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  • March Madness, it's one of the biggest events in American sports

  • 68 college teams get invited to the big dance by early April. There's only one left standing.

  • So how big is March Madness?

  • It draws in millions of viewers and breaks in more than 800 million dollars each year from its television deal alone.

  • Which makes up more than 75% of the NCAA's yearly revenue.

  • Bracketology is also a thing.

  • The tournament creates a frenzy around brackets which fans fill out to predict the outcome of every single game.

  • In 2014, Warren Buffett and Quicken Loans even offered a prize of $1 billion to anyone predicting a perfect bracket.

  • The odds of doing that were 1 in 9.2 quintillion.

  • March Madness is about upsets, underdogs and up lifting narratives.

  • But it's also about the money. Here's how the Big Dance became a big business.

  • The NCAA's Division one Men's Basketball Tournament is the official name of March Madness.

  • It got its start back in 1939 and back

  • then there are only eight teams that participated.

  • As the years went on, the tournament invited more and more teams.

  • The "March Madness" nickname didn't start until 1982 when CBS announcer Brent Musburger coined the phrase.

  • At the time, there are only 48 teams competing in the tournament.

  • The modern format featuring 64 teams began a few years later in 1985

  • and by 2011 there are 68 teams competing in the tournament.

  • March Madness has since become a staple sports with its historical championship games featuring players

  • like Michael Jordan, Patrick Ewing and Michigan's "Fab Five."

  • But March Madness has turned into an economic powerhouse for the NCAA.

  • Revenue from the tournament helps fund less popular or less TV friendly college sports across the U.S.

  • Most of the NCAA's revenue comes directly from March Madness.

  • Specifically from the NCAA's lucrative deal with CBS and Turner Broadcasting.

  • The TV deal brought an eight hundred fifty seven million dollars in 2018.

  • Back in April 2010, the NCAA, CBS and Turner reached a deal for exclusive television,

  • internet and other broadcasting rights for 14 years ending in 2024.

  • The deal included more than $10 billion over the course of the 14-year contract.

  • The deal was revisited back in 2016 and extended the original agreement.

  • Instead of the deal ending in 2024, it was extended another eight years through 2032.

  • Under this new agreement, CBS and Turner would pay an additional $425 million between 2018 and 2024.

  • The remaining $8.3 eight billion would be paid out between 2025 and 2032.

  • These media right are massive deal for CBS and Turner.

  • In 2018, March Madness has brought in more than 97 million viewers and was watching more than 180 countries.

  • March Madness also hit $1.32 billion in TV ad spending in 2018.

  • Compare that to other sports his postseason, March Madness beat out the NBA, MLB and college football.

  • Only the NFL generate more ad spending.

  • You'll notice for March Madness there are a ton of big corporate sponsors and there's a main reason why.

  • They're getting that hard-to-reach demographic young college-educated Males who are actually watching TV.

  • So many advertisers, they struggle to reach those people.

  • They're hard to find. They're hard to actually get on TV. But this tournament actually collects them and puts it in front of those screens.

  • Then, there's the money that comes from March Madness and it's adjacent tournament, the NIT.

  • The NIT tournament is essentially a consolation tournament for teams that did again from March Madness.

  • Together March Madness and NIT helped contribute to more than

  • $132 million in ticket sales for the NCAA in 2018.

  • And that's including revenue from championships and other sports.

  • Even though college football's national championship grabs higher TV ratings than its counterpart in basketball,

  • the NCAA doesn't receive any revenue from bowl games or the college football playoff.

  • In college football, athletic conference's negotiate individual TV deals.

  • Out of the 90 championships at the NCAA hosts each year, only five generate at least as much money as it costs to run them.

  • The NCAA brought in revenue more than $1 billion in 2018.

  • But more than $972 million came directly from the March Madness TV deal and the NCAA's ticket sales.

  • Where does all this money go?

  • The NCAA redistributes the money it makes from March Madness to over a thousand schools across 24 sports in three divisions.

  • Nearly half a million student athletes currently compete in college sports.

  • While their funding comes from individual schools, the NCAA divvy up the revenue for March Madness for

  • Student athletes and the programs that help them.

  • In 2018, over a $164 million went to the NCAA's D1 Basketball Performance Fund.

  • That cash is distributed to conferences and independent schools based on their performance during

  • March Madness over a six year period.

  • The NCAA isn't the only one making money.

  • The coaches get paid too.

  • If a team gets a March Madness playoff berth, then the school's head coach receives a bonus.

  • John Calipari is the head coach of the Men's Basketball team for the University of Kentucky

  • He's set to earn $8 million during the most recent season.

  • His base salary from the University of Kentucky is $400,000.

  • But the media and endorsement compensation clocks in at $5 million dollars.

  • The remaining $2.6 million dollars is Calipari retainer.

  • John Calipari doesn't just rank as one of the highest-paid coaches in college sports,

  • He also technically ranks as one the highest paid public employees in the country.

  • His salary is more than Kentucky's governor Matt Bevin who makes over $145,000 a year.

  • Calipari even makes more than a U.S. President who makes about $400,000 a year

  • The relationship between why players don't get paid? But why coaches do? They see all this money

  • coming into the NCAA because of March Madness, because of college basketball, and they say look it's because of the players.

  • They need to get a cut of that revenue. They are the product. Why are they not getting paid?

  • But the schools will say look they are getting paid.

  • They're getting a free full ride scholarship that's worth hundreds of thousands of dollars.

  • And some people will say look you're getting a lot more exposure when you're playing college basketball.

  • Zion Williamson is much more famous because he plays for Duke.

  • If he was playing in the G League right now, if he was a rookie somewhere, internationally,

  • or maybe it on an NBA team, not in a big market, maybe we don't hear as much about him.

  • So he may be making himself more money because he's getting that national exposure.

  • But there's even more money behind March Madness.

  • Back in 2018, the American Gaming Association estimated that Americans would wager about $10 billion on March Madness

  • and only 3 percent would be legal.

  • Some of these illegal bets were the direct result of die hard and casual sports fans

  • participating in March Madness polls with their friends and around the office.

  • These polls are a collection of people trying to predict the outcome of every single game between 68 teams in their March Madness Brackets.

  • At the time, Nevada was the only state where Americans could legally wager on sporting events.

  • But in May of 2018, the U.S. Supreme Court voided the Professional and Amateur Sports Protection Act, which has been in place since 1992.

  • The law banned sports betting in states that didn't have a law on sports betting already.

  • While not every state has lifted its own provisions on sports betting as of yet,

  • states like New Jersey open its doors to betting on both professional and amateur sports.

  • So I've said that I'm gonna place two $20 bets.

  • I'm gonna walk back and make those two bets, the first two legal sports bets in

  • the history of this state. It will not be on the Boston Red Sox.

  • You've got the handle number. That's how much money is being spent.

  • But most of that money goes to the winners. The actual money that goes to the casinos isn't very small.

  • Maybe 5% of what's actually getting taxed.

  • And then the amount that's being taxed on that, the amount that the governments make is an even smaller percentage of that.

  • So when you're hearing billions of dollars that are being bet,

  • just a couple million dollars are actually going into these state tax coffers.

  • So it's much smaller than you think.

  • March Madness alone is close to $1 billion business for the NCAA

  • and it doesn't appear to be slowing down anytime soon.

  • Viewership for March man was its highest-ever in 2018.

  • And the league's lucrative TV deal will be in place until 2032.

  • That's 13 more years of big money for the big dance.

March Madness, it's one of the biggest events in American sports

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The Money Behind March Madness

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    joey joey に公開 2021 年 05 月 23 日
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