NCAA Tournaments Effect on the Economy
We are
all fresh off of all the action of the NCAA tournament with Wisconsin going all
the way to the final four. The NCAA tournament is something that we all love to
enjoy whether it be by rooting for our favorite team or filling out a bracket.
This begs the question of how does the tournament effect the economy? There are
both pros and cons to the tournament. One fact that struck me as odd was a fact
that we don’t think about. Nearly one third of people watch the games while at
work and 86 percent of people will check scores while at work. 1.2 Billion
dollars are lost each hour from people stopping work to watch games and or
happening to get “sick” during the tournament. You have to keep in mind that
these people may find other things to slack off on instead of watching the game
but the amount of lost work is a definite negative externality to those
businesses. Also another con of the tournament includes the heated debate that
players do not get paid for the tournament. This poses the question of are
other NCAA personnel being free loaders on the talent of the players? The
NCAA tournament alone makes 1 billion dollars per year which is more than the
entire NFL post season made. With all that the NCAA makes you would think that
some would be left over for the players.
The NCAA tournament also has many positive effects on the
economy. For example in addition to the revenue that is made through ticket
sales and television commercials, other more city based income is made. For
example, hotels and restaurants seek the benefits of people coming into the
cities to see the games. Also for cities not hosting games, if a team makes it
to the sweet 16, 28 percent of fans will spend $100 or more on things such as
hats and shirts. Another positive effect on the economy believe it or not is
made through the upset games or bracket buster games (RIP Danny’s 2014
bracket). Every year there are a few games that no one would have ever
predicted would occur. For these schools that are able to pull of such a
miracle, their school gains a great amount of publicity. Schools like Florida
Golf Coast who no one had ever heard of in the past now will be schools that
students will want to enroll in.
All in all when you look at all of the positive effects the
tournament has in regards to travel, tickets, and school memorabilia the marginal
benefits of the tournament out way the marginal costs. So to all
those people who are checking your phones under the desk or taking an extra
long lunch break, while you may have a slight negative impact on the economy,
overall you are helping the economy grow. Without you fans, commercials would
not have success and neither would all other institutions that benefit from the
games.
http://www.marketplace.org/topics/business/freakonomics-radio/how-much-tv-money-does-march-madness-make
Bibliography
"The Economics of March Madness: The Tourney May Not
Hurt the Economy as Much as You Think." www.newrepublic.com . N.p.,
n.d. Web. 7 Apr. 2014.
<http://www.newrepublic.com/article/117045/economic-costs-and-benefits-college-basketball-ncaa-tournament>.
The NCAA tournament bring in a lot of money for the colleges in the tournament. The thing is though is none of the players get or see any of that money that the colleges make. I think that they should at least get paid for them making it in to the tournament win or lose.
ReplyDeleteI never thought that the NCAA March Madness would effect the economy, but now learning from your post, i clearly see how the economy is effected. I didnt know that none of the players got paid for this tournament. That is very interesting to think about, also what was shocking to me was that the NCAA made more money than the Superbowl made. The positive effects the tournament has in regards to travel, tickets, and school memorabilia the marginal benefits of the tournament out way the marginal costs. Is also another interesting point. I also think that's interesting how a team from a school no one has heard of before is doing well, that all of the sudden that school becomes the new big thing, that everyone wants to go to.
ReplyDeleteDanny, first of all, great job on your article. After reading it really is amazing to hear how much they make. Like 1 billion dollars just in colllege basketball, that is a large amount of money, showing that it makes more than even professional things. Everything you said in your article is so true, the benefit far outweighs the cost of the whole tournament and benefits many..except for the players themselve. After reading into your article I feel that while paying college athletes is 'illegal' they should alteast be able to have their tuition reduced, due to the fact that they have a surplus of classes that they have to make up for when playing and being gone that long. Even with your state stuff, im part of that 28% I would totally buy something new for our state! Overall great job on your article!
ReplyDeleteI find it comical how often people are found to be slacking off when it comes to tournament time. I believe that people take it a little too seriously. However I can't comment much because I find myself slacking off in school all the time to catch up on the latest action. The economy positive extranalities from this event are huge though. The amount of money that these areas hosting games bring in is ridiculous and it is definitely a boost if you are selected to host a game.
ReplyDelete1000 Million dollars for an advertisement. Wow, and I thought the NFL charged a lot. All for a tournament that lasts a few weeks. It is incredible too, and this isn't professional, this is the NCAA, not the NBA. I always knew it had a negative effect on the economy, but I wasn't aware the positive effects were of this magnitude, nor did i know the players didnt get paid. Also it is a free was to put your name out there, if your college does well, free influx of students the next year. Incredible how one tournament can effect the economy.
ReplyDeleteWow I never knew how much revenue college sports made, or how much income it produces. The fact that the college athletes can't get any financial benefits for generating that income to me seems unfair I think they should at least be able to have their college expenses lessened (tuition). It seems to be like they are punished for making that revenue since they have to make up classes they might have to miss or the time and get no return (at least in the beginning) for the time and effort they give for their school.
ReplyDeleteI do think it is unfair for the players to be unable to earn money for their talent, their schools earn millions of dollars, and they don't see a penny of it, but its legal for the coaches to earn at least 6 figure contracts, paid by tax payer dollars. I feel bad for the fans who have to pay for their rival coaches salary.
ReplyDeleteI knew that March Madness gets a lot of people excited. But I never realized how much it affects the production of a job. It is fascinating that it costs a lot of money for a lack of production and slacking off on work. I knew that March Madness gets a lot of attention, but there is a cost for those slacking off, the decrease in initial benefit of products and projects are done than watching NCAA tournament. Because of the decrease in projects being done, the revenue of the company goes down, so the popularity of the product goes down.
ReplyDeleteI never knew that March Madness made that much money but I had a feeling it always did well. I can't believe it makes more money than the superbowl, or the whole NFL post season combined. I have to say I really enjoy watching all o the games and my productivity to school goes down during that week. I can't imagine in the business world how many people take off to enjoy the games. A billion dollars of income from the tournament is a ton of money.
ReplyDeleteMarch madness is the BOMB.com. With the amount of revenue brought in and the enjoyment the tournament brings, there is no doubt that the marginal benefits outweigh the marginal costs by a mile. The time spent watching will not make a difference in the course of an individual business over a long period of time and after March, they will resume normal operations.
ReplyDeleteI just saw an article on ESPN recently that talked about how much money JUST the Dallas Cowboys stadium brought for the Final Four only and the numbers were through the roof. 80,000 people were at every single game, which broke an NCAA record, and plenty of food and memorabilia was purchased as well. If just the Final Four can accumulate millions and millions of dollars, the entire tournament makes a jaw dropping amount. It is amazing how a month of basketball can help the economy grow, and there is absolutely that will stop that from happening. No matter what, people are always looking forward to next March.
ReplyDeleteI feel like the benefits for the NCAA March Madness tournament are WAY greater than the downsides. Think about it. The NCAA Tournament makes more money than the super bowl. The Super Bowl of America's #1 watched sport. Its crazy to think about the profit because its so huge. Not only do advertizes gain financial profit but also the cities of the successful teams. The benefits most certainly outweigh the cumulative loss of money due to lazy workers.
ReplyDeleteThis was an interesting article! March Madness offers so many benefits for the United States. Not only does it bring people together for fun, but also brings lots of revenue. The marginal benefits are far higher then the costs, which makes the NCAA tournament very important. It was also very cool to see how much the final four alone made.
ReplyDeleteClearly the economic benefit of the NCAA tournament is great for all those involved. It is staggering that the NCAA tournament brings in more revenue than the entire NFL playoffs including the biggest U.S. sporting event, the Super Bowl. Schools get great publicity and student athletes are able to showcase their skills on the biggest of stage's. However, on negativity externality could be the knowledge lost by student athletes because of course they are unable to attended classes during the tournament.
ReplyDeleteI found the statistic that 86% of people check the game scores at work. I am one of those people. At my work, we had the TV on and I kept walking past the TV to check scores. I didn't think about the fact that it was probably affecting my work performance. I made my first bracket and was consumed in the madness. This did not only affect people at work, but also at school. One day in math, my teacher noticed everyone watching the games and based the lesson off of the games and made it much more interesting. The march madness games have an impact on people's lives for a month out of the year and change the whole economy.
ReplyDeleteI could not believe that the NCAA tournaments bring in more money than the super bowl. When you think about it though, it does make sense. I mean the super bowl is just 1 game for a couple of hours compared to Match Madness which is stretched over a long period of time. It is funny to think that 1/3 of all working people watch the games, which when added to over 1.2 billion dollars lost is a huge negative externality that I cannot believe. I could see how kids and teenagers would be into the brackets, but never the adults. From the number that you showed us, if March Madness brings in about 1 billion dollars, but the economy loses about 1.2 billion dollars to people watching the games at work, isn't that bad. There seems to be no gain. Anyway, I’m not a basketball player but I enjoy watching it. Overall great post. It really got me thinking what is going on out there.
ReplyDeleteI found it intresting that a large sum of revenue such as 1.2 billion dollars is lost to somthing as simple as sports. Iv never gotten into the march madness myself but i have seen the affect its had on people there entire lives consumed by their brackets. I can see how it would negitively affect their workload. but the fact remains that the publicity and the attention that schools gain through the tournaments is huge. so ncaa has both positive and negitive impacts on the economy.
ReplyDeleteThis was a really good choice in topic considering the amount of popularity the NCAA tournament has among all ages. It is clear that the tournament brings in a large fan base. Even as a student, there were some teachers that were willing to spare a couple minutes of class to catch a quick glimpse of the Badger game, or whatever team was currently well-liked. I feel like though there were some small negative externalities brought on by the tournament, the positive externalities far outweighed them.
ReplyDelete