Tuesday, March 20, 2018

March Madness

March Madness
Written by: Becca Dettlaff

Like all national sporting events, March Madness has got everyone’s attention, which means the amount of money going into these games have an incredible effect on the economy. The economic effect of college sports continues as billions of dollars are expected to be poured into this sixty-eight team basketball tournament. Although the amount of money put into these sporting events it can have a very helpful impact on our economy.

Just in the city of Houston, Texas alone is expecting to generate around $300 million worth of revenue from the Final Four, which will benefit them and make the taxpayers of Texas feel better about eight million dollar subsidy they provided to the tournament.

Money generated by hosting the Final Four is just one of the many ways March Madness is having an impact on the total GDP and economic earnings. The money from the TV advertisement as well as broadcasting rights are estimated to bring in enormous amounts of money. For example, CBS and Turner were estimated to each pay ten billion dollars for broadcasting rights in 2016, and that number has only been increasing. A normal thirty second TV ad sold at around a million dollars and ad revenue from past March Madness’s brought in over a billion dollars.


These are just a few of the many benefits and contributions to the economy that this tournament provides. Another portion of the total revenue of March madness is the ticket revenue generated. The average one game ticket for a Final Four game this year ranges from $250 to $7,500. Not only does this tournament increase the overall GDP of the United States, but it provides for more advertisements for companies to promote their products and services at the games. This in turn could overall provide for more jobs and more consumer spending, boosting the economy in all aspects.

In conclusion, we can all stop and take a step back and look at how large of an impact March Madness has on the economy. Just like all national sporting events, they bring opportunities for business, and increase consumer spending all across the country. Whether its spending money on food and beverages for parties, or betting on which team is going to make it to the Final Four, one thing's for sure, that this event not only entertains Americans, but it boosts the economy in so many ways.




Work Cited 

Ogus, Simon. “The Economic Impact Of March Madness From First Four To Final Four.”Forbes, Forbes Magazine, 24 Mar. 2016, www.forbes.com/sites/simonogus/2016/03/17/the-economic-impact-of-the-ncaa-basketball-tournament-from-first-four-to-final-four/.


Athlon Sports. “Economic and Social Impact of March Madness (Infographic).”AthlonSports.com, athlonsports.com/college-basketball/march-madness-numbers-economic-social-impact.

12 comments:

  1. Just like the Super Bowl, March Madness is a great moneymaker for advertisers, as more people are seeing their commercials between breaks. Big broadcasting companies are making lots and lots of money as well, since their ratings are going up. One thing I realized is that Houston is still working on hurricane relief efforts, and the $300 million expected in revenue from basketball fans will help immensely.

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  2. I never realised how much money March Madness makes a year and the amount of consumer spending that goes into it. With the costs of the tickets and the food, that is enough to skyrocket the revenue that it brings in but also the spiritwear that is purchased for the game. There are always those people who paint that faces with the colors of their team and dress head to toe in their colors to match. It is crazy how far people will go to cheer on their favorite team and how much people will spend to go to a final four game. Personally speaking, I would spend the money because of the experience. If that is how much a final four game costs… imagine the amount of money it costs to go to the finals.

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  3. I find this very interesting. I did not realize that so much money was spent on March madness. I knew that it was a big event and a lot of people wanted to go watch it but I did not realize that people spend over 300 millions dollars from the final four alone. Or that tickets to a final four game is 250 - 7,500 dollars. March madness should help economies if this much spending takes place. In your article you stated that Houston, Texas paid 8 million dollars for a subsidy to have the tournament. That might seem like a lot but the end economic growth far outweighs that cost.

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  4. It is crazy the amount of money the March Madness brings into the economy. All the costs including tickets, food, apparel and etc. The prices of all the expenses are extremely high as well which is okay for this situation because the demand for watching the games is high. The tournament only makes The United States look better because it shows how people within the country are willing to spend top dollar for something they love.

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  5. It's very interesting to see how sporting events specifically March Madness, the Super Bowl, Olympics, World Cup and more bring in so much revenue and profit. Consumers are willing to spend so much money on specific seating tickets, hotels, merchandise, food, hotels and to experience and have a good time at the sporting event. Your article explains just that. Not only is it the Final Four that brings in over 300 million dollars but think of the whole tournament overall: the first games, sweet sixteen, elite 8 and then the championship game. If the Final Four brings in that much money think of how much money the whole March Madness tournament is bringing in. Relating to economics, the GDP has an overall increase because GDP is the total value of everything produced by all the people and companies in the country. If they are producing new merchandise, tickets, new advertisements and new ideas for this tournament, that makes total sense that the GDP is having a grand increase.

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  6. I think this is very interesting topic, and there is a very intriguing argument that goes along with it. With talks of the tournament growing in the next few years, there has been many pros and cons given from a strictly basketball perspective. However, these analysts never look at it economically. If you consider the fact that most if not all first round games have extra tickets that don't sell, from a seat tickets revenue point of view, adding additional games wouldn't increase revenue all that much, as if people really wanted to go to a game, there are already games that don't sell out. However, people would surely still watch these games on TV, so ad revenue would still increase with an uptick in games, right? In my opinion, this is not necessarily true. With more games there is more supply, and an eventual decrease in performance due to the additional games and strain on the players. This would probably decrease demand for watching later games, as players are tired and fans are bored, and these games, specifically the Final 4, are the real moneymakers with gear, tickets, and ad revenue. Looking at it from that point of view, it doesn't seem to make much economic sense to expand the tourney even though on the surface it may look like a no brainer.

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  7. The impact that March Madness has on the economy seems tremendous. People spend their money to go to the games, buy food, stay up-to-date on merchandise, and make bets. Though it is just another major sporting phenomenon, it still has as great of an impact as other ones. In addition, the fact on broadcasting that you mentioned is also a key provider to the nation’s GDP. Ranking in ten billion dollars for sole broadcasting is huge. Looking into monetary policy, I do not think March Madness has an obvious impact on it, just because that unit is very specific. This, however, is a very interesting topic and its impact seems large on the US.

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  8. When March Madness comes around, a lot of people don't think of the business and economic portions that are involved. To think when people travel from different states to see a team play people must figure out where they are going to stay, where they are going to eat, what they are going to buy. When March Madness comes around it brings in so much more revenue to the businesses around and not just the viewers on T.V. stations or commercials. Economically, people are buying goods and services that's provided which helps bring up our GDP which helps our country. Just to think once city is expecting to generate $300 million, just imagine what the rest of the tournament does. In the end, March Madness is a great tournament to have because it gives consumers what they want and it gives the US what we need with increasing our nation's GDP.

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  9. Much like any large sporting event, a lot of money will be brought in. March madness isn’t just a single event though. The tournament is spread out over weeks, with 68 teams being in the tournament there are a ton of games played. It’s not like there’s a single game, so it’s not just revenue of one game it’s of all of them and the revenue adds up quick when you take into account ticket sales as well as food/drink and merchandise sales.

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  10. An event as big as March Madness will undoubtedly bring in massive amounts of profit for all parties involved, for example you stated that Houston alone will generate 300 million in revenue, and that's just from hosting 3 games. Add in all the extra money people spend to buy tickets, concessions, hotels, etc and you have a massive total profit for the tournament. It is still amazes me how much money events such as March Madness and the Super Bowl can generate and I'd be interested to see the total revenue for the entire tournament.

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  11. It is hard to disagree with such a popular annual form of entertainment as being a very profitable asset to our economy. I agree with pretty much everything you said, but it would also be interesting to see the profit that all of the universities who host games in the beginning rounds rake in each year. It would also be interesting to see what restaurants such as Buffalo Wild Wings contribute to the economy during this time of year.

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