Gavin Landry isn't a big pro basketball fan, but he loves college hoops -- especially March Madness, the NCAA's three-week tourney to crown the best team in all the land. "College basketball is basketball in its purest form," he says. And since starting a hotel-industry consulting business in 2008, Landry says it's gotten a lot easier for him to watch the games while at work. "Being my own boss and having the ability to be a little flexible allows me a lot more time to do that kind of thing," Landry says.
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For those of us with less freedom at the office, catching daytime games is a little trickier not that we're letting that stop us. American workers were projected to spend a total of almost 8.4 million hours watching March Madness games online at work last year, up 20% from the previous year, with most of that video streaming occurring the first two days of the tourney. Given that the average hourly wage for a private-sector worker is $22.87, the consulting firm Challenger Gray & Christmas estimated that all those lost hours would cost employers more than $192 million this month.
Thank (or blame) the boost in viewership partly on CBSSports.com's new free mobile apps, as well as the fact that a greater number of games are being streamed online and more workers have access to high-speed internet connections at work than ever before, says James Pedderson, a spokesman for Challenger.
2. "We make loads of money..."
The players may be amateurs, but the NCAA men's basketball tournament is big business -- second only to the Super Bowl in terms of ad sales for a postseason sporting event. A thirty-second commercial during one of the last two rounds of the tournament costs around $1.2 million, far more than a $440,0000 spot during the World Series, and more than three times the cost of an ad during the NBA championship, according to Kantar Media, a research firm. Those high prices are partly due to the tournament's "protected" spot on the calendar, "a three-week window of time where it is the focal point of the sporting world," says Jon Swallen, a senior vice president of research with Kantar Media. And while ratings for head-to-head matchups like the World Series can vary widely depending on the size of the teams' fan base, March Madness always has national appeal, Swallen says.
All that ad revenue also translates to big bucks for the NCAA, which in 2010 reached a new 14-year deal for the TV rights to the tournament with CBS and Turner Broadcasting System for $10.8 billion, or about $771 million a year. In the 2009-2010 fiscal year, more than 80% of the NCAA's total revenue came from the rights fee for the tournament. (The NCAA's deal with ESPN for the rights to the women's basketball tournament brought in about $16.8 million, or about 2% of the organization's revenue that same year.)
"3. ...but not for your alma mater."
March Madness may make billions, but for most colleges it doesn't provide nearly enough cash to cover the rapidly escalating costs of running a first-class athletics program. In the 2008-2009 school year, only 13 Division I-A sports programs were in the black, according to research by the Center for College Affordability and Productivity (CCAP). The few financial winners include a handful of last year's tournament participants, including the University of Georgia ($1.8 million in earnings), Purdue ($2.3 million), University of Michigan ($10.6 million) and Texas A&M ($15.8 million). But most schools' athletics programs are actually a major drain on the school's finances. For example, the athletics program at the University of Houston lost $19.8 million in the 2008-2009 fiscal year, SUNY Buffalo (-$20.2 million), Oklahoma State University (-$24.7 million) or Rutgers, where last year's heartbreaking -- and controversial -- loss to St. John's in the Big East tournament followed a financial loss for its athletics department of $25.5 million in the 2008-2009 fiscal year.
So who pays for big-time money losers? Student fees, says Richard Vedder, a professor of economics at Ohio University and the director of CCAP. The average Division I-A program needed $3.4 million in student fees in fiscal year 2009; in the Big 10 Conference, the average student fee subsidy was $383,000, and in the Mid-American Conference the average subsidy was $6.7 million. And because the NCAA's spoils go largely to the winners, students at schools with losing programs end up paying more in fees. "The burden of athletics seems to be falling particularly on the lower-income schools which are sort of wannabe athletic powers," Vedder says.
"4. We're why college is getting so expensive."
At many schools, spending on sports is growing twice or three times as fast as spending on academics, according to the Knight Commission on Intercollegiate Athletics. Much of the growth is due to coaching staff salaries, which account for a third of overall sports program budgets at the average university or college, says Amy Perko, the Knight Commission's executive director. Division IA football coaches' salaries rose an astounding 46% from 2006 to 2009, to $1.4 million, according to the Knight Commission. And men's basketball coaches aren't too far behind: The average salary for the head coach of a team in 2010's March Madness tournament was $1.3 million, excluding benefits, according to a USA Today report.
Not only are coaches' salaries rising, the number of people on the payroll is growing, despite official NCAA rules that allow only three assistant coaches, Perko says. Take a look at who gathers around during tournament timeouts: Perko suggests -- you'll likely see more than four staff members. Many programs are hiring staff that essentially serve as assistant coaches but are called things like "director of basketball operations," "director of player development," or "director of recruiting," Perko says.
5. "For student-athletes, this is a full-time job (without the pay)."
The NCAA stresses that it has put rules in place to make sure its student-athletes spend as much time in the classroom as they do on the field or court. For example, the association limits formal practice and competition for student-athletes to only 20 hours a week.
But a 2010 NCAA survey found men's basketball players were spending 39.2 hours a week at the gym, up 2 hours from 2006. Of course, as a full-time job it doesn't pay too well. Athletic scholarships can't exceed the cost of tuition and fees, room and board, and books. In the 2010 school year, a full scholarship would have been worth $28,130 at the average public four-year college or university, according to data from the College Board. At a school where the basketball team does bring home a lot of revenue from the NCAA tournament, "these kids are the ones doing the work and producing the income," Vedder says. "They're so valuable, and they're getting paid so little," he says.
6. "Our players might not graduate."
On the first day of last year's tournament, Secretary of Education Arne Duncan joined the Knight Commission on Intercollegiate Athletics in calling for the NCAA to change its revenue-distribution policies to do more to reward academic success and punish teams whose players aren't on track to graduate. Over the past five tournaments, teams that weren't on track to graduate at least 50% of their players had been awarded $178.8 million in March Madness money, nearly 44% of the total revenue doled out, according to the Knight Commission. Ten teams in last year's tournament were set to graduate less than half their players: Alabama State, Kansas State, Morehead State, Purdue, San Diego State, Syracuse, UAB, UC Santa Barbara, USC, and UT-San Antonio.
That said, the likelihood of a Division I men's basketball player graduating has improved in recent years: According to the NCAA's "graduation success rate" data, only 56% of Division I freshmen basketball players in 1995 graduated, compared to 66% for the 2002 cohort. But men's basketball and football programs still graduate fewer players than any other sport. And male athletes fare worse than women: The average graduation rate for Division I men is just 72%, compared to an 88% average for women. Among men's sports, tennis has the best graduation rate, at 87%; for women, basketball has the worst record at 83%. The top student-athletes? Women's fencing, which graduated 100% of its 2002 class.
"7. We can't get rid of agents."
It's against NCAA rules for a player to receive any financial benefit other than scholarship money, and NBA rules also forbid professional agents from giving college players anything of value. But agents still find creative ways to skirt the rules. One new strategy: Agents are employing "runners," who serve as a middleman between the college player and themselves, says Stacey Osburn, a spokeswoman for the NCAA. The "runner" might present themselves simply as a friend or "advisor," and all the while attempt to make business deals on that player's behalf and give them gifts or money. "Sometimes kids have no idea they're being used in that way," Osburn says.
The NCAA only has direct jurisdiction over players and schools, but they continue to work with professional players' associations, agents and state governments to try to address this ongoing problem, Osburn says. In addition to rigorously enforcing its rules, the NCAA is looking into ways to provide better education to student-athletes who may later go pro on how to steer clear of agents and others who could cost them their college eligibility or penalize the college's basketball program. Consider the case of O.J. Mayo, the standout guard who was accused of receiving improper cash and gifts while playing for the University of Southern California during the 2007-2008 season. In 2010, before waiting for the NCAA to act, the school imposed sanctions on its basketball program, including a one-year ban on postseason play.
8. "Forget tickets -- hotel rooms are hardest to come by."
Maybe you have to stay somewhere miles away from the Mercedes-Benz Superdome in New Orleans, the site of this year's Final Four. Maybe you have to rent a truck instead of a car (for three times the cost) because there are no rooms available. "But that's what makes it fun," says Mike Janes, the CEO of ticket-search site FanSnap, who in 2010 followed Duke all the way to the Final Four in Indianapolis. "What really separates March Madness from every other event is the incredibly short notice that fans have as to whether their team's going to be playing," Janes says.
Tickets can be relatively easy to come by -- confident fans will often buy Final Four seats in advance, while others will scoop up last-minute tickets from disappointed fans, who tend to sell within minutes of a loss or even before the game is over if the outcome is clear. But making last-minute travel arrangements to catch a game can be a real challenge -- especially hotel accommodations. Demand for hotel rooms last year was up more than 18% over the previous year, thanks in part to the continued rebound from the recession, says Sam Soni, the president of PrimeSport, the NCAA's official provider of ticket and hospitality packages. One tip for those fans who wait until the last minute: check out the official tourism site for Louisiana, which has some information about available housing, or contact NCAA partner Fan Experiences.
9. "Cinderella story? That's a fairy tale."
Sure, any team theoretically has a shot at the title -- just win six straight games. But in fact the odds are heavily stacked in favor of established powerhouses. For starters, the Big 6 conferences Big East, Big Ten, Big 12, Pacific-10, Atlantic Coast Conference, Southeastern Conference on average, about three times as many at-large bids as the mid-majors. In fact, there are many Division I teams that have never made it to the tournament at all, including Northwestern and William & Mary. Once in the tournament, history still favors the Big 6: The last time a team who wasn't from one of the six major conferences won the tournament was in 1990 (University of Nevada Las Vegas, which was a number 8 seed last year).
Don't think an underdog entering the tournament on a hot streak has any better chance of winning either. "There's no evidence that that matters," says Tobias Moskowitz, a professor of finance at the University of Chicago, and co-author, with sportswriter L. Jon Wertheim, of the book "Scorecasting: The Hidden Influences Behind How Sports Are Played and Games Are Won." "Streaks occur, but they have no predictive power," Moskowitz says. He notes that streaks happen when you flip a coin hundreds of times, too -- but the odds of getting heads never change.
10. "You're right -- the ref is biased."
In college basketball, home teams win 69% of games -- and the home-team advantage is nearly as strong in the NBA, where home teams win 63% of the time and nearly 99% of teams perform better at home than they do on the road, according to research by Moskowitz and Wertheim. The reason? Something many fans suspect, but Moskowitz and Wertheim say they have managed to statistically prove: referee bias.
"The home court advantage works through fans exerting pressure on the referees," Moskowitz explains. Refs (unconsciously) avoid making calls that will anger a screaming crowd -- so even in a tournament where games are played on "neutral" ground, whichever team plays closer to home or simply has more fans should have a built-in advantage, Moskowitz explains. Moskowitz and Wertheim also found that refs are less likely to call fouls on star players -- and that tendency to "swallow the whistle" gets worse as the game -- and the tournament -- goes on, he says.
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