In a way, it’s fitting that all three have done well, and that the familiar conference dogfight in Kansas City is their send-off to the Big Dance. All have helped make this region the basketball nirvana that is—with all due respect, of course, to New York and its claim to be the Basketball Capital of America.
Dozens of college basketball teams made their way here this month, with the 24 teams in the Big 12—men’s and women’s—perhaps the biggest draw. But small-college ball reigns as well, with 32 teams seeking the NAIA Division I men’s title, all the way down to the regional MIAA conference’s men’s and women’s tournaments.
The big money, though, flows through the big schools—KU, MU and K-State. While it’s not unheard of for all three to be in the NCAA tournament hunt together, rarely have expectations for them as a group been this high. Absent a fairly shocking first- or second-round exit by any of them, those schools should be able to measure the impact of the 2010 NCAA tournament in big-time dollars. Just how much won’t be known for more than a year, but for anyone who wonders what the big deal is about March Madness, the numbers provide a good look.
The NCAA, which has helped market this rite of spring into one of the biggest sporting interests in America, distributes tournament money to college conferences based on a formula that looks like something Albert Einstein was still trying to unravel when he died. The upshot, though, is that Big 12 conference schools this year will divide a $17.9 million pie from appearances in the 2009 tournament.
Some of that is dished out equally, but there are perks to surviving and advancing. A portion of the total goes to individual schools based on the number of tournament games each plays. Or, as conference CFO Steve Pace wryly observes, “Like we say in east Texas, you eat what you kill.”
MU and Oklahoma will each dine on about $900,000 extra for making it to within a game of the Final Four last year, on top of the roughly $1.2 million that goes to each conference school. And because the NCAA calculates annual distributions on a rolling 6-year average, KU’s national championship run in 2008 is still paying dividends in the formula for conference distributions.
Then there’s revenue from television broadcasts and ticket sales for the Big 12 Conference championship tournament, held in Kansas City this year. Pace estimates that the take from the men’s and women’s tournaments, divided equally in the conference, will earn about $500,000 for each of the 12 teams.
But wait! There’s more: Universities also haul in royalties from the sale of licensed merchandise. And that’s where long-term success of basketball haves stands out from the have-nots. Jim Marchiony, assistant director of athletics at KU, said the yield there was on a generally consistent level until a sharp surge followed Final Four appearances in 2002 and 2003. That pushed annual revenues above the seven-figure mark.
Then came 2008.
“Royalties went up considerably,” he said. “We went to the Orange Bowl in football and won the national championship in basketball within a four-month period, so that was an unusual year.”
With a team favored by many to sweep into the Final Four again this year, folks in Lawrence are hoping for another spike. While royalties already were doing well as the team closed in on the 30-victory mark, the upcoming tournament is where the real money is made. “The difference-maker,” Marchiony said, “comes the further you progress in the NCAA tournament.”
Royalties are a bit of a different animal at the University of Missouri, were back-to-back appearances in the Big 12 football championship game in 2007 and 2008 drove sales up. Linda Gilbert, MU’s trademark and licensing administrator, said that basketball interest was up, this year, but that the big tickets were punched by Gary Pinkel’s teams.
One reason for that, she said, is the climate. “Football has been carrying us, and typically, except for maybe KU, football is your largest royalty-bearing product because so much of it is outerwear,” Gilbert said. “That costs more than T-shirts or lightweight sweatshirts. They don’t buy a lot of outerwear for MU basketball, but they sure do for football.”
Still, she acknowledged, an Elite Eight appearance last year paid off at the cash register, and for the quarter ending in December, royalties were up 16 percent compared with the same period last year.
Because royalty revenues there are reported on a one-quarter delay, K-State won’t know for sure how big a pop this year’s basketball success will have generated until June, said Reid Sigmon, associate athletic director for administration.
“Anecdotally, though, yes: licensing sales are up,” Sigmon said, and Steve Levine, co-owner of Aggieville icon Varney’s book store, said sales trends suggested that new customers were snapping up the goods, rather than the season-ticket holders and regulars. Sigmon attributed some of the increased interest to the basketball program, but noted that the return of football coach Bill Snyder had also impacted sales.
K-State pulled in nearly $1 million in royalties two years ago, and is hoping to top that this year. One other measure of interest that will provide revenue, Sigmon noted, was that sales of K-State gear had just begun for the first time last month at Kansas City International Airport. “That was exclusively KU–MU for sales” until now, he said.
Beyond athletic department income, the extra attention on the university can translate into increased enrollment, as well. That’s important because it involves not just the next cohort of students and their tuition dollars, but potential graduates who, after all, may become key program donors of the future. KU, for example, saw some of that interest spike in 2008, Marchiony said, when the
university’s Internet servers recorded record numbers of Web page hits.
On a regional level, Kansas City itself has long economic ties with the conference tournament, for decades an annual affair here. After the Big 12 formed in 1996, the conference began spreading the title-game wealth around Southern Division communities like Dallas, San Antonio and Oklahoma City, coming back here every other year.
Even that biennial presence, though, has a profound economic impact. This year, the four-day tournaments for both men and women injected an estimated $20 million into the regional economy, according to the Kansas City Convention and Visitors Association. Hotels, bars, restaurants, gas stations and more reap a windfall as thousands of visitors pour in for games at the two Downtown venues, Sprint Arena and Municipal Auditorium.
As impressive as the figures can be for the tournament regulars, nothing appears to hold a candle to the value of free publicity that’s accorded to the NCAA bracket’s Cinderellas—especially if they hit the mother lode with a Final Four appearance.
Consider the 2006 run of George Mason University, which made the improbable journey through the bracket to the championship weekend. Over the next two years, according to George Mason’s Center for Sport Management, admissions inquiries to GMU increased 350 percent, freshman applications increased 22 percent and—this is a big one—the number of active alumni (read:
potential donors) increased 25 percent.
Attendance at men’s basketball games soared, and in just one year, season ticket sales doubled. The school placed the value of free media attention earned during those three weeks—print, broadcast and online—at an astonishing $677 million.
That, then, is the answer for anyone who wonders what the big deal is about March Madness.
Now, let’s play some hoops. 