Strategy

Super Bowl XLIII Spending Off XX Percent: PwC

While the economy is hurting corporate and fan spending plans for the Feb. 1 contest in Tampa Bay, the accountancy still sees a $150m local benefit.
Stephen TaubJanuary 21, 2009

Spending in the Tampa Bay area for Super Bowl XLIII is likely to be thrown for a loss by the lousy economy — with receipts expected to be off far by 20 percent — but it should still approximate $150 million, according to a study by PricewaterhouseCoopers LLP.

Fans of professional football’s rival Arizona Cardinals and Pittsburgh Steelers, clashing on Feb. 1 — along with media corporate sponsors, and other visitors to the Florida venue — earlier had been expected to contribute $180 million to the local economy, according to a proprietary analysis by PwC. The analysis takes into account various direct-spending factors, but excludes the so-called multiplier effect, which introduces certain “indirect” and “induced” impacts. (Indirect receipts include a concession company’s purchase of goods from local producers, while induced impacts included the rise in local income levels from the increase economic activity.)

PwC’s analysis figures on fewer visitors of all types, and shorter stays and spending cutbacks by those who do visit, including expenses for lodging, transportation, food and beverage, entertainment, business services, and other hospitality and tourism activities related to the game.

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“This estimate is based on a proprietary analysis that takes into consideration characteristics that are unique to this year’s event and influence the level of direct spending taking place including the  participating teams, host community, economic conditions, and other factors,” says PwC.

Of course, the Super Bowl also probably will be hurt by the absence of a team like the reigning champion New York Giants. Major-market teams are, of course, bigger draws in many ways. The buzz is likely to be lower for a match-up that features two second-tier cities.

“While national economic concerns were prevalent at this time last year, visitor spending in the Greater Phoenix area (last year’s site) was bolstered by the participation of two large market teams, unprecedented fan and media interest, and corporate spending which was committed months prior,” says Robert Canton, a director in PricewaterhouseCoopers’ Hospitality and Leisure practice, focused on the sports and tourism industries.

He adds that Super Bowl plans are typically made at least six months in advance, and sometimes far longer ahead, so that this year reflects sponsors and others setting spending budgets during a turbulent economy, with an uncertain future. “Based on the number of this year’s Super Bowl-related events which have either been cancelled or where cutbacks have been announced, it is clear that businesses have found it difficult to ignore their more immediate operating uncertainties and investor demands — even at the expense of one of America’s most popular events,” he added.