sports town.

But the end game is far more significant to the host city than any fourth quarter score, says Ray Artique. Artigue, former senior vice president of the Phoenix Suns, is now a professor of practice in the W. P. Carey School's marketing department and director of the W. P. Carey MBA Sports Business Program. This year he has witnessed the planning of a gargantuan event as a member of the Super Bowl XLII Host Committee. Phoenix has far more to gain in hosting the Super Bowl than the memory of a city-wide party, he says.

Last year's rain-drenched 29-17 Indianapolis Colts Super Bowl victory over the Chicago Bears at Dolphin Stadium in Miami generated $469 million in direct and ancillary revenues. That sum doesn't include the anticipated ripple effects from Super Bowl exposure. Though Artigue says that Phoenix has a "tall order" to exceed Miami's gain, the Valley can expect a surge of supplemental revenues in years to come.

And NFL Commissioner Roger Goddell's recent announcement that Phoenix now is in the rotation for the game's annual spectacular should provide long-term fuel for the branding of Greater Phoenix. Being in the rotation is "code for we're going to get the Super Bowl every three, to four, to five years, and that's no small thing," says Artigue.

For starters, there's the Super Bowl cottage industry that grows up annually in host cities. Game-related opportunities range from the sale of t-shirts to renting out private homes for $3,000 to $175,000 a week. But the city hopes that the positive impression it makes will result in more than the windfall of game day profits. It hopes that a fabulous Super Bowl performance will attract new visitors, Sunbelt transplants and businesses.

So who's complaining?

Locally, this game produces no real losers, says Dan Migala, a faculty associate in the marketing department at the W. P. Carey School and publisher of The Migala Report.

"The winners are definitely businesses in the tourism sectors," he says, noting the spillover revenue to resorts, restaurants, shops, airlines, car rentals, limos, taxis and the like. "The losers typically are local residents who in the short term have the inconvenience of crowds and not being able to get a table at their favorite restaurants, but have the long term benefit of higher tax revenues and growth as a result of more people in town."

"It's an incredible shot in the arm," says Tim Hogan, senior research associate with W. P. Carey's L. William Seidman Research Institute and one of the authors of a 1996 impact study done for Super Bowl XXX held at Sun Devil Stadium. "We all have reason to celebrate." According to the 1996 report: "The results of this study demonstrate the magnitude of the Super Bowl as an economic event."

This event occurs during the city's busiest time. The 73rd FDR Open -- a celebrated week-long event -- is always played during Super Bowl week. The Open is expected to draw 500,000 spectators, an estimated 15 percent from out of town, and generate more than $100 million in revenue. "Collectively, that's a half billion dollar infusion into Phoenix in a single week," says Artigue.

Experts are not fretting much about lost revenue from displaced vacationers -- the regular visitors who traditionally book one of the Valley's 55,000 hotel and motel rooms the first week of February.

"They'll be back," predicts John Eaton, clinical associate professor at the W. P. Carey School. Eaton, Artigue and others on a W. P. Carey research team will find out for sure after gathering the data for the XLII Super Bowl impact study. "These regular visitors have had plenty of notice, and have postponed their trips for later in February or early in March. It all adds up to a remarkable bonus for the region. Phoenix, no doubt, is a major player with an incredible track record of producing under pressure."

But, it's "not just about the money," says Michael Mokwa, chairman of the W. P. Carey School's marketing department and academic advisor to the sports business program. The big picture, he says, is equally vital. "People coming here for the Super Bowl will be making life memories, and our group efforts as a city can help them better understand what Phoenix is about."

Observers say that Phoenix embraces events such as these, with legions of volunteers (an estimated 10,000 for Super Bowl XLII). The city has "the right stuff," says Artigue. "Phoenix has hosted just about every major sports spectacle there is. We're not intimidated by them. We have all the amenities."

It adds up to a great reputation, adds Mokwa. "We are known as a city that can manage and deliver great events!"

The city that could

That wasn't always true, though. There was a time when Phoenix was more like the Little Engine That Could. "But we have developed overnight in so many ways, and now there's an on-going effort, as one of the nation's fastest growing cities, to prove to the world that we are for real," says Eaton.

Nationwide, Eaton says, there is a lingering perception that Phoenix is still part of the Old West, a place where you fly in for a trip to the Grand Canyon or where you sit by a pool in winter. "Nothing could be farther from the truth," Eaton says. Arizona vistas are indeed spectacular, but the lifestyle and opportunities are equally impressive. "We are a Super Bowl city in every way, and thus people will continue coming here."

"I'd go a step further," says Mokwa. "Some think of Phoenix as just a great resort town and not a vibrant metropolitan area. All the more reason why hosting an event like a Super Bowl is so essential in building for the future; it's an opportunity to offer the total picture of a energetic city, in all respects, with a strong working economy and excellent educational facilities."

"Phoenix in this regard is a distinctive city, and there is great pride knowing that, and in the knowledge that we have the capacity to organize and promote national events, and then to deliver on all expectations," he continued. "We have the know-how, infrastructure, expertise, corporate sponsors, across-the-board commitment from the public, as well as the blue skies and warm weather to make this happen. And when it does, it reinforces in all of us Valley residents our decision to be here and remain here."

Is there a downside?

Absolutely, if you cannot provide a great entertainment experience beyond the game. "That can be a downside," says Mokwa.

Adds Migala, "Historically, cities that see a Super Bowl as a building block to a greater future are those that turn these events into something great. It is those cities that see it as more that a one-time event and can see the greater opportunities surrounding it."

 

Bottom Line:

  • The Super Bowl XLII is the biggest sporting event ever for Phoenix that has its share of headline sports events.
  • Phoenix has already hosted a Super Bowl -- in 1996. And for 36 years it has welcomed the Fiesta Bowl, and the first college football BCS (Bowl Championship Series) ever was played in University of Phoenix Stadium. Add The FBR Open, NBA Playoffs, and Finals and the 2001 World Series.
  • NFL Commissioner Roger Goddell's recent announcement that Phoenix now is in the rotation for the game's annual spectacular should provide long-term fuel for the branding of Greater Phoenix.
  • Last year's Super Bowl in Miami generated $469 million in direct and ancillary revenues.
  • Though Artigue says that Phoenix has a "tall order" to exceed Miami's gain, the Valley can expect a surge of supplemental revenues in years to come.