CBS Sports has held the broadcast rights to the NCAA tournament since 1982. Neal Pilson, the former president of CBS Sports (currently the head of the consultancy Pilson Communications), negotiated the deal and called the network’s decision to take the risk and spend nearly $50 million on a collegiate basketball tournament – at a time when the NIT still maintained some prestige – “the single most important sports deal” made in the company’s history (except for possibly the decision to get back into the NFL in ’98). It’s hard to argue against the point. The tournament enables the network to dominate 3 weeks every winter (in aggregate, the 67 games draw more viewers than the Super Bowl) and CBS has finished as the “most watched network” 15 of the last 16 years.
Howie Long-Short: The value of the March Madness television package has grown exponentially since CBS first landed the broadcast rights to college basketball’s post-season tournament in 1981 for $48 million (for 3 years). Since 1986, the cost of carrying the NCAA tournament has risen 4,535% – which explains why the company eventually sought out a partner capable of picking up half the tab. In 2011, CBS and Turner Broadcasting agreed to a 14-year, $10.8 billion deal with the NCAA that gives them the exclusive rights (includes streaming) to the tournament through April ’24. That deal has since been extended through 2032 for an additional $1.1 billion/year.
While March Madness is the “most profitable” post-season entity (it does not generate more revenue than the NFL post-season), one should not be evaluating billion dollar TV rights deals based on the profit and losses of a single event. CBS’ deal with the NCAA needs to be looked at in its totality. The network’s regular season package is more valuable to advertisers because they own the rights to the tournament and the prestige the network gains from its association with college basketball makes the remainder of their programming more appealing to potential sponsors. Remember, CBS bought back into the NFL in ’98 because it cost them more to pass on carrying games (in the loss of sponsors) than the $2 billion they paid to re-acquire the rights.
Television viewership is declining, but advertising revenues for the annual basketball tournament continue to rise (+3-5% YoY since ’14). Kantar media reported March Madness ad revenues climbed from $1.285 billion in ’17 to $1.32 billion in 2018 and TV News Check stated the networks were able to command a 5-6% increase on ad inventory rates this year (spots are 95% sold). The NCAA tournament remains a hot property for advertisers – even with fewer people watching and rising CPMs – because of its ability to capture an engaged, attractive demo (see: young, college educated, spending power) en mass.
Fan Marino: Bracket pools have transfixed how sports fans watch and engage with March Madness. While it’s been said that the first bracket pool was held in ’77 (on Staten Island), when CBS first acquired the rights to annual tournament a few years later, “bracketology” had yet to make its way into the public lexicon; in fact, CBS held the first televised selection show in 1982. It wasn’t until the tournament expanded to 64 teams in 1985 – thus increasing the possibility of upsets – that fan interest in the tournament truly exploded. By the early 1990s – coinciding with the rise of ESPN – filling out a bracket became commonplace. This year more than 40 million people will fill out 119 million+ brackets.
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