S&T Study Shows Economic Win for Kansas City
Following the Kansas City Chiefs victory over the San Francisco 49ers in the Super Bowl on February 2, 2020, Dr. Michael Davis - an economics professor at Missouri University of Science and Technology - stated that the Chiefs had brought Kansas City more than just a Super Bowl win. According to Dr. Michael Davis, when a National Football League (NFL) team wins a Super Bowl Championship, the city in which the franchise is located benefits financially. Dr. Davis’ study shows that, on average, an NFL team that wins ten to eleven season games, increases the income of residents in the teams home city by about $100 per person per capita. Teams that win the Super Bowl bring their city an additional $20 per person per capita. Dr. Davis admits that this
“ … may not sound like a lot but $100 spread over millions of people is quite a bit of money”. The study is based on the observation that following a home team win, residents are generally happier. After a win, the associated increase in happiness levels leads to increased productivity in the workplace and increased consumption. “If the local football team does well, you are happier,” Dr. Davis says and “ … that happiness will then translate into either you being more productive at work – you go in on Monday, your team having won and you do a lot better job – or you consume more.” The study claims that the income increase is not focused on companies that are directly linked to the winning team. “What [the study is] looking at is the more general impact of people going to business that have nothing to do with the sports team. So nothing to do with the Chiefs, just a company that is headquartered in Kansas City is going to have a lot of Chiefs fans as employees.” Increased productivity of so many fans translates to a small economic boom for the city.
Despite the positives which come out of a Super Bowl win, Dr. Davis says that the positives of being an NFL teams headquarters are usually outweighed by the negatives. He states that the overall net impact of housing an NFL franchise averages out to zero, due to factors related to building a stadium and the negatives associated with having an unsuccessful team. A winning team is slightly better than not having an NFL team at all, but the drain caused by a losing team outweighs the positives of a good team.
Dr. Davis’ analysis dates back to Super Bowls which occurred over fifty years ago. The study includes variables such as the per person per capita income of metropolitan area residents in which championship Super Bowl teams have been headquartered (adjusted for inflation since the study dates back to 1969), construction of stadiums, success in playoffs, and percentage of in season wins. Dr. Davis also studied the economic impacts on the city which hosts the Super Bowl and found that there is nearly no net economic impact on the host city. The study also considered NFL impacts versus those associated with championship National Basketball Association (NBA) teams and Major League Baseball (MLB) teams.
Dr. Davis’ study is titled “A Winning Proposition: The Economic Impact of Successful National Football League Franchises,” and has been published in the Economic Inquiry (Vol. 48, No. 1, January 2010, 39-50).
Kansas City Chiefs victory parade in Kansas City on 02/05/2020. Photo credit to Kevin Hardy - the Kansas City Star.