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March money drives NCAA
By: Thomas Abbott, Academic Program Manager for Business

Did you know that the NCAA Men’s Division I basketball tournament just paid for another year of college sports? That may not be precisely true, but in reality, it paid for just about everything the NCAA does.

In most major sports television is the largest source of revenue. The sale of broadcast rights is the driving force behind the economic success of professional leagues like the NFL, NBA, and MLB. It’s true that college sports also benefit from the enormous popularity of college football and basketball broadcasts, but where does the money go? What most people don’t know is that in college football most of the TV revenue goes to the conferences and individual schools. January’s college football championship game won by Ohio State? That wasn’t an NCAA event. The NCAA controls eligibility for its members to participate, but doesn’t own the game or crown the champion. Therefore, it doesn’t get the money.

players in a basketball game scrambling for the ballUnlike football, the NCAA does “own” the basketball tournament, so it’s able to sell the television rights.  The immense popularity of the event makes those rights very valuable. In 2013, the NCAA had revenue of a little over $900 million, 84% of that revenue came from one event, the men’s basketball tournament  popularly known as March Madness. What did that money pay for? It actually helps to fund just about everything the NCAA does ranging from administrative costs, scholarship funds, and tournaments and championships in all sports offered across all three divisions. In essence, one gigantically popular tournament pays for college sports… with the exception of major college football.

At Post, we participate in intercollegiate athletics at the NCAA Division II level. Our athletes practice just as hard, devote as much time to athletics, and balance their studies and sports just like future pros from Wisconsin and Duke that we watched Monday night, or UConn and Notre Dame Tuesday night. But as we strive to reach our athletic goals, to participate in NCAA regional and national tournaments, it’s sometimes hard to remember that the funding for our division is largely based of a single basketball tournament that happens every March.

“Marketing Madness”

By: Jeremi Bauer, Academic Program Manager for Marketing

“Marketing Madness” as coined by Jon Swallen, Chief Research Officer at Kantar Media, is one of the most valuable properties in all of post-season sports programming. What Swallen is referring to is the three weeks in March known as March Madness.  When the top 68 NCAA Division I men’s and women’s basketball teams from around the country compete to crown a national champion.  For the 2015 tournament, CBS and Turner broadcasting showed every game live across four channels CBS, TNT, TBS, and truTV; they even streamed the games online allowing marketers another opportunity to get their brands in front of their target audiences.

Since 2005, Kantar Media estimates that advertisers have spent an estimated $7.5 billion in TV spots from approximately 279 different marketers.  The tournament achieved $1.13 billion in ad revenue in 2014, second only to the NFL playoffs in TV ad spend during post-season sports programming.

Below is a chart of the last 10 years of March Madness ad spending.

Chart of March Madness advertising spend

A breakdown of major sporting events in the U.S. shows the NCAA tournament in second place behind only the NFL in terms of ad revenue for the past two years (see below).  This information is critical for organizations to know, as marketing managers must take into account where the viewers will be when developing their yearly budgets.  Major sporting events are a massive draw for viewers, and psychologist Dr. Robert Cialdini tells us that sports fans tend to take an ownership view of their favorite teams.  Brand’s that associate with sports teams obtain a symbiotic relationship with the fans of those teams, who in turn associate more closely with those brands through their team.

Post-Season Sports:
National TV Ad Spending*
 
2014 (millions)
2013 (millions)
NFL Football (Jan-Feb)
$1,233
$1,101
NCAA Men’s Basketball (Mar-Apr)
$1,134
$1,117
NBA Basketball (Apr-Jun)
$875
$904
Major League Baseball (Sep-Oct)
$360
$592
NCAA Football Bowl Games (Dec-Jan)
$201
$193
NHL Hockey (Apr-Jun)
$137
$124
* includes Pre-Game, Game & Post-Game Programming
Source: Kantar Media

In line with our last post centered on marketing during sporting events, in comparison to the Super Bowl, which commanded $4.5 million for 30 seconds of commercial air time; 30 seconds of commercial air time during March Madness commanded just under $1.5 million, which was up 15% from the previous year.  So how much were companies willing to spend to try and influence consumer behavior and generate unique impressions? Below is a list of the top 10 advertising spenders during the Men’s NCAA tournament.

Top 10 Parent Company Advertisers
RankParent CompanyAd Spend* (millions)NCAA Sponsor
1General Motors Corp$83.20Yes
2AT&T Inc.$61.90Yes
3Coca-Cola Co.$41.70Yes
4Anheuser-Busch InBev$41.60
5Capital One Financial Corp$41.20Yes
6Samsung Group$31.80
7Southwest Airlines$31.50
8Volkswagen Ag$29.30
9Allstate Corp$28.50Yes
10Unilever$27.70Yes
Total Top 10$418.60

*Figures reflect national TV only and include all pre-game, game and post-game programming

Source: Kantar Media