There is no doubt that March Madness is something that almost everyone is at least somewhat familiar with. Even if you don't actually participate in it, bet on it, watch it, or have much of anything to do with it, there is every chance that you're at least sort of familiar with what March Madness refers to. That's how important it really is. If you have somehow managed to be in the dark all this time, it refers to a time of year when college basketball teams are involved in playoffs. It generates all kinds of excitement, usually getting people to watch the playoff games when they don't even normally watch basketball in the first place. It also does something else. It generates a tremendous amount of money. If you're wondering how, the majority of it comes through betting. The rest happens as the result of ticket purchases as well as merchandise. If you're curious to see how much money there really is to be made off of March Madness, you can follow this guide that breaks it all down.
One thing must be understood here. If you even remotely believe that there's not a lot of money involved in March Madness simply because it's college teams that are playing instead of professional teams, think again. It doesn't matter if it's college or professional, there's always money to be made in Las Vegas when it comes to betting. That's where all of the sports-betting is handled, essentially because it's legal there. They have bookmakers out there that literally keep records on just about every type of competition under the sun, ranging from basketball to horse racing and everything in between. As it turns out, people love to bet and if given the opportunity, they will find a way to bet money on some of the silliest things you've ever heard. Imagine betting on whether or not it will be sunny or rainy when a particular game takes place, not to mention how many minutes into the game the first 3-pointer will occur. These are not things that are made up. It's all part of the process and it creates a tremendous amount of money.
In reality, college is really not that much different from the professional teams. At the very core of it all, it's always about making money. That's because money is the thing that makes it possible to function within the world. A college can have the best educational program in the world, but without money, they close their doors. The same is true with virtually everything else in life. You can have the best of intentions, but if you don't find a way to bring in the money, it probably won't do you any good. Colleges just have a different way of going about it than professional teams, largely because of NCAA regulations that place limits on the types of things they can do in order to generate income. That being said, it certainly doesn't stop the general public from betting on their favorite team or virtually anything else related to a game that's played during March Madness. If you're still in doubt, keep reading the find out how some of the numbers actually break down.
Betting on March Madness
Think about it this way. When was the last time that you were approached by someone in your office, asking you to bet on the team that would eventually win March Madness? Maybe you participated in brackets, yet there was some money behind it. If that's the case, then you're part of the betting public, whether you actually think about it in those terms or not. Last year, it was estimated that more than 10 billion dollars was made on through betting on March Madness alone. The thing that's really stunning is that the overwhelming majority of this money is actually made it legally. That doesn't necessarily mean that people are setting out with the intention of doing something wrong. For the most part, many individuals don't really stop to think about the possibility that what they're doing is illegal. There's a reason that so much betting takes place in Las Vegas, and that's because it's legal to bet there. That being said, there's an overwhelming number of states where betting is considered an illegal activity. That friendly office bet that has turned into something of a rivalry between friends just might be illegal. Chances are, you never thought about it that way. The truth of the matter is that almost everyone has bet on something at some point in their lives, even if it was only five or ten dollars. Most of the time, these are friendly bets among friends or coworkers and it's hard to remember that you might be participating in something that isn't legally allowed in your state.
What should you take away from all of this? In short, if you plan on betting on anything concerning March Madness or anything else for that matter, make sure that betting is legal in your state before you do it, not after the fact. There's nothing wrong with having that office bracket where everyone's trying to figure out who will eventually win. Putting money behind it is a different matter entirely. If you're worried about whether or not what you're doing is legal, do some research that's specific to your state. You might be able to bet on a particular game by going through the bookmakers in Las Vegas or you might be out of luck altogether. It all depends on where you live. Nevertheless, it doesn't change the fact that more than 10 billion dollars will probably be made on the next round of March Madness in 2019. In reality, those numbers are probably a lot higher, because some people who bet illegally are obviously not going to admit that they did.
If you stop and think about it for a minute, the amount of money involved just with the betting aspect alone is staggering. If ten billion dollars was made off of betting that could be tracked last year alone, imagine all the dollars that exchanged hands that no one ever found out about. In reality, that number could probably be realistically doubled or even tripled, but it's impossible to know for sure because all of those little office pools that take place as side bets in states where betting is illegal go unreported. That still doesn't change the fact that money will be made and lost off of March Madness in virtually every city in every state in the country, regardless of whether or not it's legal to do so. That is the reality of the situation. It's also not the only way that money is generated off of this event.
If you think gambling is the only way that money is made from March Madness, you would be sorely mistaken. As a matter of fact, the NCAA itself is not allowed to make revenue from gambling in any capacity. That goes back to those strict regulations that were touched on earlier. However, there are plenty of other ways that the organization can make money. In the end, they're just like everyone else. They have to find a way to bring in revenue in order to continue to exist as an organization. Without money, this is an organization that would essentially dry up and blow away, just like any other entity would without some cold, hard cash. It's widely reported that within the NCAA, they make up to 90 percent of their yearly revenue on March Madness alone. That's both amazing and somewhat terrifying, all at the same time. It really puts things in perspective when you're thinking about how popular March Madness is, especially when you consider that all but 10 percent of the NCAA's yearly revenue is made from this alone. It's also a little terrifying from a business standpoint, because they're doing exactly what your parents and grandparents probably taught you not to do, putting all of their eggs in one basket, so to speak. In other words, they are relying on the continued popularity of March Madness in order to continue to exist as an organization. If anything were to go wrong with that particular business model, there would be serious consequences, to say the least. In the private sector, this would be a recipe for disaster but the NCAA has been making it work for a number of years now.
Just exactly how do they generate all of that revenue in the span of 30 days? The most obvious way that they generate revenue is through the sales of tickets. They depend heavily on good attendance for each and every event that takes place throughout the duration of March Madness and more often than not, they get exactly what they want. In most cases, March Madness events are sold out well in advance. They also cost a lot more than your standard college basketball game, so if you plan on going to one, be prepared to shell out a few hundred dollars (or more) in order to get your hands on that prized seat. Of course, there's a lot more to the revenue that's generated by March Madness than just ticket sales. You might even go as far as saying that the NCAA's revenue has three major points to it, with attendance being only one of those points.
The other two ways that they make money involve fees charged to the media in order to gain rights to replay sections of the games and through corporate sponsorships. Obviously, corporations want to get in on the action. This is an extremely popular activity that almost the entire nation becomes enthralled in. It only makes sense for corporations to have a desire to be involved. For them, the bottom line is the same. They want to make more money. If they can get behind the whole idea of March Madness and convince fans to purchase their products because they sponsor a portion of the event, then everybody wins. The NCAA gets a hefty payday for allowing such sponsorships and the corporation in question has the opportunity to increase sales of their products or services by leaps and bounds. The general public has a tendency to purchase things that they can identify with. Therefore, if a specific corporation comes in and sponsors March Madness, dedicated basketball fans are more likely to buy that particular brand. This involves simple research about marketing that's been widely available for years and it's been proven time and time again.
What about selling rights to the media in order to replay parts of the game? You have probably been watching the news once or twice when someone said that they would like to show you highlights of a specific game but they weren't allowed to. There's a relatively simple reason for this. It's because they don't have the rights from the parent organization to show you those highlights. Remember, money makes the world go round and round. Without it, nothing gets done. Therefore, news organizations have to pay the NCAA for rights to show clips during their newscast. The individual price varies from city to city and event to event, but the NCAA makes a hefty sum of money off of this, especially during March Madness.
You already know that at least 10 billion dollars were made from gambling on March Madness last year alone. When you add in ticket sales, media rights and those all-important corporate sponsorships, you're looking at adding an additional one billion dollars do the NCAA's coffers. That brings the recorded total to 11 billion dollars, and that's just for one year. There's no doubt that it will go up this coming March, as prices have a tendency to steadily increase for just about everything.
The next time you're watching a game during March Madness and you think it's just a game, stop and think about the enormous amount of money that is involved behind it all. March Madness is an event that generates the interest of almost everyone in the United States and in some cases, beyond. The money to be made there is something that eclipses even the wildest dreams of most individuals. March Madness is much more than just a series of basketball games. In reality, it is its own money making machine that generates enough revenue for the NCAA to continue operating for the next year.
Written by Garrett Parker
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