NCAA’s Tourney Expansion Could Force CBS Out Of The Picture

After months of speculation, the NCAA is set to reveal its future.  On April 29, NCAA President Jim Isch will announce the organization’s decisions on expanding the tournament and opting out of its current media partnership with CBS.

The NCAA is looking for a victory like Davidson's Stephen Curry (Image via meetnowlive.com)

It is likely the NCAA will ditch CBS for Turner Sports or ESPN.  As  Sports Business Journal points out, CBS is no longer the attractive media partnership it once was.

The NCAA has only three years left in its original 11-year, $6 billion contract with CBS.

But because of heavy escalators included in the agreement, the remaining years will cost the NCAA $2.13 billion, which is more than one-third of the contract’s total value.

Right now that price doesn’t seem worth it.  Despite the highest tournament ratings in years, CBS was unable to make a profit.

But the network could remain in the picture.  If the NCAA turns to Turner Sports, CBS will serve as a partner to the cable channel.   Under this scenario, the tournament will air on CBS and Turner on alternating years.

Though CBS’ experience makes the Turner option extremely attractive, ESPN’s unparalleled expansive digital and cable networks makes it a top contender.

This type of access will be necessary if the NCAA chooses to expand the tournament to 96 teams, which is likely to happen.  The organization derives nearly 100% of its income from the March Madness tournament each year, and expanding the number of participating teams from 65 to 96 is expected to boost this number.

The Real Winners In The NCAA

The Louisville Cardinals dominated the NCAA this year in terms of profits. (Image via Zimbio.com)

This year’s March Madness has been full of unexpected NCAA winners and losers.  While several Cinderella teams have dominated the scoreboard so far, these lesser-known athletic programs can’t always compete when it comes to dollar signs.

As dictated by the Equity in Athletics requirement, colleges are required to file any profits they generate over the course of the year. Darren Rovell at CNBC scoured the documents.  Here is some of the information he found:

• The most profitable NCAA team was the Louisville Cardinals.  The Cardinals, who made it to round two of the tournament, reported a profit of $16,869,659 for 2009.
• Only one of the 15 most profitable NCAA programs – Michigan State – made it to the Final Four.
• Nike was the biggest winner.  It had apparel/gear partnerships with six of the ten most profitable NCAA schools.  Adidas lagged behind with four, while UnderAmour was completely edged out.
• Duke reported a $2 million loss.  While this may come as a surprise, the University warns it is because the basketball program’s income was shared through out the athletic department.

Here are the 15 most profitable NCAA teams, as reported by CNBC.com:

Rank	Program	2009 Profit	Madness Success
1.	Louisville Cardinals	$16,869,659	Round One
2.	Ohio State Buckeyes	$11,417,941	Sweet Sixteen
3.	Wisconsin Badgers	$9,454,260	Round Two
4.	Syracuse Orange	$9,032,878	Sweet Sixteen
5.	Minnesota Golden Gophers	$7,843,045	Round One
6.	Kansas Jayhawks	$7,517,783	Round Two
7.	Tennessee Volunteers	$7,111,804	Elite Eight
8.	Texas Longhorns	$6,878,617	Round One
9.	Michigan State Spartans	$6,561,127	Final Four
10.	Kentucky Wildcats	$6,157,308	Elite Eight
11.	Maryland Terrapins	$5,902,659	Round Two
12.	Oklahoma State Cowboys	$5,886,238	Round One
13.	Pittsburgh Panthers	$5,762,520	Round Two
14.	Georgia Tech Yellow Jackets	$5,334,856	Round Two
15.	Xavier Musketeers	$4,853,052	Sweet Sixteen

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Upsets Like Northern Iowa’s Victory Over Kansas Turn Away Viewers

If you’re like me, your March Madness bracket has been reduced to nothing more than a series of scratched out teams.

Northern Iowa's Ali Farokhmanesh led his team to defeat No. 1 Kansas. Though they make great games, these upsets have shunned viewers. (Image via gather.com)

Big teams who typically dominate the tournament, such as Villanova, Notre Dame, and Georgetown, were booted in startling upsets by schools like St. Mary’s and Cornell.

And every one knows how the number one team in the country, Kansas, was sent packing by number nine seed Northern Iowa.

While the success of these Cinderella-esque teams has led to excitingly close games and compelling character-driven stories, it hasn’t made for good TV, according to Tom Van Riper at Forbes.

In his article “Too Many Cinderellas,” Van Riper argues that the lack of big name schools winning in the tournament has hurt CBS’ ability to attract viewers.  This, in turn, could affect the NCAA’s big plans for next year:

If television ratings suffer during upcoming rounds, it could complicate two options the NCAA is considering for next season: an expansion of the tournament to 96 teams from 64, and whether to exercise its right to opt out of its 11-year, $6 billion television deal with CBS, which has three more years to run.  Experts see the latter decision as more likely to be affected by a dip in ratings.

The NCAA planned to shop around the rights to March Madness because they felt that other networks – such as ESPN, which has expressed interest in obtaining the tournament – would pay more than the expected $1.5 billion.

But with declining viewership, this sale will be a much greater risk.  “CBS scored a 5.3 overnight rating through the first two rounds, according to Nielsen, down slightly from last year,” Van Riper reported.  If top seeded schools like Duke, Kentucky, and Syracuse can’t make it through the next round, these ratings will plummet.

The fact that number nine seed, Norther Iowa, was able to topple the team at the top of the bracket was extremely exciting.  But when the championship game is between two teams such as Xavier and St. Mary’s, the tournament loses its luster and viewership declines.

This would not only hurt the NCAA and CBS, but also the tourney fans who were excited to see a sports-dedicated channel like ESPN cover the number one college event in sports.

No More Free Swag For College Basketball Stars

No more free gear will be handed out in the NCAA tournament this year (image via nbccamps)

College basketball’s top athletes are constantly bombarded with free swag, ranging from top-of-the-line basketball shoes, to work-out gear, and even iPods.

March Madness is typically no different, but last summer Big Ten, Pac-10, and Mid-American officials decided to halt the distribution of all tournament gifts this year as a way to cut costs, the Sports Business Journal reports.

Though an effortless cut, the absence of these gifts will greatly pay off.  The MAC expects to save $40,000, while Pac-10 and Big Ten expect to drop more than $300,000 from this year’s expenses, according to Sports Business Journal.

But the rest of the conferences were not convinced the trade-off would be worth it.

So while players in the Pac-10, Big Ten, and MAC will be going home empty-handed, their fellow athletes in the ACC will receive a Nintendo Wii package and an Under Armour backpack.

SEC players get to walk away with one of the following: a Garmin Nuvi GPS, Sony digital camera, Apple iPod Touch 8GB, Flop MinoHD camc order, or Wenger two-tone touch.

Athletes in the NCAA will be given a bench chair, Jostens ring, Fossil watch, backpack, Wilson mini-basketball and commemorative ticket. And if they make it to the Final Four — a piece of the playing court, Sports Business Journal reports.

College Basketball Coaches: The New CEOs

Everyone is quick to bash corporate CEO’s for taking home “undeserved salaries” that don’t line up with the income they generate.   But it seems people should be in arms about college basketball coaches — not just CEOs.

John Calipari at University of Kentucky is the highest paid college basketball coach (image via usatoday)

According to Forbes, at least 25 of the 347 Division 1 college basketball coaches now earn more than $1 million annually.  And this excludes all bonuses and other potential benefits.

Of course, college basketball coaches are undoubtedly a great resource for universities.  Successful athletic programs often drive surges in applications and alumni giving, which translates to huge income increases for the school in the long run.

The market for school coaches is also extremely competitive: there are very few truly magnificent coaches who wish to remain at the college level.  These honchos must be wooed — not only to stay at the same school, but also to not stray to the NBA.

This results in salaries that can equal up to 10% of the revenues the basketball program provides.  Take Kentucky’s John Calipari, for example.  Calipari, who is the top paid college basketball coach according to Forbes, just signed an eight-year, $32 million deal for a program that generates $35 million a year.

As Tom Van Riper at Forbes points out, “the corporate equivalent for Calipari’s pay package would be Microsoft handing Steve Ballmer $6 billion a year.”

But do these college basketball coaches’ salaries accurately reflect the success of their programs?

Here are the highest paid college basketball coaches and their records. You decide:

COACH	SCHOOL	INCOME	CAREER RECORD	TOURNAMENT APPEARANCES	TITLES
1.  John Calipari	University of Kentucky	$4 million	441-139 (.762)	11	None
2.  Billy Donovan	University of Florida	$3.3 million	360-152 (.703)	9	2
3.  Bill Self	University of Kansas	$3 million	403-146 (.827)	11	1
4.  Thad Matta	Ohio State University	$2.5 million	250-84 (.749)	7	None
5.  Rick Pitino	University of Louisville	$2.25 million	568-199 (.741)	13	1
6.  Mike Krzyzewski	Duke University	$2.2 million	856-278 (.755)	25	3

Source: Forbes

Get Screwed At The Super Bowl and Receive March Madness For Free

Remember the CareerBuilder Super Bowl ad where everyone in the office was in their underwear?

Remember the Dockers ad right after it where everyone was similarly missing their pants?

Or maybe you thought they were the same ad?

CBS  screwed up when they placed the two commercials back-to-back.  Many viewers believed them to be a single CareerBuilder ad, thus potentially making Dockers’ $3.5 million dollar investment a waste.

Jennifer Sey, VP of global marketing for Dockers told Ad Age:

Executives at Dockers were somewhat disappointed that we ran immediately after the CareerBuilder spot, given the visuals were similar, though we definitely felt the spots were very different.

To make up for their blunder, CBS is going above and beyond the norms of customer service.  According to Ad Age, CBS gave Dockers three 30-second spots during March Madness.  For free.

And it’s not even like CBS was forced to extend the offer to fill ad space.   According to Sports Business Digest, companies have been fighting to get in on the action during March Madness:

CBS has [already] sold more than 90 percent of the available ad time for its coverage of the National Collegiate Athletic Association’s men’s basketball tournament. Both pricing and total sales are up compared to last year.

While CBS probably should have spaced the two ads apart, in the end, Dockers lucked out.  The clothing company has repeatedly stated that the Super Bowl ad, which reached 106.5 million people, was successful in improving sales.

And now, on top of that, they are receiving three 30-second ads that go for as much as $1 million dollars each.

Did CBS owe the three spots to Dockers after airing the commercials back-to-back?

Watch the ads and decide for yourself.

March Madness Just Got Even Better

CBSSports.com revamped its NCAA March Madness On Demand video player just in time for the first round of games on March 18.

Like last year, NCAA March Madness on Demand will stream every men’s NCAA championship game from the first round through the finals.

But now, users can also check out screen-in-screen highlights and access a wide range of statistics (including tournament and game leaders in points, assists, rebounds and three-pointers) that will overlay the game they are watching these live streaming games.

CBSSports is making sure you miss none of the March Madness action (image via CBSSports)

Another great feature of the video player is the Boss Button.  The Boss Button hides and mutes your game when pressed to give the appearance that you were not just watching college hoops.  According to a statement released by CBS Sports, it was clicked more than 2.77 million times last year.

Not only are these features great for viewers who can’t access a TV, but they are great for CBS Sports as well.

According to the release,

In 2009, the CBSSports.com production of NCAA March Madness on Demand recorded 7.52 million unique visitors in 2009, a 58% increase over 2008 figures.

Additionally, there were 8.6 million total hours of video and audio consumed, a 75% increase over 2008 figures.

Check out the NCAA March Madness On Demand video player on March 10 to see all of your favorite NCAA tournament highlights and get pumped for this year’s games.