March Madness Continues to Generate Record Television Ad Spend, Growth Rate Slowing

March Madness

The NCAA men’s basketball tournament remains “the second largest post-season sports franchise, trailing only the NFL playoffs”, in terms of television advertising expenditure; but, the ad spend growth rate for the Big Dance trails that of the NBA, MLB and NFL post seasons, over the last 5 years. Though 97 advertisers (a record) spent $1.28 billion (also a record) on television advertisements during March Madness ‘17, that total has grown just 3.3% annually since topping $1 billion for the first time in 2012. For comparison purposes, the NFL is growing +9.7% annually with advertisers having spent $1.55 billion during the most recent postseason. The NBA (3rd largest post season franchise) has experienced 11.7% YOY growth over the same period, with brands increasing their total postseason ad expenditure to $934 million in 2017.

Howie Long-Short: The prohibitive cost of advertising during the NCAA tournament, relative to global audience size (or lack thereof), is likely the biggest reason March Madness’ ad spend growth rate trails the NFL, NBA and MLB postseasons. NCAA bylaws preventing companies from using the names (or likeness) of the college athletes in their advertisements, also places them at a competitive disadvantage relative to the pro sports leagues. It should be noted that the NCAA’s ad spend growth rate is “in line with rights fees increases.” For informational purposes, General Motors (GM, $83 million), AT&T (T, $66 million) and Coca-Cola (KO, $56 million) spent the most among advertisers during the 2017 NCAA men’s basketball tournament.

Fan Marino: Loyola University-Chicago won its first NCAA tournament game since 1985, upsetting the University of Miami on a 3 pointer at the buzzer; a highlight that will live in March lore forever. Among those in attendance were 98-year-old team chaplain Sister Jean Dolores-Schmidt. Dolores-Schmidt is no front-runner. Prior to November (she broke her hip keeping her out of action), she had only missed 2 games since ’94. She has a plaque in the school’s hall of fame, had her own bobble head night at the arena and still issues scouting reports on upcoming opponents. Her 11th seeded Ramblers are scheduled to play 3rd seeded Tennessee on Saturday. No doubt, she’ll have some thoughts on how to stop Grant Williams; UT’s unanimous all-SEC first team selection.

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Author: John Wall Street

At the intersection of sports & finance.

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