Baylor’s National Championship Caps Mad Month of NCAA Tourney Business

Baylor smothered Gonzaga 86-70 on Monday night en route to winning its first men’s basketball national championship. The game also marked the conclusion of a tumultuous month of March madness for the NCAA both on and off the court. After cancelling last years tournament entirely, the NCAA undertook two bubble competitions this spring- the men’s in Indianapolis and the women’s in San Antonio- which was won by Stanford on Sunday night- in an effort to overcome the pandemic and restore some bit of normalcy.

But as college sports’ governing body pulled off the seemingly impossible—while keeping its biggest revenue stream intact in the process, it was also caught up in a number of other storylines, several of them unexpected, and a few of them controversial. Every day of the tournament, Sportico provided a snapshot of the business of the Big Dance. Here, as the final confetti is being swept up, are some of the most interesting.

Let’s Start With the Numbers

The bulk of the NCAA’s roughly $1 billion in annual revenue (in a non-COVID year) comes from its men’s postseason tournament. Most of that money comes from the NCAA’s March Madness broadcast deal with CBS and Turner, which will pay the organization an estimated $850 million this year, according to NCAA financial documents. With the tournament played almost in its entirety (an early VCU-Oregon clash was canceled due to COVID-19 protocols), the NCAA should earn most, if not all, of that revenue.

In turn, the NCAA distributes those dollars back to its members. Some of that money is awarded based on performance in the men’s tournament. With each game played this year earning around $2 million for the participant’s conference, the Pac-12 wound up with a surprising payday—even if UCLA sponsor Under Armour didn’t. The conference will eventually get more than $38 million from the NCAA from this year’s success, according to Sportico’s calculations, much of which they can thank the Bruins’ First Four to Final Four run for (lot of for/four’s there). The Big Ten will take home more than $34 million; the Big 12 more than $32 million, all paid out over a six-year span.

The Pac-12 also produced both teams that played for the women’s tournament title: eventual champion Stanford and runner-up Arizona. But the conference’s success there won’t come with any financial rewards. Unlike the men’s version, there’s no compensation for participation in the women’s NCAA tournament for schools or their conferences. Even teams that play in the NIT (the other men’s basketball tournament for teams that don’t qualify for March Madness) get rewarded for their participation in a way the top-tier women’s teams don’t.

Those inequities, from the financial to the more practical, were a central story during this year’s postseason campaigns. From the way the NCAA views its men’s and women’s properties differently to the way it actually values them, the 2021 tournament put the association under a microscope.

–Emily Caron, Sportico Sports Business Reporter

From the Hard Court to the Supreme Court

The NCAA had another tournament of sorts in March—and one with much higher stakes.

On the last day of the month, the U.S. Supreme Court heard oral arguments for NCAA v. Alston, the federal antitrust case that centers on the legality of colleges, through NCAA rules, limiting how much they pay and compensate student athletes. A majority of the justices severely criticized NCAA treatment of college athletes. “They are recruited,” Justice Samuel Alito bemoaned, “used up and cast aside.” Justice Brent Kavanaugh bluntly charged “schools are conspiring with competitors to pay no salaries to the workers who are making the schools billions of dollars, on the theory that consumers want the schools to pay the workers nothing. That seems entirely circular and somewhat disturbing.”

A ruling is expected in June or July. If the NCAA loses, colleges would likely be able to pay college athletes for education-related expenses, offer scholarships for graduate programs and allow them to pursue post-eligibility internships. The changes wouldn’t end amateurism but would advance one of the goals of the #NotNCAAProperty player movement that surfaced during the tournament. The group, led by Rutgers guard Geo Baker and several other players, draws on language used by Curt Flood in his historic case against Major League Baseball to stress that players aren’t property. The group also seeks NIL rights for college athletes. While the NCAA has punted on that topic, the nonprofit might now revisit its legal playbook in light of the prospect of losing the most significant college sports law Supreme Court case in decades.

–Michael McCann, Sportico Legal Analyst

TV Ratings Slip—But Show Signs of Life

While the ratings for the Final Four and the title game were not available at deadline, the men’s TV deliveries have largely met the audience guarantees that CBS and the Turner Sports networks made to their advertisers back in February. Through the Elite Eight round, or 64 of the tourney’s 67 games, March Madness broadcasts averaged 3.37 million viewers, which marks a 12% decline versus 3.85 million during the analogous period in 2019. In light of the beating sports TV ratings have taken since the Big Restart—among the events that experienced the most significant year-to-year drops are the Daytona 500 (-34%), the College Football Playoff National Championship (-27%), November’s Masters (-58%) and the NBA Finals (-49%)—that relatively moderate decline may be the first sign that audiences are finally beginning to make their way back to the tube.

If the men’s tourney is in any danger of suffering a massive decline in viewership for its final three frames—as unlikely as it seems that the bonkers OT UCLA-Gonzaga game may have failed to put up big numbers, it’s worth noting that TBS reaches around 12 million fewer TV homes than does CBS—the March Madness deliveries are also likely to be hampered by a historic geographic aberration. For the first time in the history of the tourney, not a single school based in the Eastern time zone (home to 49% of the nation’s TV homes) managed to advance to the Final Four. Regional bias is no myth, especially when college sports are in play, and even the slightest dip in interest for fans in those 58.1 million households means that CBS entered the home stretch at a distinct disadvantage.

The same cannot be said for the women’s tourney, which has been the beneficiary of a far more inclusive scheduling scheme. ESPN this year brought an end to the longstanding policy of reserving its national TV windows for the latter rounds of the tournament, substituting a full-on coast-to-coast slate for its customary regional whiparound coverage. As expected, opening up the early rounds to a wider audience paid off with an overall lift in deliveries, but the most significant improvements came as ESPN’s broadcast sibling ABC stepped into the fray. Ratings for the network’s coverage of the UConn-Iowa Sweet 16 game grew 129% versus the applicable game in 2019, as the Huskies and Hawkeyes served up the all-time second-largest audience for a women’s regional semifinal matchup. UConn’s subsequent game against Baylor now stands as the most-watched non-Final Four/Championship telecast in 10 years.

If shifting some of the high-impact women’s game to a broadcast platform with an 18-million-household reach advantage has made for a series of apples-to-Applebee’s comps with the 2019 tourney, the move to make the contests available to a wider swath of people is proof positive that Disney is bullish on March basketball. And the impact of the ABC games was apparent in the turnout for the Final Four telecasts, which aired on ESPN. Per Nielsen, Friday’s doubleheader averaged 2.18 million viewers, up 21% versus the 2019 deliveries (1.81 million). In the late game, Arizona’s 69-59 win over UConn averaged 2.69 million viewers, up 26% from the comparable Notre Dame-UConn semi on ESPN2 two years ago, and marking the biggest draw for a Final Four telecast since 2017.

–Anthony Crupi, Sportico Sports Media Reporter

Social Growth Boosts Earnings Potential

March Madness was a breeding ground for players’ personal brands and social media, with the average Final Four starter seeing a roughly 20% bump in followers in the two weeks preceding the final weekend of the men’s and women’s tournaments.

Some players’ accounts blew up overnight. Arizona’s Aari McDonald went from 11,279 followers on the platform to 25,114 within 24 hours of leading her team to an upset over UConn in the Final Four. Speaking of the Huskies, star guard Paige Bueckers picked up more than 100,000 new followers during the tournament, a number exceeded by Oregon’s Sedona Prince and the roughly 170,000 new followers she gained after her viral video exposed inequities between the weight rooms in the men’s and women’s bubbles.

In general, the women’s basketball players are just as popular on social media as the men’s players, if not moreso. Bueckers, the first ever freshman to win AP National Player of the Year, now has nearly 800,000 Instagram followers, more than the 20 men’s Final Four starters combined. Numbers like those could be monetized for hundreds of thousands of dollars as soon as next year if NIL reforms are enacted.

–Lev Akabas, Sportico Data Reporter

Sportico published one short business highlight every day during the three-week NCAA tournament. Here is the full list of March Madness stories:

March 18: The NCAA’s Billion-Dollar Empire is Built on Basketball

March 19: How Much is an NCAA Tournament Win Worth?

March 20: Men’s vs. Women’s NCAA Tournament Money

March 21: Indexing the NCAA’s Corporate Sponsors

March 22: Largest Financial Mismatch Produces Biggest Upset

March 23: As Top Seeds Lose, Sportsbooks Win

March 24: #NotNCAAProperty Reaches Millions Online

March 25: Sidelined in 2020, TV Advertisers are Back in Force

March 26: Loyola’s Rambling Flutie Effect

March 27: Juwan Howard vs. Dawn Staley Money Matchup