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Sports — April 3, 2012 10:19 pm

The Money Behind the Brackets

Posted by

The multi-billion dollar market of March Madness

In the world of college sports, March is a very important month, as it brings the annual NCAA men’s basketball tournament, dubbed “March Madness.”

Millions of people make their bracket predictions, bookies around North America take in bets, and sports channels are saturated with pre-game shows, in-game commentary, and post-game analysis of the tournament as the Madness begins.

But what people often do not see is the numbers behind the tournament. There are probably a few bracket pools on campus, with prizes close to a hundred dollars. This is chump change in comparison to the $2.5 billion that the FBI estimates is gambled illegally in the U.S. during March Madness. (That’s right, billion. With a B.) Only an approximate $80 million is done legally through Nevada bookkeepers.

In addition to the $2.5 billion being gambled this year, it is estimated that companies throughout the U.S. will pay up to one billion in salaries to unproductive and distracted workers, who will spend an average of 90 minutes a day sneaking peeks at game highlights, box scores, and analysis.

But that is a fraction of the business surrounding the NCAA tournament. CBS and Turner Sports acquired the broadcasting rights for the tournament through the year 2024 in a $10 billion deal with the NCAA. Not bad for a non-profit organization.

The reason that CBS acquired the broadcast rights for the tournament is quite simple: the $738 million generated in advertisement revenues last year ranked second highest among sports postseason revenues, the first being the NFL’s $900 million revenues for its postseason.

Student as commodity?

Through all of this, the athletes do not earn a penny, which is understandable considering that they are students. As part of the contract that every player signs as they enter the NCAA, they are unable to make any money off of their collegiate career. What people do not often know is that this clause also includes the time after they have graduated. This includes any revenue generated by the NCAA through the use of any player’s likeness in ads and video games.

So what does the NCAA do with all that money? One thing that is certain: it does not devote itself to the academic success of the athletes. Indeed, the graduation rate for the major college sports in the U.S. is less than impressive. For example, the Baylor Bear men’s basketball team graduates less than 50% of its athletes. In 2010, only 29% of the team’s African-American students graduated.

It is understood that the NCAA uses a part of those revenues to support other national tournaments such as golf and volleyball, but would it not also be beneficial to allocate a part of those funds to assure the academic success of the athletes? Is it not the purpose of the NCAA to develop student-athletes? Considering that only a minute portion of collegiate athletes make it to the professional leagues, maybe it’s time that the NCAA think more about the students.

 

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