Who Really Benefits From March Madness
Who Really Benefits From March Madness
Greg Geanon
March Madness is one of the most popular sporting events in America; over 60 million people will fill out a bracket, and attendance at last year’s tournament was nearly 800,000. There is a lot of interest in March Madness, and while people enjoy the entertainment they get from watching their favorite college teams play, the real winners in all of this are the NCAA and the colleges themselves.
With so many people watching March Madness, competition for broadcasting rights for the tournament is high. The current television deal was signed in 2011 and will last until 2024. A fourteen year deal, CBS/Turner paid $10.8 billion which comes out to about $740 million per year. According to Investopedia, “More than 90 percent of the NCAA's operating revenue is derived from this tournament alone. Unlike the championship games in college football and baseball, the NCAA does not have to split its revenue with any corporate sponsors.” As a result of this setup, the NCAA not only makes hundreds of millions of dollars, but there is plenty of money left over to give to the colleges.
Money is split up among the athletic conferences based on their performance in the tournament over a six year rolling period. For each game a school participates in, they receive one basketball unit. With the new television deal, basketball units in 2011 were worth approximately $256,000 dollars, and roughly $190-200 million was handed out to the athletic conferences that year. As the conferences are paid based on each game played by a school in its conference, this system rewards conferences that either send several schools to the tournament, or have schools who win multiple games. Over the past several years, the most successful conferences have been the Big East, the Big 12, and the ACC, all of them earning over $75 million over five years from 2006-2010. This translates to millions of dollars for the schools in each conference, as the conferences tend to divide the money equally among all the schools in the conference. Successful tournament runs and the prize money earned can go a long way towards building new facilities, paying for scholarships, and drawing in top level recruits, all of which are necessary if they wish to remain successful.
However, the benefits of a successful March Madness tournament don’t only come down to the money earned from broadcasting rights or prize money. When teams are successful, boosters and alumni tend to donate more money. Ticket sales go up in the following seasons, and merchandise sales skyrocket. Schools who might not normally receive a lot of publicity are suddenly household names as they upset larger, more well-known teams. Butler, who went were consecutive national runner-ups in 2010 and 2011 experienced a 41% increase in applications after only their first appearance in the national championship game.
While the schools who are successful benefit greatly from March Madness, smaller schools who don’t make it in also are at a significant disadvantage when it comes to money and publicity. One of the ideas the NCAA is considering is expanding the tournament to 96 teams. More teams means more games, which ultimately means higher broadcasting fees, guaranteeing even more money being made by the colleges and the NCAA.
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