Thursday, March 16, 2017

March Madness in Milwaukee

March Madness in Milwaukee
By Jinda Guidinger
While high school basketball seasons are coming to a close, March Madness has just begun, which means the fourteen cities hosting the NCAA Division 1 Men’s Basketball Tournament are about to make a lot of money.

More than 60 million Americans eagerly fill out their tournament brackets every year, rooting for their favorite teams and believing in the Cinderella teams. Everyone is attempting to complete a perfect bracket and beat the unbeatable odds of 1 in 9.2 quintillion or at least win the pool between coworkers and friends. A total of roughly $9 billion is wagered each year on bracket predictions, of which $7 billion is estimated to be gambled illegally. More importantly, corporate losses due to unproductive workers during the March Madness season tallies up to $1.9 billion. The graph below indicates the impact of March Madness in the workplace.

This year, Milwaukee is one of the fourteen different cities that will be hosting for the NCAA Division 1 Men’s Basketball Tournament. Additionally, 2017 marks the eighth time the BMO Bradley Center will host for the NCAA Division 1 Men’s Basketball Tournament.

Based on data from 2014 when Milwaukee last hosted games during the  NCAA Division 1 Men’s Basketball Tournament, $4.6 billion was profited from just three days of lodging, transportation, food and beverage, retail, and recreation. For this upcoming weekend, over 18,000 people are expected to attend daily for the first and second round games that will be played at the BMO Harris Bradley Center on March 16-18th. Of those people, 6,000 will be staying in hotels. The tournament will also support roughly 1,500 jobs due to an increased demand for workers.

The atmosphere of March Madness is undeniably contagious; however, some Milwaukee locals may experience negative externalities. Games hosted downtown will draw a significant number of people and increase the congestion throughout the city. Residents of Milwaukee and the surrounding communities may avoid downtown due to anticipated crowds. In addition, downtown business workers may find commuting to and from work will take longer. Overall, the crowds associated with these events could cause many local people to spend their disposable dollars elsewhere until the fans leave and the city returns to normal.

Arguably, the high revenue generated by the tournament can be attributed to scarcity. For the 2016-17 season, 351 Division 1 teams competed in men's basketball. Of those, only 64 qualify or are selected to compete in NCAA March Madness. Year after year, people are willing to empty their pockets for a chance to cheer for the team they’re rooting for. Since the tournament is single elimination and only a set amount of seats are available per game, it really could be a “now or never” situation. Also, many basketball fans plan their trips months in advance just to experience the March Madness atmosphere. Considering these factors that make the event so popular, the prices for tickets can be exceedingly high when compared to the cost of an average college game. This year, ticket prices for one day sell for $198, $228, and $270. Yet, the demand for the NCAA Division 1 Men’s Basketball tournament is at an all-time high. After all, March Madness only comes once a year!

Trade-offs are also noticeable in making cost benefits analysis of their March Madness fan experience. For example, by choosing not to attend a game, fans sacrifice the atmosphere, but save substantial money. Those who decide not to splurge on tickets and travel costs may opt to enjoy the games on television. Sports bars will undoubtedly capitalize on the large number of patrons who come out to watch the game. While the National Retail Federation does not track sales related to the NCAA tournament, fans who want to support teams by watching the games in spiritwear will purchase jerseys, T-shirts, and hats.
Opportunity cost comes into play because fans must give up the most desirable alternatives when making decisions, such as purchasing seats higher up because they are cheaper, or opting not to attend the game at all to save money. See the graph below for more information on spending throughout the entire NCAA Division 1 Men’s Basketball Tournament.
For more information on the economic impact of March Madness in Milwaukee, feel free to check out this video.

Works Cited
Athlon Sports, 3/10/16, 8:00 AM EST. "Economic and Social Impact of March Madness (Infographic)." AthlonSports.com. N.p., 3 Oct. 2016. Web. 13 Mar. 2017.
"Economic impact of NCAA in Milwaukee? $4.6 million." NCAA Men's Basketball. N.p., 20 Mar. 2014. Web. 13 Mar. 2017.
"Milwaukee to Host NCAA." Urban Milwaukee. N.p., 18 Nov. 2014. Web. 13 Mar. 2017.

"Our Press Releases." | VISIT Milwaukee. N.p., 18 Nov. 2014. Web. 13 Mar. 2017.

7 comments:

  1. This data is interesting because you would think that during march madness, productivity in most places would go down. I know in school, many students try and keep the games playing another tab so they can keep watching, and that definitely for us seems to lower the output of goods such as homework and projects. I would have believed the lower levels of productivity to be a negative externality but it in fact has been reported to boost morale. So while it may lead to more distractions, employers don't seem to have a problem with it.

    ReplyDelete
  2. I think that the large spike in revenue for businesses in the Milwaukee area is definitely worth the cost of having much more congestion downtown. The increase in both vehicular and foot traffic. Even though it can cause some extra hassle, it is worth it because businesses in the area get an increase in revenue and fans get to watch games without having travel far.

    ReplyDelete
  3. I know that recently there was an article in the newspaper about how people can watch March Madness games without getting caught by their boss. So you would think that these games would be a negative externality and be a distraction to those who crave watching them during their work or school day. With this said, it was really a surprise to hear that productivity didn't go down.

    ReplyDelete
  4. This is an interesting way of approaching March Madness, I never really thought about how it would affect Milwaukee negatively. Not only does the ticket revenue bring in a lot of money, but also sports bars bring in a lot of money too. I used to work at Buffalo Wild Wings, and there were groups of men who left their work to sit all day and watch the game. They ordered food, and drinks all day long. Their tab ended up being over $200. I'm sure there are many other people who do the same, this could help boost the economy. However, people consistently do this, which takes away from their jobs, making it another negative externality. Not to mention the idiots who think they are okay to drive, when in actual all reality, they are drunk, and start driving. March Madness brings in a lot of revenue from multiple areas, which is quite interesting to think about.

    ReplyDelete
  5. I do question what will happen going on into the years. This is because when you see that the Bucks arena is almost finished and that will only be for then and no one else and so the Panthers arena is a way smaller space so the amount of ticket sold will be less than previous years.

    ReplyDelete
  6. There is SHOCKING news in the sports betting world.

    It's been said that every bettor must watch this,

    Watch this now or stop betting on sports...

    Sports Cash System - Robotic Sports Betting Software.

    ReplyDelete
  7. BlueHost is definitely the best hosting provider for any hosting plans you need.

    ReplyDelete

Related Posts Plugin for WordPress, Blogger...