This article was originally published on March 27th, 2019.
March Madness is one of the biggest events in American sports. 68 college teams are invited to battle it out on the basketball court, until early April, when only one team is left.
NCAA Men's Division I Basketball Tournament the official title of March Madness, started in 1939, with only 8 teams competing.
The tournament would grow over the years and would receive the March Madness nickname from CBS announcer Bret Musburger, in 1982.
For many basketball fans, March Madness is regarded as the premier basketball tournament. Regularly, being voted as by fans as the more attractive competition over the NBA Playoffs.
The Madness
The NBA may have the elite players, who have bee working on their craft for years, but the NCAA tournament has a lot more of the unexpected.
In the 2018 tournament, sixteenth seed UMBC beat top overall seeded Virginia 74-54. UMBC entered the game as 20.5 point underdogs and simply outplayed Virginia is every way to win by 20.
In 2011, 11th seed Virginia Commonwealth knocked out 1st seed Kansas, in the Elite Eight with a 71-61 victory. VCU used hotshot coach Shaka Smart's (@HookEmSmart) "havoc" defense to open up a stunning 17-point lead in the first half against the top seed. The Rams became the only third No. 11 seed to advance to the Final Four.
This ability to be unexpected is not by accident. The very structure of the tournament increases the chances of upsets, compared to the NBA playoffs.
The decision to make each March Madness round a single game, rather than a best of seven series, increase the chances of an upset.
NCAA games are also shorter than NBA games. NCAA games being only 40 minutes, rather than standard 48 minutes. This again helps to reduce the sample size, and increase the chances for the lower-ranked teams.
Another helpful tactic for NCAA underdogs is the shot clock, while on offense. Elite NBA players receive only 24 seconds, while NCAA players get 35 seconds before they need to take a shot. This again gives the less skilled teams another chance to slow down a game, as they cut down the number of possessions of their opponents.
Every March Madness games are played on neutral courts, meaning no team has home-court advantage. Therefore, it is common for neutral fans to cheer for an underdog as they hope to see an upset.
Additionally, the 3-point line is closer to the basket, at 19'9". While NBA players shoot from 23'9". Therefore, making 3-pointers easier to shoot for NCAA athletes. The closer 3-point line makes for what is called the "high variance strategy", which if effective gives lower-seeded teams a better chance of winning.
The Money
The term “March Madness” may refer to the upsets, underdogs, and uplifting narratives. However, it is also a reference to the large amount of money that the tournament generates for the NCAA and competing colleges.
It is estimated that the tournament is watched by over 97 million television viewers each year, across 180 different counties. The NCAA's broadcasting deal with CBS and Turner was valued at over $857 million, in 2018. Making up over 75% of the NCAA's yearly revenue.
In 2010, CBS and Turner agreed to a broadcasting deal with the NCAA worth $10.8 billion, over 14 years. In 2016 the deal was extended a further 8 years, now ending 2032. Under the new deal, CBS and Turner have to pay an additional $425 million between 2018 and 2024.
Furthermore, the tournament hit $1.32 billion in television advertisement spend, for 2018. Comparing this to other U.S. postseason events March Madness beats out the MLB, NBA, and NCAA Football playoffs. Only the NFL is able to bring in a higher television ad spend, with $1.67 billion.
The reason for this is that corporate sponsors have identified that they can target a hard to reach demographic, young, college-educated males. The tournament's popularity with this one demographic has increased demand for ad space from corporate sponsors.
Moreover, the NCAA sees almost $130 million in ticket sales from the tournament. This figure has been helped by the fact that fans have been willing to spend hundreds of dollars for tickets to just see games in the first and second rounds of the tournament.
Where Does It Go?
Much of the money that the NCAA generates does manage to make its way back to schools, with around $560 million trickling down.
The revenue the NCAA makes is shared with athletic programs at 1,102 schools across the country. Helping fund 24 sports who are less popular or less television-friendly college sports, across the 3 NCAA divisions.
$164.7 million of this went back to the Division 1 Basketball Performance Fund. This is used to distributed funding back to conferences and individual schools, depending on their performance during March Madness, over a six-year period.
The potential of sports programs to raise revenue means that coaches are among the highest-paid staff members at just about every college with competitive teams.
Kentucky's John Calipari is the highest-paid coach in college basketball. He will reportedly earn $9.2 million in 2019, which is over $2 million more than the second-highest-paid coach in Duke's Mike Krzyzewski.
Calipari however only receives a base salary of $400,000 from the University of Kentucky. However, he receives over $5 million in media and endorsement contracts, the remaining earnings come from his retainer.
This means that Calipari is technically one of the highest-paid public employees in the US. His salary is more than Kentucky's governor Matt Bevin ($145,992) and even more than a US president ($400,000).
Bracketology
It is expected that $10 billion will be wagered on this year's March Madness tournament. However, only around $300 million of which will be done legally at sports bookmakers.
Most of this $10 billion comes from sports fans participating in March Madness pools otherwise known as a bracket. These are groups of people who come together to predict the outcome of every single game.
The NCAA Bracket is a March Madness tradition nearly as popular as the college basketball tournament itself. This year, some 70 million brackets are expected to be competing for cash prizes and office bragging rights.
Future
March Madness is close to a $1 billion business for the NCAA, with no sign of slowing down.
Viewership for March Madness was its highest ever in 2018, and with a broadcast deal until 2032 it seems unlikely to be.
From a school's perspective, March Madness also offers one more thing, advertisement to prospective college students.
Florida Gulf Coast University (FGCU) made its first-ever NCAA Tournament, in 2013. Advancing to the Sweet 16, before finally succumbing to number three seed Florida.
After the university’s surprising NCAA performance, Google searches for the school spiked; interest in FGCU was higher than it was for the University of Kentucky during March Madness, despite Kentucky’s traditional dominance of the sport. The school’s website generated more than 100,000 unique visitors, about triple the norm. The following year, applications to Florida Gulf Coast surged 27.5 percent.
A number of universities that defeated top-seeded competitors during March Madness have seen a similar application bump. Schools that upset teams seeded at least 10 spots ahead of their own rank experienced a median student application increase of 7 percent, In 2012, 15th-seeded Lehigh University beat No. 2 seed Duke in the first round. Lehigh’s application rate jumped 9.2 percent year-over-year, modest compared with that of FGCU, but considerably higher than the average 4 percent increase for all schools that participated in the NCAA Tournament from 2010 to 2014.