HigherIQ — Friday, January 30, 2026

Good morning, Happy Friday, and welcome to your HigherIQ briefing. On this day in 1969, the Beatles climbed onto the roof of their Apple Corps building in London and played together in public for the last time. No announcement, no tickets sold—just four guys on a rooftop, playing until the police showed up to shut it down. The whole thing lasted 42 minutes. And 57 years later, we're still talking about it. There's something about a live performance that sticks with people, which got us thinking about all the big performances headed our way: The Super Bowl is ten days out in Santa Clara. The World Cup kicks off in June—16 cities across the U.S., Mexico, and Canada. The Winter Olympics start next month. Everywhere you look, city officials are throwing around numbers like "billion-dollar economic impact" and "thousands of jobs created." So today, instead of bouncing through five or six different stories, we wanted to do something a little different. We're going deep on one question: do these mega sporting events actually deliver what they promise? Fair warning—this one's longer than usual, But we've chunked it out so you can skip around if you want. Here's the gameplan: we'll start with the Super Bowl and what the research actually shows. Then we'll look at the Olympics—spoiler, it's not pretty. Then the World Cup and what it means for U.S. host cities. After that, we'll break down who actually wins—hotels, Airbnbs, restaurants, local businesses—and who gets left behind. And we'll wrap up with why cities keep doing this even when the math doesn't work. What we found is kind of wild. The academic research tells a completely different story than what you hear from mayors and tourism boards. One economist called those big impact estimates—and we're quoting here—"bat-shit crazy." This is a bit of an experiment for us—going deep instead of wide. So if you love it, hate it, or want more of this kind of thing, let us know. We're always trying to get better. Let's get into it. Let's start with the Super Bowl, since it's the most immediate. Super Bowl LX lands at Levi's Stadium in Santa Clara on February 8th. The Bay Area Host Committee is projecting somewhere between $370 million and $630 million in economic impact. That sounds enormous—until you talk to the economists who actually study this stuff. Victor Matheson is a sports economist at the College of the Holy Cross who's spent decades researching the financial impact of mega sporting events. His assessment is striking: when you look at actual data from past Super Bowls—not projections, but measured economic activity—host cities typically see an increase of $50 to $150 million. That's not nothing, but it's a fraction of what boosters claim. His rule of thumb, which he shared with the San Francisco Chronicle? Assume the real impact is about 10% of the headline number. Why the gap? First, there's the substitution effect. Cities don't exist in a vacuum. When 90,000 Super Bowl visitors flood into the Bay Area, they're not all adding to the economy—many of them are simply replacing the regular tourists who would have been there anyway. Hotels were going to be booked regardless. Flights were going to be full. The question isn't how much money Super Bowl visitors spend—it's how much more they spend than whoever would have visited otherwise. Second, there's what economists call "crowding out." Regular tourists actively avoid host cities during mega events. Prices spike, crowds swell, and people who might have planned a normal trip just... don't come. During the 2012 London Olympics, the British Museum saw 22% fewer visitors. The British government's own post-Games evaluation admitted there was "substantial displacement of regular visitors who were deterred by the potential for overcrowding, disruption and price rises." At the 2002 Salt Lake City Olympics, hotels gained about $70 million—but general retailers lost $167 million. The net effect was essentially zero. Third—and this is the one that really matters—the studies that produce those eye-popping numbers are almost always commissioned by people who have a stake in the outcome. Host committees, tourism boards, the NFL itself. A few academics have noted, pretty bluntly, that most economic impact studies "are commissioned to legitimize a political position rather than to search for economic truth." The NFL, it's worth noting, is the Super Bowl's biggest winner by far. They collect the broadcast rights money—NBCUniversal pays roughly $2 billion a year for their NFL package. They collect the advertising revenue—30-second spots cost about $8 million this year. And they negotiate exceptionally favorable terms with host cities. When the Minneapolis Super Bowl bid book leaked a few years ago, the phrase "at no cost to the NFL" appeared scores of times throughout the document. Here's a specific example from 2016, when Levi's Stadium last hosted the Super Bowl. A research firm called Sportsimpacts estimated the total regional economic impact at $240 million. But here's the catch: Santa Clara—the city that actually hosts the stadium—captured only about 7% of that benefit. San Jose got 12%. San Francisco, which doesn't even contain the stadium, pulled in 57%. The pattern is consistent: the benefits flow to whoever has the most hotels, restaurants, and entertainment options nearby. The costs—security, transportation, sanitation, street closures—fall on whoever hosts the venue. If the Super Bowl is questionable economics, the Olympics are worse. Researchers at Oxford, led by a scholar named Bent Flyvbjerg who studies megaprojects, found something remarkable: the Olympic Games have a 100% cost overrun rate. No other type of megaproject—not dams, not IT projects, not highway construction—has that level of consistency. Every single Olympics since 1960 has gone over budget. The average overrun? 179% in real terms. In nominal terms, it's 324%. Some specific examples. Montreal 1976 came in 720% over budget and took the city 30 years to pay off the debt. Rio 2016 was 352% over budget. Tokyo 2020 was 128% over. A University of Kentucky analysis found that 13 of 23 Olympic host cities experienced cost overruns exceeding 100%. Only one Summer Olympics in modern history has actually turned a profit: Los Angeles in 1984. And that happened only because no other city wanted to bid after Montreal's disaster, which gave LA enormous leverage to negotiate favorable terms. They used existing stadiums, lined up corporate sponsorships, and basically ran the whole thing as a private operation. The surplus was $215 million. The success of LA 1984 created a perverse incentive. Suddenly cities started competing aggressively for the right to host, allowing the IOC to choose whoever promised the most extravagant facilities. The bidding process itself costs $50 to $100 million. Tokyo spent $150 million just on its failed 2016 bid. And what about those gleaming new stadiums and infrastructure? They become what economists call "white elephants"—expensive facilities that cost millions annually to maintain but generate little return. Beijing's Bird's Nest stadium costs an estimated $10 million a year in maintenance. South African World Cup stadiums built for 50,000 fans host events totaling under 200,000 visitors per year. A stadium in Manaus, Brazil, built for the 2014 World Cup, is now literally used as a bus depot. Which brings us to the World Cup—the biggest of them all. Sixteen cities across the U.S., Canada, and Mexico are hosting matches this summer. The final is at MetLife Stadium in New Jersey. The projections are massive. FIFA claims the 2026 tournament will generate $40.9 billion in GDP across North America, with $17.2 billion for the U.S. alone. Individual host cities are projecting anywhere from $500 million to $2 billion each. The historical record is less encouraging. According to analysis from the Institute on Taxation and Economic Policy—a nonpartisan research group based in DC—twelve of the last 14 World Cups since 1966 have resulted in financial losses for host countries. The last three tournaments have averaged a negative 31% return on investment. Brazil 2014 is the most stark example. Public investment ran somewhere between $10 and $15 billion. Total revenue generated was about $5 billion. Hundreds of thousands of Brazilians protested in the streets as austerity measures cut funding for education and healthcare while stadium construction continued. Four of the twelve World Cup stadiums were built in cities that didn't even have a team in Brazil's top soccer division. South Africa 2010 told a similar story. The country spent about $3.5 billion hosting the event—over ten times what FIFA actually invested. Government estimates later revealed they only recouped about one-tenth of the money spent. A study published in the Journal of African Economies calculated that South Africa attracted only 220,000 extra tourists from outside the southern African region. When you run the math, that works out to about $13,000 in public spending per additional tourist. Here's the uncomfortable reality: even tourism—the supposed guaranteed benefit—often disappoints. Research published earlier this year in The Conversation, summarizing decades of academic studies, found that out of 18 hosting countries analyzed, 11 saw tourist numbers actually decline in the four years following their mega event. The 2026 World Cup does have one thing going for it: the U.S., Canada, and Mexico already have the infrastructure. The stadiums exist. The transportation networks exist. No one is building white elephants in the Amazon. These are working NFL and MLS venues that host games, concerts, and conventions year-round. But even with existing infrastructure, the costs add up. According to reporting in The Independent, U.S. host cities are facing a collective shortfall of at least $250 million. FIFA requires host cities to provide office space equipped with state-of-the-art amenities—free of charge. They demand sales tax exemptions on tickets. Missouri alone is foregoing an estimated $11 million in tax revenue just for the six matches in Kansas City. And then there are FIFA's exclusivity rules. Restaurants and bars can't even hold watch parties using FIFA's name or imagery. Local businesses are often shut out of the areas where most visitors congregate—those zones are reserved for corporate sponsors. One U.S. host committee submitted a promotional poster and got it rejected—because there was a tiny airplane in the background that wasn't the colors of Qatar Airways, FIFA's official airline partner. A tiny plane. In the background. Wrong shade of blue. That tells you everything about whose interests these events are designed to serve. Chicago, by the way, looked at all of this and said no thanks. The third-largest city in America dropped out of hosting contention, citing high costs and questionable benefits. That should tell you something. So if the economics don't work at the city level, who actually wins? Let's break it down. Start with hotels. Yes, they fill up. Yes, rates spike—sometimes 25 to 50 percent above normal. But here's the catch: most of that money doesn't stay local. The Marriotts and Hiltons send profits back to corporate headquarters. The World Economic Forum pointed out something important: hotel prices rise during these events, but wages for service workers don't rise by the same amount. The returns flow to capital, not labor. The hotel owner in another state makes money. The housekeeper working double shifts? Not so much. Airbnb hosts are actually one of the few local winners. If you own property near a venue, you can charge premium rates and keep most of it. That's real money going to real residents. But it's a small slice of the overall pie, and it's concentrated among people who already own property. Restaurants are a mixed bag. The ones right next to the stadium or in designated fan zones? They do great—if they can get in. But FIFA and the NFL often create exclusivity agreements that favor corporate sponsors over local spots. During the South Africa World Cup, local entrepreneurs and small business owners were literally shut out of the areas where fans congregated. Those zones were reserved for official partners. If your restaurant is three blocks outside the perimeter, you might actually see less traffic than usual because regular customers are avoiding the chaos. Retailers often get crushed. Remember Salt Lake City—hotels gained $70 million, but general merchandise stores lost $167 million. People aren't shopping for regular stuff when they're in town for one event. And locals who might normally be out spending? They're staying home to avoid the crowds. The real winners are predictable: the leagues themselves, the broadcast networks, and the corporate sponsors. The NFL collects $2 billion a year in broadcast rights. A 30-second Super Bowl ad costs $8 million. FIFA generated nearly $5 billion from the 2014 World Cup while contributing almost nothing to the actual costs Brazil incurred. Construction firms that build temporary infrastructure win. National hotel chains win. The consultants who produce those rosy economic impact studies win. The typical taxpayer? The small business owner outside the fan zone? The service worker whose wages don't keep pace with the price spikes? They're more likely to break even—or lose. So why do cities keep doing this? A few reasons—and they're not all cynical. First, political incentives are misaligned with economic ones. The officials who "win" the bid get the photo ops and the civic pride. By the time the costs come due, they're often out of office. The benefits are concentrated and visible; the costs are diffuse and delayed. No mayor ever lost an election for bringing the World Cup to town. Second, the intangibles are real, even if they're hard to measure. Civic pride matters. International visibility matters. Being on the world stage for a week does something for a city's identity that spreadsheets can't capture. Los Angeles still talks about the '84 Olympics. Salt Lake still talks about 2002. The problem isn't caring about those things—it's when leaders use intangibles to justify economic claims that don't hold up. Third—and this is the most charitable interpretation—some cities understand the economics perfectly well and decide the tradeoff is worth it anyway. Los Angeles keeps hosting things because they have the infrastructure, the weather, and the appetite. They're not building anything new. For them, the marginal cost is lower than for a city starting from scratch. The question isn't whether these events are worthless. It's whether the people making the decisions are being honest about what they're actually buying. Here's the HigherIQ take. The numbers you'll hear over the next few months—whether it's $600 million for the Super Bowl or a billion dollars for the World Cup—should be treated as marketing, not analysis. The academic consensus is remarkably clear: the measurable economic benefits of hosting mega sporting events are modest at best, and often negative when you account for all the costs. That doesn't mean these events are worthless. Watching the World Cup in your own city is an experience that transcends economics. Civic pride is a real thing. But civic pride isn't a good reason to let public officials hand out tax breaks to FIFA while cutting other services. The smartest approach might be the one Los Angeles pioneered in 1984: use what you've already built, negotiate hard, and don't pretend you're making an investment when you're really just throwing a party. If your city is hosting something big this year, enjoy it. Just don't let anyone tell you it's paying for itself. Stay informed, stay curious, and enjoy your weekend. We'll see you tomorrow