Economics of College Sports

By John Fizel; Rodney Fort | Go to book overview

7

An Economic Slam Dunk or March Madness? Assessing the Economic Impact of the NCAA Basketball Tournament

Robert A. Baade and Victor A. Matheson


INTRODUCITON: BRIEF HISTORY OF NCAA BASKETBALL TOURNAMENT

The Super Bowl, Olympic Games, all-star games, and league play-offs for the four major professional sports leagues, and the National Collegiate Athletic Association (NCAA) basketball tournament, qualify as sports megaevents in the United States. Convinced that these sports events produce substantial incremental economic activity, cities compete as vigorously to host them as do the athletes who participate in the events. Seduced by the promise of an economic windfall, cities have spent significant amounts of money to host the NCAA basketball tournament. Are the benefits derived from hosting tournament regional games or the NCAA Final Four (FF) as substantial as boosters claim? The primary purpose of this paper is to assess the economic impact of the NCAA FF. In so doing, at least three other questions will be addressed. First, does the size of the host city correlate in some way with the economic impact induced by the event? Second, how does the economic impact of the FF for women (FFW) compare to that of the FF for men (FFM)? Third, does the size of the facility in which the FF games are played influence the economic impact? Before addressing these questions directly, it is useful to consider how the NCAA has evolved in a financial sense, and how the NCAA has been able to parlay the popularity of its basketball tournament into considerable wealth. The evolution of its television contracts provides some particularly meaningful insight.

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