Above the Fold

Does It Make Good Economic Sense to Host a Super Bowl?

Aside from all the cryptocurrency commercials shown during the big game Sunday, some of you might be wondering just how big of an economic boom the Super Bowl is for its host city. Over the years, there have been numerous studies that showed a vast difference in the estimated $300 million to $500 million earned by host cities and what they actually make. One economist, Victor Matheson, estimated (last year) just $30 to $130 in real financial gains for big game metros. 

Aside from the costs and tax-subsidies around building a Super Bowl-quality stadium, there are immense costs in infrastructure, transportation and overtime for city employees like police and transit workers. Matheson cited an $8 million tax break given to the NFL by New Jersey back in 2014, and a subsequent $5.6 million loss for NJ Transit just in transporting fans to and from the stadium. Did we mention the NFL gets to use the stadium for free?

Things get even more expensive as the NFL dictates, very specifically, everything from parking spaces, hotel rooms and transportation types to billboards, food, security and other necessary services and amenities that need to be made available, and fees due directly to the organization. The NFL’s demands for tax breaks and subsidies also drain potential profits. Busy cities like Los Angeles, California, already have high occupancy rates for hotels and short-term rentals, so the brief flood of tourists is merely a top-off in revenues, but a major headache for locals who have to deal with clogged roads, restaurants and public transport. 

Tickets for Super Bowl LVI were selling at a record average of nearly $6,700 (the most expensive tickets for nearly $50,000) the day before the game, and much of that markup over face value makes its way to speculators and businesses, not to the community. At the end of the day, it might be “cool” for a city to host a Super Bowl, but it’s not all about the money. 

Three Things 

1. Fading Mask Requirements to Impact 3M – After swelling to a $1.5 billion business for the industrial company in 2020 and 2021, 3M expects the fading pandemic to negatively impact its organic growth. The company expects lower mask demand to shave about 45 cents off its per-share annual profits. While mask shortages were common in the early stages, many of 3M’s competitors ramped up production to ensure high-quality face coverings were readily available. 
2. World’s Biggest Restaurant Chain Gets Bullied – With nearly 40,000 locations globally, McDonald’s tends to call its own shots when it comes to suppliers. But the Wall Street Journal is reporting that the quickly expanding delivery service DoorDash, Inc. will raise its fees on McDonald’s locations that don’t prepare food fast enough. McDonald’s was able to gain a favorable commission rate from DoorDash, but this new contract will force the mega-chain to improve efficiency and order correctness, as the agreement also states that McDonald’s will bear the costs of inaccurate orders or forgotten condiments like ketchup or BBQ sauce. McDonald’s delivery deal with Uber Eats was also updated recently. 
3. Crypto Reps Big at Super Bowl LVI – For the first time in history, not one, but four different crypto exchanges bought big ads during the big game Sunday. Several of the ads featured massive stars like Larry David and Lebron James, while Coinbase’s simple, 60-second, bouncing QR code was so popular, it temporarily crashed the company’s servers. The ad linked to a special offer that gave $15 in bitcoin to consumers who signed up for a new account. 

Did You Know? 

Nice Flag, Eh!

It was on this day in 1965 that Canada adopted its current “maple leaf” flag. The search for a new flag to replace the former Canadian Red Ensign actually began, in earnest, back in 1925. After the efforts faded, another parliamentary committee was appointed in 1946 and examined more than 2,600 flag submissions — a decision was never made. It wasn’t until 1964 that parliament finally decided to adopt a new design that incorporated the country’s official colors of red and white, along with a stylized 11-point maple leaf in the center.