The Business of March Madness

By Rick Horrow and Karla Swatek

March 20, 2013

• The first two days of March Madness will cost businesses $134 million in lost productivity, according to the firm Challenger, Gray & Christmas.  An estimated three million employees will spend three hours watching the games at work.
• Nike continues to win the apparel war, as its affiliated brands sponsor 52 of the 68 tournament teams.  Thirteen schools, including three of the four number one seeds, are outfitted by Adidas.
• For the third straight year, the NCAA is playing the “First Four” play-in games at University of Dayton Arena.  The combination of the “First Four,” plus hosting second and third round games, is expected to generate $8 million for the economy.
• In 2010, CBS and Turner Sports partnered on a 14-year, $10.4 billion deal to buy the NCAA men’s basketball tournament rights.  The deal is worth nearly $771 million annually, or 90% of the NCAA’s 2012-13 revenue.  By comparison, rights to the women’s tournament reportedly are $17 million per year.
• Why can CBS and Turner afford to spend so much on the tournament?  According to research from Kantar Media, ad revenue from the tournament topped $1 billion for the first time last year, and that total will grow this year.  No other sport’s postseason has hit the $1 billion milestone.
• Thirty-second ads during this year’s championship game could reach $1.4 million, according to AdWeek.  That’s nearly 3x the cost of an ad during the World Series, but still well off from the $3.8 million CBS pulled in per 30-second spot during February’s Super Bowl.
• Companies expected to advertise heavily throughout the tournament? AT&T, Capital One, CDW, Coca-Cola, Domino’s, Dove Men + Care, and Northwestern Mutual.  Non-NCAA partners such as Pizza Hut, Spam, and Hooters are launching social media campaign in order to avoid paying the high price tag to use phrases such as “Final Four” and “March Madness.”
• This year’s Final Four takes place April 6-8 at the Georgia Dome in Atlanta.  Officials expect 100,000 people to visit the city from out of town, staying in an estimated 10,000 hotel rooms and bringing $70 million in economic impact.
• How far has the tournament come? When Jim Valvano’s N.C. State Wolfpack won the national championship 30 years ago, the Final Four was played at University Arena in Albuquerque, New Mexico, which had just 18,000 seats.  These days, the only venues considered to host the Final Four are massive indoor venues.  Games have been played at NFL stadiums every year since 2009, with next three scheduled for Cowboys Stadium (2014), Lucas Oil Stadium (2015), and Reliant Stadium (2016).