InMarket: It’s that time: March Madness

Robert Francis

If you happened to be at Jody’s Club Forest tavern on Staten Island in 1977 on a bright March day, you might have witnessed the birth of the modern day March Madness. That year, according to recent histories of the event, 88 people filled out brackets in an NCAA tournament pool, plunked down a drawing of Alexander Hamilton and awaited the results. Marquette took the title that year, by the way. But it wasn’t until 1984, when Bob Walsh, working with an NCAA Host Committee is credited with coining the term March Madness. What is weird about this “tradition” is that it isn’t very old, but it does coincide with the growth and development of what I call the ESPN generation – basically people raised in a period when just about any sport could be viewed at any time on some sports network.

Being a few years older than that generation, watching basketball on television in my day meant straining your eyes to see the ball on a large (19-inch) nearly square black-and-white TV set with rabbit ears. Not ideal for a game played on a large rectangle. I played a lot of basketball as a kid, primarily because my dad built one of the best basketball goals in the neighborhood and we had a concrete driveway. Yes, we were living in high cotton. One could venture down to the local school or park courts, but there would be no net for a proper “swish.” Not to mention no handy kitchen for Dr. Pepper breaks or a place to watch reruns of Gilligan’s Island. Sports are so much more than a game.

- FWBP Digital Partners -

Not that I learned much about basketball as a kid anyway. As I recall, most of my coaches taught us basketball by screaming, “Hit the floor knucklehead and give me 20!” whenever we made a mistake – and we made plenty. So now we live in the age of March Madness, where sober business titans like Warren Buffett are going nuts. In Buffett’s case, he is part of a $1 billion prize offered by Yahoo and Quicken Loans to whoever can pick a perfect NCAA bracket. An estimated 50 million Americans participate in March Madness office pools and, according to global outplacement firm Challenger, Gray & Christmas Inc., companies stand to lose at least $1.2 billion for every unproductive work hour during the first week of the tournament.

A much smaller portion of workers watch games from their computers and mobile devices during work hours; the lost wages from this activity could still amount to more than $660 million, according to the firm. That figure is based on the 6.8 million unique visitors who watched online streams during the first week of last year’s tournament. These visitors spent an average of 1 hour and 51 minutes online each time they opened a stream, according to data reported by Turner Sports, which manages NCAA March Madness Live. But those good folks at Challenger don’t suggest Vladimir Putin-like measures to limit access to sports sites and live streaming. The result of such oppression likely would be long-term damage to employee morale, loyalty and engagement, according to the firm. In other words, if you don’t want someone to spit in the coffee pot, lay off the heavy hand. Unless you’re a bus driver or a heart surgeon, you can probably take a few minutes off to check out a game on a much better screen than I did as a kid.

Businesses are getting in on the action anyway. Hooters Restaurants calls itself the “Hooky Palace” during the tournament, attempting to lure customers to take some extra time off and watch the action on some big screens as they down fried foods. And you know the tradition of college basketball players cutting down the nets after a victory? Some fans of March Madness are making their own monumental snips: vasectomies. Several doctors that offer vasectomies are offering specials during the tournament, giving men an opportunity to stay home from work to recuperate. A link between March Madness and a rise in vasectomies seems to confound the American Urological Association. “The AUA does not have data showing any link between March Madness and an increase in the number of vasectomies performed,” the AUA said in a statement to CNN.

The real winners in all this Madness? The schools splitting the $1.4 billion in revenue that big-time men’s college basketball produces over the course of a year. Schools disclosed the revenue figure in filings with the Department of Education for the 2012-13 school year, the most recent for which figures are available. The record haul is up 5 percent from the previous school year. Who won this coveted bracket? The University of Louisville once again has the richest basketball program in the country. Its men’s team had revenue of $42.4 million, producing a $26.7 million profit. Uh, not bad Cardinals. I’m pretty sure organized crime would be happy with results like that. The biggest part of college basketball’s revenue comes from the 14-year broadcast contract between the NCAA and CBS and Time Warner’s Turner Sports unit. The $11 billion deal is mainly for the rights to broadcast the men’s tournament games. And Jody’s Club Forest, where it all began? In 2006, the prize money at the tavern topped $1.5 million and the feds stopped by for more than a martini. No one can spit in the coffee pot like the Internal Revenue Service. This article contains information from CNN.