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Michael McLellan

March Madness means millions lost, millions made

by Michael McLellan | Dun & Bradstreet Editor

March 15, 2012 | No Comments »

American workers are spending a little time on the bench (or the couch) this week, thanks to the NCAA Men’s Division 1 Basketball Championship tournament, commonly known as March Madness. Worker productivity invariably suffers, especially during the first two days of the annual college basketball showcase.

Many folks take the week off to enjoy spring break or to indulge in the madness of SXSW. But workers that are stuck at the office waste valuable time following the numerous games and results on work computers and mobile devices. Estimates of lost productivity range from $175 million to $1 billion.

While some businesses see a lull in production and sales, other companies and organizations are able to cash in on the tournament’s dominance of early spring. Cities with arenas hosting early round games will enjoy an influx of leisure spending on restaurants, transportation, and hotels. But in the world of big-time sports, television broadcasting rights and the associated advertising revenue are the main cash cows.

Sports leagues or individual teams negotiate lucrative multi-year contracts licensing broadcasts and the media companies turn around and sell advertising time to sponsors seeking to market themselves to the millions of riveted television viewers.

Back in 2010, Time Warner’s Turner Broadcasting and CBS landed a $10.8 billion, 14-year deal to televise the March Madness basketball tournament. The deal started in 2011 and runs through 2025. The two networks split coverage of the first- and second-round games and CBS has exclusive coverage of the regional finals and Final Four through 2015.

The previous agreement signed by CBS back in 1999 was worth a paltry $6 billion. The current deal enables all tournament games to be televised live across four national networks: CBS, TBS, TNT and truTV.

The NCAA basketball committee increased the tournament field size from 65 to 68 teams beginning last year, giving CBS and Turner the opportunity to televise an even greater number of games per tournament. NCAA.com and CBSSports.com also run March Madness Live, the tournament’s online streaming video platform.

In other college sports and television news, the Big 12 conference and ESPN are reportedly close to agreeing to a contract extension that will bring in $2.5 billion over the next 13 years when combined with the revenue provided from the conference’s Fox TV deal. The deal would put the Big 12 conference’s media revenue in the ballpark of the top college conferences.


Photo by Jeff Croft used under Creative Commons License.


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