Super Bowl

Super Bowl benefits host city, but by how much?

Bryant McInerney, special to
Super Bowl 50 preparations are under way in Santa Clara, California.
Harriet Taylor | CNBC

At the Super Bowl, to the victor belong the spoils — in this case, the Lombardi Trophy that goes to the NFL team that emerges victorious.

Yet long before kickoff, there's another battle that takes place that most viewers don't see, among a clutch of cities that must convince an NFL committee why they deserve to host the big game.

This year, that prize went to Santa Clara, which hosts Levi Stadium, home of the San Francisco 49ers. Along with the championship game — the most watched sporting event in the entire world — comes a boost in economic activity to the city from the thousands of people who travel from far and wide to see the game.

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Last year's Super Bowl (played in Glendale but with Scottsdale and Phoenix hosting events) produced a gross economic impact of $719.4 million for the entire state, according to a study from Seidman Research Institute and the School of Business at Arizona State University. This was a more than 30 percent increase from the last time Arizona hosted the event.

Whether the already cash-rich region that houses some of technology's biggest names will see a similar boost is anyone's guess.

P.J. Johnston, an NFL spokesman for Super Bowl 50, told CNBC that economic impact estimates for Super Bowl 50 "have varied widely, from a couple hundred million to nearly $800 million."

The league will perform an impact study after the event, Johnston added, "relying on actual numbers. However, we know the impact will be large, and that the Bay Area's business communities, workers, and charities are already benefiting financially."

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Every city that hosts the Super Bowl shells out some taxpayer funds in costs related to the game, which can be a source of controversy. Recently, an independent study determined that San Francisco will be paying nearly $5 million to host celebratory events, while Santa Clara, where the game is actually being played, will have its costs covered by the NFL.

Still, experts say the costs are small price to pay for hosting the sports world's premier event, which provides a boost to a host of businesses large and small. Johnston told CNBC that San Francisco will "reap millions of dollars" through various leisure spending and tax revenue.

"From restaurants to merchandise sellers, the Super Bowl has a tremendous impact and it affects small businesses, employment and the spirit of the city," said Carol Roth, a small business expert and a CNBC contributor. Immediate beneficiaries include hotels, rentals and ground transportation.

"The sharing economy will benefit from the Super Bowl, and people that participate with companies like Uber and Airbnb can expect to see a spike in sales when the Super Bowl comes to town," Roth said, adding that a major sports event has a psychological boost on the citizens.

"When New Orleans hosted the Super Bowl, it brought back the spirit of the city" after the devastation of Hurricane Katrina, Roth said. "With the Super Bowl, people feel like there's an extra camaraderie and a boost of a good feeling. It gives everyone more of an incentive to go out and kill it in their businesses."

"Super Bowl Week" brings in a significant amount of foot traffic as well. Downtown events in both Phoenix and Scottsdale brought in more than 1.5 million visitors from around the country, according to ASU data. According to some business owners, there's an undeniable trickle-down effect from all the activity.

At the Union Square Sports Bar in San Francisco, manager Brian Martin explained that Budweiser has already started promoting their brand, as well as Super Bowl 50.

"Once playoff games started, Budweiser started coming in and paying the difference of the initial retail price of their beer, which [effectively] lowered the prices for customers," Martin said.

"They have been giving us new beer tap handle ornaments, new Super Bowl 50 window decals, and…glass wear," he said, adding that other beer companies were offering similar deals.

Clarification: Super Bowl 49 was played in Glendale, though neighboring cities Scottsdale and Phoenix held related events.