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business newsEconomy Scores During March Madness
College basketball action could make it a big month.
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“This month is probably busier than average. College basketball is leading the way,” says John Lasker, Senior Director of Programming at ESPN360 (DIS), the online streaming compliment to the cable sports powerhouse. “We’re doing close to 350 total event for the month. This is one of the stronger months we’ve had. Last month, we were probably in the 200-event range.”
ESPN360 got the college hoops-mad month rolling on March 5, when the site started live streaming over 124 games over a 10-day period. Featuring every major college sports conference, it was punctuated by an epic 6-overtime game between Syracuse University and the University of Connecticut, which became one of the most-watched college basketball games in ESPN’s history.
ESPN360 continues the busy basketball programming through the month, with every game of the women’s NCAA tournament, 1 of the 3 major March college basketball tournaments, the National Invitational Tournament, and college basketball's crown jewel: the men’s NCAA tournament. All 3 tournaments generate major economic activity, but it’s the men’s 64-game NCAA tournament over 16 days that draws the most action.
Through its March Madness On Demand service, CBS (CBS) has already earned $30 million in ad revenue, up from $23 million last year. Additionally, CBS Sports Mobile is offering live streaming of each game on Apple’s (AAPL) iPhone and iPhone Touch, ensuring that American college students don’t get any work done through March.
“[With] college sports this time of year, when there is actually something meaningful on the line, the passion in fans comes out exponentially,” says Lasker. “When so much is on the line, that’s when the passion turns out.”
ESPN and CBS, who have a $6 billion, 11-year partnership with the NCAA, have built major programming pushes around the month’s giant college basketball games. While last year’s men’s tournament generated $430 million in advertising for CBS, advertisers spent $643.2 million, up 23.8% from the previous year. Meanwhile, the NCAA should bring in a $600 million haul this year for the tournament, accounting for roughly 96% of its total annual revenue.
With thousands of American sports fans descending on all the big games, a number of hurting local economies should also see a welcome spike in tourism dollars. In 2006, cities hosting the men’s NCAA regional final games saw as much as $25 million pumped into the local economy.
For the earlier games in this year’s tournaments, local officials in host cities like Portland, Oregon are expecting $10 million - a number that should increase as the tournament goes on. And the fact that this year’s NCAA championship game will be held in Detroit could be a godsend for a city in desperate need.
Throw in the millions of additional dollars secretly spent on tournament betting pools, and it all adds up to a big-money distraction for sports fans across the country.
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