With $1 billion on the line, March Madness is ready for its comeback

CBS Sports president Sean McManus called it heartbreaking. WarnerMedia boss Jeff Zucker said he was sad. And other executives felt similar when discussing the return of the college’s basketball’s money-making tournament.

About one year ago, the National Collegiate Athletic Association’s (NCAA) March Madness men’s tournament was canceled due to Covid-19, costing the NCAA media rights revenue and more losses on top of that when considering ticket sales. The NCAA says it had insurance for the 2019 tournament that paid out $270 million to absorb the blow. It has the same insurance in place for 2021.

It’s unlikely the NCAA will postpone the 2021 tournament, which starts Thursday, despite early Covid-19 outbreaks that have eliminated top programs, including Duke, from competing in conference play for a chance to get in. Teams are now set to spend up to four weeks in an Indianapolis bubble, the site of the 2021 tournament.

And again, networks embrace its return which McManus said will “look and feel different” but is vital to finances.

Here’s a look at what to expect from the tournament, by the numbers:

CBS and Turner Sports will once again collaborate for coverage of the event. McManus said the network would use 10 production crews, two more than the network used in 2019.

“It’s an event that is foundational to CBS Sports,” McManus said last week. “This year it’s going to be more challenging than ever to produce.”

But that challenge will need to be met, as $1 billion is on the line.

MediaRadar, an advertising data firm, estimates the 2019 NCAA March Madness tournament generated $1.18 billion in television ad spend for CBS and Turner Sports. Keep in mind the networks pay a little more than $800 million for the current rights package.

MediaRadar aggregates data from advertisers across a multitude of media channels, including TV and online. The firm said that amount was a 15% increase compared to the 2018 event.

“It is the most profitable playoffs in U.S. sports media rights deals,” said Dan Cohen, senior vice president of Octagon’s Global Media Rights Consulting division.

John Bogusz, CBS Network executive vice president of sports sales and marketing, said this year’s ad slots are nearly sold out with “a couple of units left in Final Four [game one] and a couple of units left in Final Four two and [the championship game].”

Bogusz said marketers are spending on sports programming, anticipating a reopening with vaccines becoming widely available by May. He said insurance and automotive are two sectors fueling ads for the 2021 tournament.

Car sales took a plunge when the pandemic struck, but early projections suggest sales could increase 10% this year. The restaurant industry is another area expected to grow after a sharp decline.

“It feels like most of the categories that were challenged during the pandemic, including movies and streaming services, will be back,” added Jon Diament, Turner Sports chief revenue officer.

Diament said March Madness would see ads for Paramount+ and HBO Max to balance out the loss of movie studios that could sit out.

Usually, the NCAA Tournament does well on the viewership side, and networks missed out on that, too.

The NCAA said the March Madness Live streaming component had more than 100 million live streams in 2019, a 31% increase from the previous year. But despite cord-cutting, television still matters, and CBS will find out if the Covid-19 sports viewership decline will impact the Final Four.

In 2019, CBS drew about 19 million viewers for the championship game between Virginia and Texas Tech. That was a decline from the 2017 game it hosted featuring the University of North Carolina and Gonzaga, which attracted approximately 22 million. McManus said he isn’t concerned with ratings for this year’s tournament.

“I think if we get a good tournament, the ratings will be perfectly fine, and the advertisers will be satisfied with the amount of men and women who see their commercials,” he said.

Added Bogusz: “The ratings have been slightly down for college basketball this year, but this event is unlike any other. We’ll wait and see how the games perform, but we have set aside a little bit of inventory to take care of our advertisers if need be.”

The American Gaming Association estimates that more than 47 million people will place wagers on this year’s tournament, with 17.8 million individuals betting online, up 5.8 million in 2019.

And the odds are Gonzaga, as the school attempts to make history.

Gonzaga enters the tournament with a 26-0 record. It’s only the fifth time a team entered the NCAA Men’s Tournament undefeated since Indiana last did so in 1976 and won the tournament. Only seven schools went unbeaten and won the title.

Online sports betting company PointsBet took $2,850 on Gonzaga to win it all at +350 odds. If the Bulldogs win, that wager would have a total payout of $12,825.

BetMGM said Gonzaga has 26.7% of its handle – total amount wagered by bettors – around the NCAA tourney, followed by Illinois (11.8%). One of its biggest bets: A $2,755 wager on Illinois at +2,000. The payout is $55,100.

Fan Duel said two of its biggest bets is a $30,000 wager ($126,000 payout) for Baylor to win the tournament and a $20,000 bet ($500,000 payout) placed on West Virginia.