Who
Really Benefits From March Madness
Greg
Geanon
March Madness is one of the most
popular sporting events in America; over 60 million people will fill out a
bracket, and attendance at last year’s tournament was nearly 800,000. There is
a lot of interest in March Madness, and while people enjoy the entertainment
they get from watching their favorite college teams play, the real winners in
all of this are the NCAA and the colleges themselves.
With so
many people watching March Madness, competition for broadcasting rights for the
tournament is high. The current television deal was signed in 2011 and will
last until 2024. A fourteen year deal, CBS/Turner paid $10.8 billion which
comes out to about $740 million per year. According to Investopedia, “More than 90 percent of the NCAA's operating revenue is derived from this tournament alone. Unlike the
championship games in college football and baseball, the NCAA does not have to
split its revenue with any corporate sponsors.” As a result of this setup, the
NCAA not only makes hundreds of millions of dollars, but there is plenty of
money left over to give to the colleges.
Money is
split up among the athletic conferences based on their performance in the
tournament over a six year rolling period. For each game a school participates
in, they receive one basketball unit. With the new television deal, basketball
units in 2011 were worth approximately $256,000 dollars, and roughly $190-200
million was handed out to the athletic conferences that year. As the conferences
are paid based on each game played by a school in its conference, this system
rewards conferences that either send several schools to the tournament, or have
schools who win multiple games. Over the past several years, the most
successful conferences have been the Big East, the Big 12, and the ACC, all of
them earning over $75 million over five years from 2006-2010. This translates
to millions of dollars for the schools in each conference, as the conferences
tend to divide the money equally among all the schools in the conference.
Successful tournament runs and the prize money earned can go a long way towards
building new facilities, paying for scholarships, and drawing in top level
recruits, all of which are necessary if they wish to remain successful.
However, the
benefits of a successful March Madness tournament don’t only come down to the
money earned from broadcasting rights or prize money. When teams are
successful, boosters and alumni tend to donate more money. Ticket sales go up
in the following seasons, and merchandise sales skyrocket. Schools who might
not normally receive a lot of publicity are suddenly household names as they
upset larger, more well-known teams. Butler, who went were consecutive national
runner-ups in 2010 and 2011 experienced a 41% increase in applications after
only their first appearance in the national championship game.
While the
schools who are successful benefit greatly from March Madness, smaller schools
who don’t make it in also are at a significant disadvantage when it comes to
money and publicity. One of the ideas the NCAA is considering is expanding the
tournament to 96 teams. More teams means more games, which ultimately means higher
broadcasting fees, guaranteeing even more money being made by the colleges and
the NCAA.
Works Cited
I did not know that school's made that much revenue from investing their time and hard work to make the tournament. It makes sense that more people would want to apply to a school that made it far in the tournament, but I didn't think the turnout was that immediate. If the NCAA were to increase the tournament to 96, it would probably only mean good things, seeing as more schools would be in, and then more schools would be able to reel in that extra money. Another point is if they were to bring in more schools, what would be the point where the profit didn't match the money invested, and entering too many teams would be a waste of time.
ReplyDeleteThe tournament brings in an insane amount of money with good seats going for $2000 and then the concession prices through the roof. I agree that increasing the tournament's number of teams participating will benefit several schools with publicity and revenue, but this means that the tournament will exceed just March. This is March Madness right? I was already furious that the tournament went into April this year; with more teams the tournament will surely go longer. Even though I am furious, I can bring up the huge competition there is to get a game hosted in their stadium. Bringing people to their town will be very beneficial to their economy.
DeleteI had an idea of how much revenue March Madness brings in to schools and other companies, but I didn't think it was that much. I know so many people, including myself, that fill out the march madness brackets on ESPN which must get so much revenue from those brackets. They also cover the entire March Madness tournament so they must get revenue for their coverage. I know that college players aren't really allowed to get paid for their playing, but they must receive so much free gear from companies like Adidas and Nike during the March Madness that it almost is like borderline getting paid. Not only do the playing receive something in return, but those companies are able to advertise their company and get revenue too. Almost everyone benefits from March Madness, even the viewers who may pay for things, still get to enjoy the game.
ReplyDeleteI haven't even thought that the Tournament brought in that much money. I figured that big sporting companies like ESPN and CBS sports got a lot of money for broadcasting the games and the Bracket competitions but it's interesting that the schools make that much money. If the size of the Tournament would increase, it would benefit not only the players who get to live out their dreams of playing but it would benefit by bringing in more money
ReplyDeleteIt's crazy to think how much money the universities make from making the NCAA tournament. I can only imagine how much money Florida Gulf Coast University had made from the tournament last year. They were a school that most people have never heard of before, and not only are they well known, but they are living off of the reputation of being a Cinderella who made it to the Sweet 16. The school had about a 25% increase in applications to attend the university. It helps the schools so much as a result.
ReplyDeleteYou brought up Florida Gulf Coast as an unknown school that reeled in tons of cash, and now think about Dayton, Ohio. Dayton is a team that is unheard of and now part of a Cinderella story. Teams like these two happen every year and if the Tournament increased even more Cinderella story teams would be born.
DeleteThe amount of money universities make because of the NCAA tournament is insane. It brings up a point how much money Cinderella teams during the tournament make. It does feel good as a future student of University of Wisconsin-Madison, that they will be making more money because of there run. Another question this brings up is how much money football teams make for making the Rose Bowl, or the National Championship. Overall though this is a good benefit for the school, and gives people an idea on why schools give so much priority for recruitment.
ReplyDeleteIt's crazy to think how much the schools are bringing in, none of which the students see. Although many receive scholarships, some come from poor families in which they can't pay for many of the essentials at school. The perfect example was Shabazz Napier, the point guard for the Huskies who won the tournament. He received nothing from the NCAA, came from a poor family, and went to bed hungry. It seems ludicrous that a student athlete, like Napier, who helped raise millions for the school never seems a dime for his excellence and fundraising ability.
ReplyDelete