- The Washington Times - Friday, March 31, 2000

Look out, Super Bowl. The Final Four is taking full aim at the lead as America’s dominant sports event.

The TV ratings and economic impact of the Final Four, the white-hot culmination of the NCAA tournament, have not yet matched Super Sunday. But in an age where attendance and TV ratings are at best flat for nearly every major sports event, March Madness is growing fast in both the NCAA’s wallet and the country’s sporting consciousness.

Ticket revenues for the NCAA tournament have risen 54 percent to $27.3 million just since 1996. College merchandise sales during the tournament have remained strong despite a marked downturn in the rest of the sports apparel industry. And the NCAA also struck gold last November by signing an 11-year, $6 billion contract to keep the tournament on CBS through 2014 a pact worth more than twice the old one on an annual basis.

But those rising financial numbers represent more than economic gravy to the NCAA. Rather they very simply mean survival. The Division I men’s basketball tournament, which generates about $282 million for the NCAA over just three weeks, will fund at least 85 percent of its annual operating budget. About two-thirds of that money, in turn, is distributed back to member colleges to help support their athletic programs.

In short, March Madness is the largest revenue source for all of college sports, Divisions I, II and III.

“Directly, the tournament is about 85 percent of our total budget more than that when all the indirect revenue is added in,” said Wally Renfro, spokesman for the NCAA, whose 1999-2000 budget was somewhat conservatively set at $303.3 million. “It’s very, very important.”

With the Final Four so critical to the NCAA’s economic well-being and being held this year on its new home turf of Indianapolis, the organization this year is going to unprecedented lengths to promote and protect the event. As usual, the NCAA is running a “clean zone” at the Final Four in which all corporate signs inside the RCA Dome are blacked out.

But in a further attempt to protect its own trademarks and support its own official corporate sponsors, the NCAA is also aggressively policing any unauthorized use of “Final Four” and “March Madness.” Both are NCAA-owned trademarks, and so far this year more than 350 businesses have received cease-and-desist letters to stop the piracy. The recipients of those letters have ranged from large T-shirt manufacturers to small independent restaurants marketing “Final Four Fajitas.”

“Some people, I’m sure, think we’re being unfair and taking the fun out of the event,” said Scott Bearby, assistant general counsel for the NCAA. “But we developed a great deal of equity over the years in those trademarks, and if we don’t draw the line very low, we run a great risk of losing control and having those marks enter the public domain.

“The more popular this event becomes, the more valuable those marks become. It’s a very real and very direct correlation,” Bearby said.

The tournament’s economic power and uniqueness emanate from two critical points, experts say: upsets and short life span. If the Yankees, Cowboys or Lakers get wiped out early in their playoffs, league and TV executives wring their hands. In college basketball, fans and TV executives alike fully expect and relish upsets.

Similarly, there’s nothing dragged out about the tournament. No seven-game series. No playoff rounds that take a month. Just the pure immediacy of win or go home. In just 18 days, it’s all over.

“There is such a track record of drama at each round, and fans buy into that literally,” said Dean Bonham, a Denver sports marketing executive. “And each year, it seems, a Cinderella story comes out that captures everyone’s attention. That’s a big reason why the tournament is such a draw for fans and sponsors alike.”

The NCAA draws most of its Final Four revenue, of course, from its $247 million-per-year TV contract with CBS. But ratings for the tournament, despite this year’s minor bump, have been in a slow decline for years, averaging a 6.8 rating and 15 share last year, compared with a 9.2 rating and a 24 share in 1986. Last year’s title game between Duke and Connecticut posted a 17.2, the lowest rating for the game since 1972, despite the scintillating on-court action.

Ratings so far this year also are down 5 percent. After a very solid opening week, last week’s regional round was beaten handily by both “Who Wants to Be a Millionaire?” and golf’s Players Championship, in which star attraction Tiger Woods finished second.

The ratings numbers, however, are deceptive for several reasons. As the American population grows, a ratings point is worth more than 1 million people compared with 874,000 in 1986. The share, referring to the percentage of TVs in use at a certain time, continues to be under siege by cable and satellite TV, DVDs and the Internet to the point where treading water in the TV industry is now considered great.

Much more telling, the network devoted 65 hours and 28 minutes to the tournament last year, compared with less than 41 hours in 1986. The increased emphasis on the early rounds drew down the average.

“There’s no more important event on CBS than the men’s basketball tournament,” said Sean McManus, president of CBS Sports, eye-opening words considering that the network also airs NFL games and “60 Minutes.” “If anyone thinks we’re panicking about the ratings, they’d be wrong. The fact we lost so many big teams so early and still hung in there, I think, is very important.”

About two-thirds of NCAA tournament revenues are distributed back to member schools, primarily through a basketball fund that rewards teams and conferences for performing well in the tournament over a six-year rolling period.

For example, Kentucky received $1.92 million from the NCAA from tournament revenues in 1998. The Wildcats received more than any other program that year because during tournaments from 1993 to 1998, they reached the Final Four four times and won two titles. North Carolina, with four Final Fours and one title during that span, received $1.77 million.

At the other end of the scale were 77 schools that reached the tournament only once and lost in the first round. Each received $73,924.73.

“These are key funds that help support programs at each level of competition,” Renfro said.

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