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The big business of the NCAA Final Four

Image:  NCAA men's South Regional finals
Memphis Tigers forward Shawn Taggart, left, is headed for the Final Four. Texas Longhorns guard Justin Mason won't get the extra exposure. Jessica Rinaldi / Reuters file

When John Wooden’s UCLA dynasty captured its 10th and final title under the coach’s guidance in 1975, players’ socks were hiked almost to their knees, while their shorts were worthy of the word.

Different too back then was the interest in the NCAA men’s basketball championship game.

A capacity crowd of 15,153 watched UCLA’s 92-85 defeat of Kentucky in the San Diego Sports Arena. Take a look at this year’s Final Four. Nearly 45,000 fans will pack the Alamodome in San Antonio for each of the three games (next year, Ford Field in Detroit will host up to 70,000 per contest). Tickets for Monday night’s championship are offered for as much as $3,500 apiece on secondary-ticket sites, though no one is sure at the moment which two teams will play. The title game – a big television draw even during the Wooden era – will lure about 40 million people in the U.S. to watch at least part of the game, the largest TV sports audience in the country these days aside from the Super Bowl.

Fans are only part of the boom. Advertisers are willing to pay premium prices to hawk products during the Final Four. In 2007, GM, Coca-Cola and others shelled out $1.3 million for a 30-second spot for the Florida-Ohio State championship game and nearly $700,000 for a half-minute commercial during the semifinals, according to TNS Media Intelligence. CBS, which has broadcast the tournament since 1982 and who holds broadcast rights through 2014, never wants for advertisers, even at prices far higher than those for World Series games or BCS bowls.

”You have the same network broadcasting every year, which lends itself to selling multi-year packages,” said Jon Swallen, senior vice president of research at TNS Media Intelligence, whose firm noted that more than 80 percent of CBS’ revenue comes from returning advertisers. “Approved NCAA sponsors are required to purchase airtime for the tournament. There’s a big group of advertisers that have to be there.”

That’s good news for CBS, considering the rights fees it’s paying. To broadcast the 64-team March Madness tournament, the Tiffany Network handed over about $529 million to the NCAA this year (compare that number to 1973, when college sports’ ruling body received just over $1 million for the tournament’s TV rights, the biggest amount ever at that point). CBS’ expenditure is less than the ad revenue it hauls in, estimated to be $545 million this year by TNS, compared to $240 million only a decade ago. GM alone has spent about $70 million per tournament, trying to sell Chevrolets and Pontiacs, for the past five years. CBS also enjoys almost every right imaginable, such as publishing and merchandising, around the three-week event to bring in more money.

For the four No. 1 seeds who will compete in the Final Four – Kansa, North Carolina, UCLA and Memphis – the event is a showcase for potential recruits and free advertising for their schools. Though three of the four schools are perennial basketball powers and well-known to the public, the inclusion of Memphis – poised to enjoy its first Final Four since 1985 – may give the Southern school a bump in applications next year.

Still, it’s doubtful any school has benefited from a Final Four appearance in this lucrative era as much as George Mason. According to a study put out by the school’s Center for Sports Management in March, the 2006 appearance prompted a doubling of season ticket sales for home games, a 350 percent jump in admission inquiries and an almost-unbelievable $677 million in free media, from the game broadcasts to the national media coverage. (Though Davidson was knocked out in the Elite Eight, the 1,700-student school’s storybook tournament will pay dividends as well.)

Only one group isn’t cashing in on the financial windfall: the players. Their performance on the court may generate an extra look from NBA scouts (who already know their game inside and out), but a slightly higher draft position is the only potential monetary benefit. They can’t endorse products in college or earn money from sales of their jerseys. 

Though the business of the Final Four has changed since Wooden left the bench, UCLA has remained a constant, this year appearing in its third Final Four in a row. Now 97, Wooden will watch Saturday’s UCLA-Memphis game on television while recuperating from a fall. Interviewed on NBC Sports after his final game in 1975, he said, “I want to thank all those who have watched the game on television.” CBS, advertisers, Final Four universities and the NCAA are the ones doing the thanking these days.