Proposed major events fund in budget would help cover Super Bowl costs
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The proposed state budget includes $30 million for a new fund that would help attract major events in Arizona, and an as-yet undetermined chunk of that cash will help cover the costs for the state to host the mother of all major events: the Super Bowl.
One of the budget bills currently stalled out at the legislature includes funding for a Major Events Fund that would be overseen by the Arizona Commerce Authority. The budget plan calls for $7.5 million in annual funding for four years, which the ACA would use to “support the planning and operation of the competitive bid process for major events,” to issue grants to organizing committees for major events and to cover “other economic activities associated with major event operations.”
Those major events could be any number of things, said C.J. Karamargin, a spokesman for Gov. Doug Ducey, ranging from NCAA basketball tournaments, Major League Baseball all-star games, presidential debates and other things.
But some of the funding will be used to help pay the costs of the 2023 Super Bowl, which will take place in Glendale at State Farm Stadium.
Karamargin said it hasn’t been determined yet how much of the money will go toward the Super Bowl. The game is scheduled for Feb. 12, 2023, the second year of the fund, meaning a maximum of only $15 million will be available in the fund.
Statutory language in the budget limits Major Events Fund grants to 25% of the total expenditures required by the contract between the host organization and the local organizing committee. In the case of the Super Bowl, that contract would be between the National Football League and the Arizona Super Bowl Host Committee.
The host committee for the last Super Bowl that Arizona hosted, in 2015, had a budget of nearly $30 million. The budget that the committee proposed when it won the bid to host the 2023 Super Bowl was $50 million to $60 million, according to David Rousseau, the committee’s chairman. That covers a host of obligations, including public safety and the cost of events and other entertainment.
Some funding comes from cities — the host committee is looking to raise about $6 million from cities that receive funding from a 1999 ballot initiative that provides funding to promote tourism in Maricopa County — while other monies come from private sector businesses. As the home team for the host city, the Arizona Cardinals contributed more than $1 million, Rousseau said.
But, as evidenced by the doubling of the budgets for the 2015 and 2023 Super Bowls, the cost of hosting the game keeps climbing. Rousseau said the Major Events Fund will help Arizona compete for future games. He noted that the Commerce Authority helped pay some of the costs for the last host committee.
“There’s other markets that are more than happy to open their checkbooks, and most markets that have hosted a game that I’m aware of have some sort of public funding mechanism,” Rousseau said. “The only way they certainly will ever come back is if we fulfill the bid and deliver on that promise.”
Karamargin also emphasized that, while the fund will help pay for the upcoming Super Bowl already awarded to Arizona, the Major Events Fund will help accomplish the goal of attracting future Super Bowls. He called the fund part of a large-scale effort to attract other major events — sporting and otherwise — to Arizona.
The 2015 Super Bowl had an economic impact of about $720 million on the Valley, according to a study by Arizona State University’s W.P. Carey School of Business. Rousseau said host committees also use the Super Bowl to showcase Arizona to business leaders from around the world who either have business interests in the state that they could expand or could potentially bring new economic development here.
“We want to be in a position where these types of events — these mega events that draw national, sometimes international attention in Arizona and that can lead to hundreds of millions of dollars in economic activity — we want to make it so these events are more of a regular thing. They are major drivers of an economy, but they don’t just happen. They are the result of planning and dedicated staff,” Karamargin said.
For the Major Events Fund to become a reality, the budget needs enough support to pass out of the legislature. That support has been lacking thus far, though for reasons that have nothing to do with the proposed fund.
Debate over the budget has largely centered on big-ticket items such as a proposed $1.9 billion annual tax cut, $12.8 billion in overall spending and a number of other issues. The Major Events Fund has, for the most part, flown under the radar.
Some critics, however, have taken notice. One is Sen. Michelle Ugenti-Rita, R-Scottsdale, who questioned why the state should spend so much taxpayer money to cover costs that should be borne by the private sector. She suggested that the $30 million could be put to better use elsewhere.
“We’re a great market. People are moving here. People are enrolling their kids in school here. We’re growing,” Ugenti-Rita said. “So, we’re a really attractive venue for entertainment options, whether it be sports or live music, concerts, that kind of stuff. Arizona has a lot to offer and we can stand on our own.
“I don’t know that we need to create a slush fund for any sports entity or program or tournament to draw down from.”
Adding to Ugenti-Rita’s consternation is the financial boosts the legislature has already given Arizona’s professional sports franchises this year. Ducey signed a law in April legalizing sports wagering in Arizona, with half of the maximum 20 licenses offered by the Department of Gaming reserved for professional sports franchises and operators of other major sporting events, like the Cardinals, Phoenix Suns and the Professional Golf Association.
Another new law would allow for the creation of a special district that the Arizona Diamondbacks could use to finance hundreds of millions of dollars’ worth of renovations to Chase Field by bonding against revenue from a new sales tax on tickets, as well as food and merchandise in the ballpark.
“I don’t know how much more the taxpayers need to do to lift up our sports teams,” Ugenti-Rita said. “Now they want taxpayers to fund costs associated with putting on sporting events.”
Rousseau emphasized that the state benefits as a whole when Arizona hosts events like the Super Bowl by generating economic activity and development. He reiterated that Arizona’s competitor states use public funding to attract and host major events, and some have more generous programs than the one proposed in the budget.
He called the Major Events Fund a balanced public-private partnership.
“We certainly have private sector participation, but I think there’s a public benefit that accrues that’s appropriately funded by the public sector,” Rousseau said.
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