March Madness Creating Madness in the Economy

Every year all fans anxiously wait March when the most unpredictable sporting event happens. Each year, one college basketball team comes out on top, yet they are not the only ones who win. The event of March Madness affects more than just the winning team. The NCAA as a whole receives about ten million dollars just from CBS and Turner to have the broadcasting rights. From this, the NCAA gives money to not only the schools and the teams but the winning coaches receive large bonuses. Going further than the teams, the cities that host the games have a big economic impact. For example, Dayton OH always hosts the play in games for the tournament, which since 2001 has increased Dayton’s economy almost 66 million dollars. As March Madness continues, the tournament has an even large economic impact on that round’s hosting city. Las Vegas, a city that does not host the tournament, receives large profits from the NCAA tournament. Over 60 million people fill brackets and bet on who will be the NCAA champion. There was an estimate of about 9 billion dollars worth of bets placed for March madness last year and this number continues to rise each year.

While the NCAA tournament does bring in large numbers worth of revenue, it also leads to nearly a 1.9 billion dollar decrease in productivity in the workplace with everyone streaming the games rather than doing what is expected of them. Does the temporary increase in profit outweigh the decrease in productivity during this time? Does the decreased in productivity in March ultimately lead to a decrease in production over the next few months?

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7 thoughts on “March Madness Creating Madness in the Economy

  1. khoran13

    Another interesting factor of March Madness is the amount of money the players on the teams themselves contribute to these profits. This profit has contributed to the discussion of whether or not players should be compensated for the money they bring in, or if a free education is enough.

    Reply
  2. lukemadden19

    After also writing about different effects of March Madness, it was interesting to think about the role that Vegas plays in all of it and just how much that city can benefit from an event that could potentially be on the other side of the nation.

    Reply
  3. coreymanley25

    Interesting take on March Madness. Where did you arrive at this large of a decrease in productivity? Also, the estimated economic impact of events is usually overstated, capturing much re-shifting of consumption in the local economy instead of measuring the new economic activity the event generates on its own. I believe the actual figure would be somewhere south of the 66 million number.

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  4. vamayer

    March Madness is a significant economic driver in boosting regional economies. The fascinating part is how much value each city puts into obtaining a game in the tournament. I think it is incredibly interesting to look at the bids cities make to host a tournament game. Cities know the giant economic profits that are filtered in the local economy. Specifically, restaurants and hotels benefit from the influx of people. Overall cities bid to host games in the NCAA tournament because of the economic gains for the city and university.

    Reply
  5. tswats18

    One thing I wonder is how much of an economic benefit March Madness is for certain cities. For example, I could totally see hosting games for Dayton, Ohio being a good thing because it is not a top tourist location. As a result, being a part of the tournament likely brings in much more business than usual for Dayton. However, I am curious just how much hosting economically benefits more popular cities to travel to, such as New York and Las Vegas. These are cities which already bring in many outside people so I am curious if hosting just makes this number greater or stops the normal travelers from coming and keeps the overall impact constant.

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  6. willdagostino

    Nice post Lauren. You raised some very interesting questions. I don’t think productivity would decrease over the next few months. I feel like most people who make brackets don’t avidly watch college basketball anyway, and once their team is out, they probably don’t care anymore. I wonder where they got the 1.9 billion dollar decrease in productivity from. I definitely agree that productivity would decrease, but I wonder how accurate that is.

    Reply
  7. Victor Matheson

    The $1.9 billion is one of the great complete guesses reported in the news as fact. But in the whole scheme of things, as an “alternative fact” it’s a pretty harmless one.

    Reply

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