Tuesday, March 30, 2010

Jordan Kobritz - NCAA Tournament Expansion

If you’re one of the millions of people engrossed in watching the NCAA men’s basketball tournament when you should be doing something more productive, you may get an opportunity to be even less productive next year.

The NCAA has an opt-out clause in its 11-year, $6 billion contract with CBS, which must be exercised by July 31 of this year. With three years and approximately $700 million per year remaining on the existing contract, you might think the NCAA would be reluctant to forego a sure thing in this economy. Think again.

As long as ESPN retains its dual revenue model – selling advertising, like the networks do, and reaping a subscriber fee from every cable system in the country, which the networks can’t do – there’s a very good chance there’s more money to be made in a new contract. And the NCAA likes nothing - not even power - more than it likes money. Almost 95% of the governing body’s revenue comes from the men’s basketball tournament. And unlike the BCS boys, who have left tens of millions of dollars on the table by foregoing a football playoff, the NCAA is forever in pursuit of greater riches.

The NCAA has leaked the possibility of an expanded tournament, from 64 teams to 96. A 50% increase in teams means hundreds of additional hours of TV time, and additional opportunities to recoup a higher rights fee. If the expansion happens, it won’t be called what it is – a money-grab. Rather, the NCAA and its new “partner” will trot out someone with the credibility of an Ari Fleischer to make the rounds of the talk shows promoting the move as an opportunity for more teams to make the tournament.

If that’s the goal, then why not allow every team – currently there are 347 Division I basketball programs in the country – in? That’s the ultimate definition of equality. It would give every coach in the country the right to add “NCAA Tournament Appearance” to his resume, although contract bonuses for making the tournament would become problematic.

If the current format is retained – top seeds play the bottom seeds in the first round - few of the additional 32 teams will have even a remote chance of winning a single game. No #16 seed has ever beaten a #1 seed, meaning at least four teams under the current format are guaranteed of playing a one-and-done tournament schedule. If the expansion happens, you can add most of the additional 32 teams to those four. Even if one of those teams is lucky enough to persevere in their first game, don’t hold your breath hoping they’ll win the tournament. In the past 21 years, the lowest seed to win the whole shooting match was #4 seed Arizona in 1997.

And don’t think an expanded tournament will mean more revenue for your favorite team, unless that team – and its conference - is currently successful. The NCAA distributes revenue based on a formula that rewards tournament success over a five-year period. Under an expanded format, successful teams - and conferences - can expect to receive even higher payouts. In other words, the rich will get richer. What a unique concept.

The NCAA’s basic purpose, as set forth in its constitution, is to “…retain a clear line of demarcation between intercollegiate athletics and professional sports.” An expanded basketball tournament is hardly a way to emphasize that point. The NCAA would be mimicking professional sports, which, come to think of it, they’ve been doing a pretty good job of lately. The governing body keeps a tight rein on student-athletes, depriving them of the basic rights afforded the rest of us by the U.S. Constitution. That same policy gives the NCAA and its member institutions the exclusive right to generate billions of dollars off the sweat and labor of undercompensated and underrepresented athletes.

It’s possible the NCAA won’t opt out of its agreement with CBS. Or the network may decide to sweeten the pot and extend the existing contract for an additional term, with or without an expanded tournament. Another option is to split the tournament between CBS and ESPN, or perhaps TBS. Whatever happens, don’t be fooled into believing there’s a democratic reason behind it. Just remember this: It’s all about the money.

Jordan Kobritz is a former attorney, CPA, and owner of the Maine Guides AAA Baseball Club. He is an Assistant Professor of Sport Management at Eastern New Mexico University, teaches the Business of Sports at the University of Wyoming, and is a contributing author to the Business of Sports Network. Jordan can be reached at jkobritz@mindspring.com.


Foresports said...

I'm totally against expansion to 96 teams, but would LOVE to see the tournament move from CBS. Its coverage is atrocious, it can't handle moving from game to game like ESPN does and is only interested in cramming as many commercials and promos for its dreadful shows into the broadcast. They didn't even show the net cutting by teams who won regional finals. It's pathetic. Count me in as one who wants the tournament to stay at 64 teams (I don't acknowledge the play-in game), but I'm fervently hoping a better network takes over.

Dick said...

I am also against expansion. It's sad that this is such a money grab. In fact I would like to see the field shrunk back to 48 teams as it was in the day. I blogged about this on my website http://dicklafrancesports.blogspot.com/2010/03/ncaa-mens-basketball-tournament-weakest.html

The subject is slightly different but as stated, it's for money.


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