The Business of March Madness

Last Updated on February 1, 2024

It is one of the most eagerly anticipated sports events of the year. Like the Super Bowl, March Madness is an event that could be said to have transcended sports altogether. Even if you are not into basketball, there is a very good chance that you will know what March Madness is – and you will definitely know when it is on thanks to the millions of fans around the country watching as many games as possible.

Sports fans from other countries sometimes find it difficult to comprehend just how important college sports and the NCAA are in the US. But if you thought that college football was big, then the scale of March Madness is just incredible. Fans prepare for this event like no other, filling in their brackets and honing their college basketball betting strategies for months beforehand.

But what about the bottom line? How much money is made at March Madness? Every year we hear how much a 30-second advert will cost during halftime of the Super Bowl, but what about the money made at March Madness? Let’s take a look at the business side of the event – and find out where all the money goes.

Good Business for the NCAA

The NCAA is technically a nonprofit organization. But if you have seen the vast amounts of money made during events like March Madness, you wouldn’t know it. Thanks to broadcasting deals, ticket sales, sponsorships, and advertisements, the NCAA brings in around a billion dollars each year. For some context, that is about 90% of the total money earned.

The majority of the money made by the NCAA comes from the TV rights. CBS and Turner Broadcasting paid $10.8 billion for a 14-year contract in 2010 – and added another $8.8 billion in 2016 to extend the deal until 2032. You can see how revenue is distributed by the NCAA here.

Not So Good Business for the Players

One of the most contentious subjects related to college sports has been the lack of revenue sharing with players. With the NCAA earning so much money from events like March Madness, there seemed to be a very valid argument that the players the fans are paying to see should be compensated in some way.

The college athlete status of the players meant they did not receive a cent. The players still don’t get paid for the games themselves – or take a salary at all. But in 2021, for the first time, the players were allowed to profit from their name, image, and likeness (NIL). Now the students can strike some profitable March Madness deals of their own.

Arkansas’ Ricky Council IV attempts a shot over Kansas’ Jalen Wilson during an NCAA men’s basketball tournament second round basketball game on Saturday, March 18, 2023, at Wells Fargo Arena, in Des Moines, Iowa. Photo courtesy: Lily Smith/The Register / USA TODAY NETWORK

Ad Revenue

In 2021, advertising revenue during the event smashed through the billion-dollar mark for the first time.

With the numbers expected to get even higher in the years ahead, the broadcasting companies can expect to make easily over $100 million profit a year. Although a 30-second ad may cost only a few thousand in the early rounds, that price will go up into the millions for the final. In fact, advertising spending for March Madness is more than during the postseason for the NBA and Major League Baseball – and dwarves the amount spent during the College Football Playoffs.

Impact on Host Cities

When you are taking in all of these business facts related to March Madness, it should be noted that we are talking about an event that lasts for over a month and includes far more games than many of the other comparable major league sports postseasons. But the money involved is still incredible – and the 14 host cities don’t miss out on a payday.

Dayton, Ohio, a traditional First Four host, can expect around $66 million, while a city hosting the Final Four will make over $300 million.

Marquette Golden Eagles fans Steve and his son Kellen Kay of Chicago take a photo in front of the March Madness sign prior to the first round of the NCAA men’s basketball tournament at Nationwide Arena. Photo courtesy: Adam Cairns-The Columbus Dispatch

Betting on March Madness

There is obviously a lot of money to be made for a variety of different organizations during March Madness. But since the landmark Supreme Court ruling in 2018, revoking the Professional and Amateur Sports Protection Act, the amount of money wagered on the event has also grown significantly.

It was estimated that over $3 billion was bet on March Madness in 2022. Football is the most popular sport in the country – for fans and gamblers – but the Super Bowl only managed around $460 million in bets. These figures are only estimates for legal betting numbers too.

Bigger Than the Super Bowl?

We have used the Super Bowl as a major comparison tool throughout this article, as it is the sporting event that is considered the biggest in the US. But could March Madness be a legitimate contender? The TV audience for the championship game might not come close to the NFL’s signature event, but ad revenue proves its own point.

The format of March Madness may be different to all of the respective major league postseasons, but it already generates more money than almost all of them. For what is essentially an amateur sports event, that is nothing short of incredible. Likely, the Super Bowl is still a bigger revenue generator than March Madness – but not by much.

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