March Madness in MilwaukeeBy 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.
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.