This is possible because of the companies willing to pay hundreds of millions of dollars to the NCAA and its college teams.
The NCAA does not allow on-court advertisements and signage, so corporations pursue advertisement contracts to activate sponsorships outside the arenas. AdWeek reports that a 30-second TV spot is worth just under $1 million during the Elite Eight and Final Four and peaks at a whopping $1.5 million during the Championship Game. Furthermore, companies must pay millions more just to use phrases such as “Final Four” and “March Madness” in their marketing techniques.
Coca-Cola, AT&T, and Capital One — the first, second, and third most recognizable sponsors of the NCAA — again dominated the marketing activity at this year’s tournament.
Coca-Cola launched its “Enjoy More Madness” campaign by televising themed commercials and putting out branded retail products based on the Tournament. Although it gave up the rights to the Official Bracket Challenge to Capital One, AT&T kept a firm grip over any social media regarding the Tournament by sponsoring all photography from the Tournament and presenting NCAA Courtside coverage via Turner Sports’s @MarchMadness Twitter and Facebook account. Capital One, along with its Bracket Challenge, ran ads with former college stars like Charles Barkley and Greg Anthony and hosted festivals and concerts to coincide with the title game.
This type of marketing is expensive. Nike, which outfits 43 of the 68 teams in the 2014 Tournament, paid $2.1 million to its top team, the Florida Gators. Time Warner and CBS Broadcasting hold a 14-year, $10.4 billion contract with the NCAA for full rights to broadcast games.
These companies can afford to spend so much money on the Tournament because of its enormous payout. Last season, the Men’s College Basketball Tournament raked in $1.15 billion in ad revenue; no other sport’s postseason playoffs have come close to the $1 billion mark.
“The economy has certainly been boosted by March Madness and its outrageously high flow of income,” says West Ranch High School Economics teacher Scott Collins. “Viewership ratings are through the roof, which causes advertising to be desirable and expensive.”
However, the NCAA’s profits are not without controversy. Although the NCAA has created an extremely lucrative modern cultural obsession over college sports, its developments have involved ethically questionable economic methods.
The NCAA raises hundreds of millions of outside corporations and as a whole brings in $6 billion annually, according to USNews, but the players are barred from being paid in anything other than education. Yet many current and former college athletes have taken initiative against the NCAA’s economic model.
In an ongoing battle against the NCAA, former Men’s Basketball Tournament MVP Ed O’Bannon has been joined by basketball legends Bill Russell and Oscar Robertson in the class action antitrust lawsuit over “billions of dollars in television revenues and licensing fees” to compensate for the NCAA’s commercial use of players’ likenesses. And on March 26, the National Labor Relations Board (NLRB) ruled that football players at Northwestern University are employees and have the right to unionize to advocate for rights and pay.
This case, which may ultimately be decided by the Supreme Court, will have an impact throughout college sports.
