Thursday, March 22, 2012

The Madness Continues

Last week the NCAA Men's basketball tournament began, and after a slow start on Thursday with little drama, Friday saw some major upsets including losing two #2 seeds for the first time ever in the first round.

I wrote last week about the NCAA and the amount of money they generate from the tournament, but left one thing out of that equation. I was at the first round games in Albuquerque last week in order to see Harvard play in the tournament for the first time since 1946 (unfortunately they lost).

Joining me, along with my brother, were 10,772 other people. Ticket prices ran between $70-$90 a piece. So just guessing the average price was $75, that would be $808,050. In addition, parking was $20. Again just for quick assumptions, guessing that on average 1/3 of the people paid for parking. That would mean they took in $71,813 in parking fees. We spent $15 on concessions, and although I know that is low, I am going to use that as our average, so at $15 per 2 people that's an additional $80,790. I don't have any idea what they sold in terms of shirts, programs, etc., but I do know they were out of Harvard shirts at $25 a piece, so that's even more revenue. But without those numbers they brought in $957,653. That doesn't include other advertising revenue or what they charged for the suites.

There were 8 locations running games, with two sessions each so approximately $15 million over the four days. At the end of the tournament this will add up to some serious money.

And, this is with average attendance going down over the last few years. The decrease in attendance happens to coincide with them adding more teams to the tournament, but that does not mean it's a causal relationship but certainly there is a casual relationship between the two. The other thing that has been blamed is the quality of the game being played.

Last night on the Charlie Rose program, Jay Bilas from ESPN made this very claim and said that the one and done in college basketball is hurting the quality of the product and he is very concerned but isn't necessarily seeing that concern from others.

What Bilas also said was that he didn't have any problems with athletes who played their one year and then went to the pros, or the programs that recruit these athletes with that in mind. They are following the rules and the kids are doing what they dreamed of doing, which is playing in the NBA. Where I do think he was wrong, however, was when he tried to compare this to other major sports. There are very very few football players who leave after only one year playing college football. Most who leave early are juniors. In baseball if you choose to go to college rather than signing out of high school then you cannot be drafted again until your junior year. So there are some things that can be done to address this issue.

Bilas' overall point was that the NCAA has to do something now or they will be facing some very serious issues in the near future, and 90% of the money that supports the operation of the NCAA comes from the basketball tournament so something needs to be done. I have to say that I think some of their attendance issues relate to the amount they are charging for tickets. As I said, tickets for the first round were $70-90 a piece. I wouldn't pay that much to attend a basketball game. I paid about half of face value for my tickets. Only twice have I paid that amount for tickets. Once was to attend World Series games (which, for me, is a much bigger deal than the NCAA tournament). The other time was to attend the last game ever at Yankee Stadium.

These prices are out of the reach of a lot of people. The median hourly income is $12.68. That means that after taxes, you would have to work a full day to afford just one ticket. Is that reasonable? And that does not include parking or food. Most people have been priced out of the market.

The problem is they are still making so much money that I don't think anything will be done, because if people see the money rolling in they don't think they have to do anything and they can ignore the problem until it's too late. The question then is how many more years does the tournament have before they see serious problems in attendance and revenue?

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