Connect with us

Entertainment

March Madness Is Very, Very, Very Profitable For The NCAA, Schools Participating, And Average Sports Bettors

The March Madness basketball tournament of the NCAA is now under progress. March Madness is very big business for all involved, including the NCAA, the teams participating, and online betting sites.

Published

on

The March Madness basketball tournament of the NCAA is now under progress. If you’re not a fan, you’ve probably seen friends on your social media feeds talking about their brackets, their alma mater, or their favorite teams. The March Madness tournament is the NCAA’s primary source of income for the entire year. The NCAA earned $1.05 billion in revenue from the 2019 tournament, or 90% of its typical yearly income. The $1.05 billion sum includes the revenue generated by the NCAA from the three-week tournament’s broadcast rights. In order to telecast the tournament, the NCAA agreed to a $10.8 billion, 14-year deal with CBS and Turner Broadcasting in 2010. That agreement was extended through 2032 for an additional $8.8 billion in April 2016.

The NCAA’s 2020 revenue was reduced by half, to little under $520 million, after the tournament was canceled in 2020 for the first time in its 81-year history. However, just in case the tournament had to be canceled, the NCAA purchased a $270 million insurance policy. The NCAA also implemented some drastic cost-cutting initiatives, which allowed the organization that oversees collegiate athletics to register a net loss of only $56 million in 2020.

Gregory Shamus/Getty Images

Getty Images/Gregory Shamus

The participating conferences also get a big payout from playing in the tournament. This year, for instance, the Pac-12 conference has four teams in the Sweet 16 round (USC, UCLA, Oregon, and Oregon State) – representing 25% of the 16 teams left in the tournament as of this writing. The final distribution of the tournament’s revenue among the participating conferences is determined by how well the institutions in each conference perform. According to the NCAA, the schools and conferences taking part in the yearly event receive around 96 percent of the revenue generated by the tournament. The basketball tournament’s budget was $170 million, or roughly 20% of the revenue the NCAA generates from television advertising. The conference of each team receives a payment known as a “unit” for each game it plays. In 2019, each unit was worth $280,000. A club can earn up to five units, or $1.4 million, if it advances to the championship game.

Since 2019, the number of bettors using these relatively new, legal internet choices has increased by more than 2000%. Eight million people will gamble in person at sportsbooks, compared to the 18 million people who will bet online. This comes as a result of the opening of 13 new legitimate online sports betting markets since the 2019 NCAA tournament. In essence, this means that 25 states and/or Washington, D.C., have allowed sports betting, and that 45 percent of adult Americans live in one of those states or in both. Around 47 million Americans are expected to wager on the NCAA basketball tournament, roughly the same number as in 2019. The wagers’ total value, though, is on pace to surpass the $8.5 billion record set in 2019.

Jason Robins, the founder and CEO of DraftKings, has become a billionaire as a result of the popularity of online betting. Since April 2020, the price of DraftKings’ shares has increased by 260 percent. In comparison to the prior year, DraftKings reported an increase in revenue of 146 percent, from $131 million to $322 million. Additionally, the website now boasts 1.5 million monthly active users, an increase of 500,000 from the previous quarter. DraftKings and other online betting firms should expect a rise in users and revenue during March Madness. Keep in mind that the global pandemic prevented the NCAA basketball tournament from taking place in 2020.

For its March Madness gamblers, DraftKings has added the traditional brackets. With 20,000 bettors and a $100 registration fee, the grand prize winner will walk away with a cool $1 million. The website also offers survivor pools, which are free to enter and award the first-place winner $1 million, in all 50 states, including those where internet sports betting is still illegal.