March = Money

Well its almost that time of year. It’s time for the madness to begin! CHA-CHING $$$

Did you know that coaches normally receive bonuses for wins in March? In 2013 Rick Pitino accrued an estimated $840,000 from tournament bonuses. Pitino received a $150,000 bonus from the championship win alone. Coaches aren’t the only ones making all the money. CBS and the Turner TV network earned over 1 billion dollars in revenue from the tournament in 2013! That’s B as in BILLION. Oh by the way… Louisville was college basketballs most valuable team that year and estimated to be worth over 38.55 million. Hmmm I wonder who the most valuable team in college basketball is this year? I bet it’s that blue team in Lexington, but sorry I can’t recall the name 🙂 This article is full of financial info about the 2013 basketball tournament.

According to Kantar Media, The NCAA men’s basketball tournament and the NFL playoffs are perennially the two largest post-season sports franchises. After two years atop the rankings, college hoops finally slid to 2nd position behind the NFL in 2014. The only TV ads more expensive than March Madness ads are NFL playoff game ads. March Madness means big business. Major companies including GE, Coco-Cola, and AT&T all sponsor the NCAA. Ever wonder what kind of ads see the most air time? That would be automotive ads! Now for my personal favorite statistic measured by Kantar Media:

HH Rating Index
Index Rank	TV Market	Games w/Out-Of Area Teams	All Games
1	Louisville KY	304	379
2	Topeka KS	227	267
3	Dayton OH	224	255
4	Lexington KY	219	269
5	Wichita-Hutchinson KS	213	264

How to read: The average game rating in Louisville was 3.04 times greater than the national average

What this information means is that the Louisville, Ky. market had the most committed audience during the 2014 tournament. Take that Wildcats! Katar Media provided tons of cool March Madness statistics and you can check them out in this article.

There are a few reasons why March Madness is unlike any other sports event.

1. The Alliterations. Unlike the Super Bowl, March Madness is a segmented sporting event. This means that the revenue stream will stay open for longer. The NCAA implemented a great strategy by segmenting March Madness into names like the sweet 16, the elite 8 and the final four. Each one of these segments presents a new opportunity for revenue.

2. The Spontaneity. What people love most about March is that no one ever guesses the winners correctly. This is why your wife’s color coordinated bracket demolished your strategic masterpiece last year. You don’t have to be a pro to understand March Madness. The first days of the tournament are like heaven for those with short attention spans. You can flip to the last 2 minutes of a game and share in the joy of a buzzer beater. I believe the revenue stream for this sport is so high because it captures casual sports fans just as well as hardcore sports enthusiasts.

3. The Contests. Everyone wants to take Warren Buffetts money in the billion dollar bracket challenge! However, Fox Sports, Capital One, ESPN and CBS Sports all have their own version of bracket contests as well. No sporting event does contests, sweepstakes and betting like March Madness does. Whether the odds are impossible or not, people love to shoot for the stars.

Not everyone appreciates March Madness as much as the fans do. Take a look at this humorous infographic on the economics of March Madness.

As you can see, March Madness is all about the money. Try not to get fired from your job this week and may the bracket Gods be with you! LET THE MADNESS BEGIN!