How the Super Bowl at SoFi could affect Southern California’s economy

SoFi Stadium in Inglewood opened last season, but because of the pandemic, the seats were empty. It will be the first NFL venue to host the Super Bowl in its first year of hosting fans. (Photo courtesy of SoFi Stadium.)

LOS ANGELES – Super Bowl LVI is expected to bring millions of dollars in economic benefits to Southern California next February, but there’s disagreement over exactly how big that economic impact will be.

The NFL hasn’t given its official estimate for this year’s big game, which will be played at Sofi Stadium in Inglewood, but before Super Bowl LIV in Miami, NFL officials estimated the game would bring $500 million of economic impact to Southern South Florida Business Journal.

But Victor Matheson, a professor of economics at College of the Holy Cross who studies the impact of football’s biggest Sunday, says it’s actually a small fraction of that.

“So myself and others, people who have actually have gone back and looked at the economies that have hosted the Super Bowl, we get numbers between $30 and $130 million,” said Matheson, who is a professor of economics at the College of the Holy Cross. “Which is not zero, but also a fraction of what the NFL is saying. And we have explanations of why that might be the case.”

The NFL’s method of predicting the economic impact of a Super Bowl and an economist’s method of finding the impact differ in a few ways, Matheson said.

The NFL’s numbers are all based on predictions and estimations, he said, so the league will try to estimate the number of people coming to town for the game and the weeklong Super Bowl Experience and how their spending habits will affect the economy.

Finding the real economic impact is not that simple, Matheson said, because of such factors as the substitution effect and the crowding effect.

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“Money is being spent by people who are already here,” he said, “and those people absent the Super Bowl would have spent money elsewhere in the local economy. This is what we call substitution effect.”

The crowding effect has to take into account that hotel rooms normally are about 70% filled year round, so when hotels sell out, the Super Bowl’s impact would only be 30% more than a typical weekend’s occupancy rate, Matheson said.

“Even if you have a hotel that is completely full of Super Bowl fans,” he said, “you can’t say that the entire hotel has the benefit of the Super Bowl unless you also subtract out the people who would have been there anyway.”

There’s also the question of how ready local businesses are to deal with increased crowds and potential customers.

The NFL and the Los Angeles Super Bowl Host Committee have been focusing on how they can prepare local businesses to take advantage of this opportunity through the Business Connect program, launched in October 2020. The program targets businesses owned by minorities, women, LGBTQ+ or military veterans.

“The purpose of the Business Connect program is to create business opportunities for local diverse businesses, to have an opportunity to compete for Super Bowl contracts and to participate in our professional development programming,” said BJ Waymer, lead of Business Connect.

This could have an extremely positive effect on the many small businesses who are in need of a boost in business after a tough 18 months of dealing with COVID-19.

CORRECTION: An earlier version of this story misquoted Chincie Mouton in the 18th graf. The quote has been corrected, but clients who used earlier versions of this story are asked to run the correction found here.

Local taqueria chain Yuca’s began at a tiny former shoeshine stand and grew to prominence in 2005, when it won a James Beard Award.

“Mom raised us to always be hopeful, so she said you know I don’t know how we are gonna do it, but we are going to survive this,” Dora Herrera, part owner of Yuca’s Restaurants, said in a recent statement.

Chincie Mouton, director of Business Connect in Los Angeles, said her team prepares business owners for Super Bowl events through workshops that are held once a month.

“Bringing in marketing officials that really speak to your website presence, your digital media presence, how are you carrying yourself on social media,” Mouton said. “Another thing can be how to effectively write an RFP (request for proposal) response or how to put together a proposal.”

Inglewood Mayor James T. Butts is pleased with the NFL initiative.

“In a post pandemic world, events like the Super Bowl create tremendous opportunities for economic activity to return to our communities and to our industries hardest hit by COVID-19,” Butts said in a press release. “Thanks to the NFL and it’s Super Bowl Business Connect program, 250 local diverse and event-ready businesses will be granted the opportunity to earn contracts related to Super Bowl LVI.”

Super Bowl LVI is set to take place Sunday, Feb. 13.

Jackson Devine jack-son de-vine (he/him/his)
Sports Reporter, Los Angeles

Jackson Devine expects to graduate in May 2022 with a bachelor’s degree in sports journalism. Devine is participating in Cronkite News Los Angeles and has worked as a sports journalist for AZPrep365.