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March Madness: Woe to Employers...and the Irish?

By Rick Horrow and Karla Swatek

March 19, 2012

It’s mid March, which means a handful of things. Federal income tax deadline is a month away, spring break is around the corner, all the world is suddenly Irish. And this year, mid March sees the East Coast basking in 83 degree temperatures while California shivers in the drizzly low 50s.

Most of all, of course, mid March brings the NCAA Men’s Basketball Championship, aka March Madness, the favorite season of CBS Sports CEO Sean McManus, Dick Vitale – the Don Cherry of basketball – and college hoops fans everywhere.

Between billions of dollars in economic impact, broadcast rights, ad revenue, and gambling, March Madness unquestionably is big business. The top tier tourney comprises $10.8 billion in television rights (spread over CBS, TBS, TNT, and TruTV), upwards of $738 million in advertising revenue, based on last year’s numbers, and an estimated $3 billion in betting, in Las Vegas sports books, illegal office pools, and elsewhere. The march to online and wireless content consumption continues – information technologists estimate that last year, 10.3 million hours of streaming video were viewed.

In Pittsburgh, which is hosting the second and third rounds of the tournament’s East Division at its new CONSUL Energy Center, Visit Pittsburgh and Duquesne University estimate that the games will deliver at least a $7.1 million boost to the city’s economy this weekend. "It’s going to be great for all of the restaurants in Downtown Pittsburgh," Kevin Joyce, owner of The Carlton Restaurant, told the Pittsburgh Business Journal. "It was good for us 10 years ago when it was here…We did phenomenal business when the tournament was in town.”

Regardless, March Madness also might be bad for business. For all the money that flows through the NCAA men’s basketball tournament, employers are at risk of seeing money flow out of their company. According to the annual study done by outplacement firm Challenger, Gray & Christmas Inc., online March Madness coverage could attract more than 2.5 million unique visitors per day, each spending an average of 90 minutes watching games. Based on average private sector earnings of $23.29 per hour, that’s about $175 million in lost productivity over the first two full days of the tournament alone. (A separate survey from OfficeTeam, however, revealed that 41 percent of managers surveyed saw the NCAA tournament as having a positive effect on workplace morale and 22 percent actually believed it increased workers’ output.)

While it’s impossible to predict who will win the national championship, the biggest winner of March Madness is New Orleans. The city continues its post-Katrina revitalization by hosting the BCS title game, Final Four, and the Super Bowl, all within 13 months. Not bad economic impact.


Marketing the Brackets

As is par for the courts, dozens of companies are stepping up to align their brands with the NCAA tournament, starting with CBS and the Turner family of networks themselves. Weeks before the first ball was tipped, Turner and CBS Sports launched a multimedia marketing campaign, dubbed “Brackets Everywhere, that comprises TV and radio spots, print ads, and “digital out-of-home billboards with live score updates,” according to Ad Age. The TV spots include cameos from such member-of-the-family faces as TBS’ Conan O’Brien, CNN anchors such as Soledad O’Brien and Anderson Cooper, and a variety of celebrities, and digital ads run across the entire span of Turner Digital Outlets – including even The Weather Channel, where a live scoreboard appears alongside coverage of Michigan’s devastating tornados. The “Brackets Everywhere” campaign will wrap up with a significant presence in New Orleans around the Final Four.

Another company looking to activate in a big way around the NCAA tournament is Allstate. Last week, the insurance giant announced that it had become an official Corporate Partner of the NCAA. The new partnership will expand Allstate’s extensive existing presence in collegiate athletics (which includes title sponsoring the Allstate Sugar Bowl and the goalpost-centric Good Hands® Nets scholarship program at 71 partner colleges and universities), providing opportunities for the company to activate around all the NCAA’s championship events while supporting key educational and community initiatives.

Allstate is airing new TV commercials during tournament coverage across all CBS and Turner channels, and will have an onsite presence in New Orleans at the NCAA Men’s Final Four at Bracket Town refreshed by Coca-Cola Zero™, offering fans the chance to participate in basketball-themed activities and win the ultimate college sports fan prize: trips for two to both the 2013 BCS National Championship game and the 2013 NCAA Men’s Final Four in Atlanta.

Also enjoying brand exposure from the tournament are the schools themselves. While Maryland’s Loyola University didn’t survive its first round game against Ohio State on Thursday night, the school’s MAAC conference championship victory and subsequent automatic entry into the Big Dance will have a positive long term impact on undergraduate admissions applications and alumni and corporate donations.

“You couldn’t go out and buy this kind of publicity,” Loyola Athletics Director Jim Paquette told the Baltimore Business Journal last Tuesday, as his team prepared for its East Regional game and the school bookstore stocked merchandise and prepared for a surge in sales. “It certainly helps open doors for us,” he said. “Fortunately we’ve built the infrastructure here to go out now and seize the opportunity.”

As for another prominent Catholic school as St. Patrick’s Day looms, what about those Fighting Irish? With its international reputation, Notre Dame doesn’t need March Madness exposure as does a small school like Loyola University of Maryland. What they might need is some divine intervention on the court – Las Vegas bookmakers set the odds of Notre Dame beating Xavier in the Southern Regional on Friday at 200-1.

This year, guess St. Paddy isn’t really on the Irish’ side.

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Beyond the Scoreboard
Rick Horrow, America’s leading expert in sport business, and coauthor Karla Swatek give fans an inside look at the multibillion-dollar world of professional sport.
Beyond the Scoreboard eBook
Rick Horrow, America’s leading expert in sport business, and coauthor Karla Swatek give fans an inside look at the multibillion-dollar world of professional sport.
Beyond the Scoreboard: Chapter 1. The Mega-Master Super Series XLXL eBook chapter

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