Written by: Josh Swanson
The Dark Side of March Madness
March Madness is single handedly one of the most popular eventful basketball event that occurs throughout the entire year. With it comes once in a lifetime opportunities for players, schools, and fans. However, there is another side to March Madness that is over sought. Every year, millions of people fill out brackets and just about the same amount stream or attend the games while at work or school. Lots even take off of work or school. Focusing on work, many people don’t realize the negative effect March madness has on many businesses. When March Madness Arrives, productivity of many workers significantly drops. Now yes, march madness brings in millions and millions of dollars in revenue to the economy, but many businesses whose profits and customer base is not directly correlated with March Madness are hurt by it every year due to the productivity decrease seen by the employees.
According to Fox Business, over 23.7 million workers will use company time to research, perfect, and build their March Madness brackets for 2017. Sadly, not only is that true, but U.S. employers may suffer over $615 million in hourly wages meaning that they will be paying over $615 million for workers to do nothing but bracket related stuff. Additionally, it is estimated on the higher end that if say 81.5 million workers spent an hour or more on their brackets, businesses would lose over 2.1 billion. To put this in the correct perspective, the term “losing money” could mean either the business is physically losing money due to the negative productivity or they could just be losing the opportunity to profit more money. To be honest, due to the fact that consumer spending is at such a high rate and the private spending rate at a low from people spending so much money on things having to do with March Madness, businesses that indirectly deal with March Madness could take advantage of the imbalanced disposable income of consumers.
With the overall increase in technology and technological platforms in the recent years, the overall demand for march madness has increased due to the rise in technological advances. Workers now have numerous ways they can stream the games without leaving their desks.Due to this, over $6.3 billion is lost just in productivity showing the major decrease in the labour force.
Many cities received serious positive benefits economically from the tournament. For example, March Madness affected Milwaukee with a $6.6 billion impact as they hosted a couple of very good games. This is great for Milwaukee as a city, but it is interesting to think about how many Milwaukee based business lost out on sales or profits because of worker productivity. In fact, there were probably many workers who took the day off to either go to the game since it was so local, or went to work and “took the day off.” Due to the fact that in order to stream games, it is basically free for any person who wants to, the opportunity cost for workers when handling their own personal money is not as high because they don’t have to use it to still see the games.
The amount of money that is lost through the negative productivity is something that seriously affects businesses as many businesses are in firms that strive to get most of their business within the months of March and April. Either way, March Madness has its positive aspects and and its negative ones too. Yes, March Madness does help local economies such as Milwaukee which increase the city's revenue as well as increasing the gross domestic product, but it also decreases businesses productivity and profits during these couple weeks due to the major drop in employee productivity.
Barrabi, Thomas. “March Madness 2017: U.S. Companies Will Lose Billions to Slacking Workers.” Fox Business, Fox News, 1 Mar. 2017, http://www.foxbusiness.com/features/2017/03/01/march-madness-2017-u-s-companies-will-lose-billions-to-slacking-workers.html
Shafer, Dan. “March Madness Economic Impact in Milwaukee Exceeds Expectations.” Industry News, Milwaukee Journal Sentinel, 21 Mar. 2017, http://www.bizjournals.com/milwaukee/news/2017/03/21/march-madness-economic-impact-in-milwaukee-exceeds.html