NCAA Tournaments Effect on the Economy
NCAA Tournaments Effect on the Economy
We are all fresh off of all the action of the NCAA tournament with Wisconsin going all the way to the final four. The NCAA tournament is something that we all love to enjoy whether it be by rooting for our favorite team or filling out a bracket. This begs the question of how does the tournament effect the economy? There are both pros and cons to the tournament. One fact that struck me as odd was a fact that we don’t think about. Nearly one third of people watch the games while at work and 86 percent of people will check scores while at work. 1.2 Billion dollars are lost each hour from people stopping work to watch games and or happening to get “sick” during the tournament. You have to keep in mind that these people may find other things to slack off on instead of watching the game but the amount of lost work is a definite negative externality to those businesses. Also another con of the tournament includes the heated debate that players do not get paid for the tournament. This poses the question of are other NCAA personnel being free loaders on the talent of the players? The NCAA tournament alone makes 1 billion dollars per year which is more than the entire NFL post season made. With all that the NCAA makes you would think that some would be left over for the players.
The NCAA tournament also has many positive effects on the economy. For example in addition to the revenue that is made through ticket sales and television commercials, other more city based income is made. For example, hotels and restaurants seek the benefits of people coming into the cities to see the games. Also for cities not hosting games, if a team makes it to the sweet 16, 28 percent of fans will spend $100 or more on things such as hats and shirts. Another positive effect on the economy believe it or not is made through the upset games or bracket buster games (RIP Danny’s 2014 bracket). Every year there are a few games that no one would have ever predicted would occur. For these schools that are able to pull of such a miracle, their school gains a great amount of publicity. Schools like Florida Golf Coast who no one had ever heard of in the past now will be schools that students will want to enroll in.
All in all when you look at all of the positive effects the tournament has in regards to travel, tickets, and school memorabilia the marginal benefits of the tournament out way the marginal costs. So to all those people who are checking your phones under the desk or taking an extra long lunch break, while you may have a slight negative impact on the economy, overall you are helping the economy grow. Without you fans, commercials would not have success and neither would all other institutions that benefit from the games.
http://www.marketplace.org/topics/business/freakonomics-radio/how-much-tv-money-does-march-madness-make
Bibliography
"The Economics of March Madness: The Tourney May Not Hurt the Economy as Much as You Think." www.newrepublic.com . N.p., n.d. Web. 7 Apr. 2014. <http://www.newrepublic.com/article/117045/economic-costs-and-benefits-college-basketball-ncaa-tournament>.
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