Super Bowl XLIX adds $205 million to Phoenix region

30 January 2015 Consultancy.uk

Each year the unofficial holiday known as “Super Bowl Sunday” kicks off in the US, and is globally known to be most watched event in America. This year is expected to be no different, with the 1st of February slated by PwC to be another winner, this year for the Greater Phoenix Area, with an estimated $205 million touchdown in Direct Spending. This is the first of a number of high profile events to be held in the Arizona.

The Super Bowl every year creates considerable excitement among people from all over the world. In America it holds the record for the most watched television event, with 111.5 million tuning into to the 2014 event. This year the contest between the rival football ‘conferences’ (formally rival football leagues), the AFC and NFC, to decide the National Football League (NFL) will take place in at the University of Phoenix Stadium in Glendale, Arizona.

Super Bowl

In an economic impact analysis of the event by PwC, the benefits of the event on the Greater Phoenix Area has been estimated to touch down at a near record high of $205 million. The number includes direct spending by businesses, visitors, and media. The breakdown of the spend is on lodging, transportation, food and beverage, entertainment, business services, and other hospitality and tourism activities. The analysis is “proprietary” in so far as it reflects the unique characteristics of the year’s event, including participating teams, local market attributes, national economic conditions, and scheduled corporate and other ancillary activities.

The positive effects of the event for the area will in reality be considerably larger since the analysis does not take into account “multiplier effects,” producing “indirect” impacts from, for instance, company's purchase of goods from local producers and manufacturers, and “induced” impacts, which involves the income increase of workers, which is circulated through the local economy.

“This year’s projection is the second highest on record, however the inflation adjusted result is approximately 2% lower than our estimate for Arizona’s last Super Bowl in 2008; the market benefiting that year from pre-recession spending levels and a slightly higher profile game matchup involving a New York market team and the Patriots attempt at a perfect season,” says Adam Jones, director, sports and tourism sector, PwC US.

Super Bowl - Estimated Direct Visitor Spending

Events in Arizona
The Super Bowl is only the start for the Phoenix market, with an “unprecedented series of mega events” to run over the coming three years. The series of events includes the CFP Championship in 2016 and NCAA Final Four in 2017. These events signal, according to PwC, that the “Arizona’s coming of age as a special event destination capable of hosting not only its recurring annual calendar of activity, but rotations of the country’s most high profile events.”

Jones further notes: “This year, Super Bowl week will offer a unique test of the market’s maturity as it also hosts the annual Phoenix Open golf tournament over the same week, an event that has continued to increase in scale and impact since the market last hosted the Super Bowl in 2008.  While crowding or displacement effects are possible, their effects are likely to be mitigated by the market’s increased hotel supply, air access, light rail system, dispersed geography, and other attributes associated with a well-established winter tourism destination.”

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Champions League glory hard to buy for football’s economic elite

15 March 2019 Consultancy.uk

The thrills and spills of knock-out football can still be one of the sport’s great levelling forces, with the Champions League’s second round having shown that the biggest spenders aren’t always able to buy their way to glory. While a league format broadly favours the squad depth of the beautiful game’s richest teams, half of the tournament’s wealthier teams exited in the first one-on-one elimination round.

As the Champions League burst back into life in February, following an agonising winter break, only two of the 16 teams re-launching their Champions League last-16 bid were from outside the so-called Big Five football leagues. With the exceptions of Portuguese champions FC Porto and Dutch footballing powerhouse AFC Ajax, teams from the world’s biggest spending leagues monopolised the second round. As outlined by analysis from KPMG’s Football Benchmark, the Premier League was represented by four teams, with three clubs come from La Liga and the Bundesliga respectively, while Serie A and Ligue 1 both retained two clubs.

This followed a grimly predictable group phase, which had seen the two most expensive squads progress in all but one of the eight collections of four teams. The one team to buck that trend, Ajax, had last won Europe’s premier club competition in 1995, but those halcyon days have long since faded into memory, and Ajax had failed to progress beyond the group stage in 13 years. With the second youngest squad in the tournament, what now seems to be an awakening football giant had some shocks in store for the second round too.

Group Stage values

Despite an impressive Europa League run which saw the team reach the final two years ago, Ajax had not progressed in a Champions League knockout stage tie since the 1996-97 campaign. That all changed this time, as Erik ten Hag’s men overturned a first leg deficit to trounce Real Madrid 5-3 on aggregate. Having felt hard done by in a 2-1 defeat at the Johan Cruijff ArenA, the Amsterdam club cruised to a 4-1 victory at the Santiago Bernabéu, a result which saw the tournament’s fourth most expensive squad crash out to the third cheapest remaining team.

The supremely expensive team, which had won three Champions Leagues on the trot, had crashed out in spectacular style. For many footballing purists, the end of the seemingly invincible Galacticos would have been enough to restore some of their faith in the sport – but there would soon be more schadenfreude to revel in, as a succession of Europe’s most bank-breakingly costly teams would soon join Los Blancos in their exit.

The pick of the bunch was unquestionably Paris Saint-Germain, who forfeited a 2-0 first leg advantage to somehow crash out of the Champions League. The team, who are fast becoming known as the foremost bottlers in Europe, faced a grim dissection in the French press following a 3-1 defeat by Manchester United at Le Parc de Princes. While it would be over-egging it to paint United as ‘giant killers’, the Red Devils squad is worth markedly less than the club bankrolled by Qatari oil money. PSG hold two of the most expensive players of all time in French World Cup winner Kylian Mbappe and Brazilian playboy Neymar.

Second Round values

Elsewhere, the round’s cheapest squad proved further that money is not everything, as Porto overcame Roma (the Italian club has since parted ways with manager Eusebio Di Francesco in the wake of this humbling) – while Juventus battled back to beat Atlético Madrid. The most ‘balanced’ tie of the round, there was a squad value difference of only €22 million between the two squads, in favour of the Spanish giant. With that being said, €113 million of Juve’s price-tag came from the summer acquisition of Cristiano Ronaldo. Ronaldo’s tie-settling hat-trick went to show that money spent in the right place ultimately makes the difference.

Spending wisely

At the same time, there were also four teams which lived up to their large price-tags. Manchester City pummelled Schalke over the course of two legs, hammering the German team 7-0 in the second game. With the largest squad market value in the tournament, the Citizens showed that their spending had not merely been a frenzy provoked by having large amounts of money to throw about – a la PSG – and that every penny had in fact been used to craft one of the continent’s most well-balanced and dangerous teams, to ultimately contend for the title.

Tottenham Hotspur similarly brushed off Borussia Dortmund, while Liverpool eventually overcame Bayern Munich, to leave no German teams in the tournament. Meanwhile, Barcelona similarly did for the French contingent of the Champions League, bundling out Olympique Lyonnais 5-1.

Operating Revenues

Going forward, the humbled economic superpowers of European football will take solace from the fact that their huge operating revenues will allow them to buy up talent which has emerged in this year’s Champions League. With Real Madrid having re-installed Zinidine Zidane as Head Coach, the club has already committed itself to spending big in the summer, cashing in some €50 million of its €743 billion revenue stream from last year to sign Éder Militão from Porto – who has impressed in this year's Champions League – in the summer.

Whether the PSG project is financially sustainable in the long-term remains to be seen, meanwhile, but with a huge portion of commercial revenues including shirt-sales from the club’s array of superstars, it will likely also seek to bring in more big names in the summer. The club was reportedly in the running to sign Ajax star Frenkie de Jong, before Barcelona finally secured his services from the end of the season.

The likes of Ajax will meanwhile face an uncomfortable wait, as a range of its new crop of outstanding players inevitably attract the attentions of Europe’s top spenders. With the lowest operating revenues of any team left in Europe, the club will face an uphill struggle to hang on to the likes of teenage captain Matthijs de Ligt. However, it would not be the first time that the club has been plundered for its top talent, and what Ajax and clubs of its size can take forward is that with the right eye for lower-key recruitment, they can rebuild, and still challenge Europe’s elite.