Let me preface this blog post by saying that I personally loathe the idea of the NCAA Tournament expanding to 96 teams. I believe that it will ruin the pace of the event and render an already devalued 4 months of the regular season into a pure seeding exercise like the NBA or NHL. When NCAA Tournament expansion has been suggested before, I quickly put it down as a short-sighted CYA measure for coaches. Uber commenters Richard and Adam have provided some good points in support of NCAA Tournament expansion, but it still makes me want to vomit at an emotional level. I’d rather have Hue Hollins officiate my pickup basketball games or watch the final scene in LOST consist of Jack, Locke, Kate and Sawyer sitting in a diner with Journey playing in the background.
Big Ten commissioner Jim Delany, who has been an outspoken critic of NCAA Tournament expansion, stated yesterday that a super-sized tournament in the future was “probable.” The NCAA followed that up with confirmation today that it felt that a 96-team tournament would be the “best fit” for the event and then proceeded to outline a clusterfuck proposed schedule with the first round still starting on Thursday but the third round would be played on the following Tuesday and Wednesday. Exactly why the first round wouldn’t start on the Tuesday after Selection Sunday and then keep the same scheduling for the rest of the tournament as it is today is apparently beyond my pay grade. There is only one possible explanation as to how a group of presumably well-educated people could come up with this completely illogical scheduling format: the chronic.
The common perception and what I had long thought is that this is purely a money grab by the NCAA, which can’t wait to fold the ho-hum NIT (which my Illini failed to win this year) that it now owns into a new first round of the NCAA Tournament that will draw a lot more revenue. Certainly, I can appreciate the potential financial aspect of an expanded tournament. Most of the readers of this blog know that I’m a “follow the money” type of guy almost to a fault when looking at sports decisions. Still, I was perplexed by how the NCAA seemed to be jumping at the chance to risk killing the proverbial golden goose with such a drastic and almost uniformly unpopular change. There just seemed to be no good reason for it other than another network like ESPN coming in with an offer to the NCAA that was over-the-top to the point where the organization would whore itself. Then, as I was eating an Al’s Italian Beef sandwich (which you should always get dipped) at lunch today and perusing a copy of the Chicago Sun-Times that was left on the table, I came across the following quotes from a prominent college basketball voice that finally illuminated a legitimate and justifiable financial reason (other than just trying to make more for the sake of making more) why the NCAA would be doing this:
On the proposed expansion of the tournament: ”The expansion has absolutely nothing to do with the sport of basketball. It has to do with the economics of the NCAA and its broadcast partner CBS. Because this multiyear contract was backloaded at the end, CBS is looking at losing probably a billion dollars during the remaining years [2010-13] of the contract.
”Surprisingly, the way the contract was written, the ‘out’ for that last three years belongs to the NCAA, not CBS. I can assure you if it was CBS’ ‘out,’ they’d be long gone. The reason it was the NCAA’s ‘out’ was because everyone assumed the rights fees would continue to increase. So the NCAA said, ‘OK, we’ll make it a long-term deal but in 2010’ — which seemed like 100 years from when the deal was signed — ‘we want the right to opt out and see what the financial landscape is like.’
”Now they’re finding out that what CBS is paying this year and will continue to pay through 2013 is far more than any other suitor would pay. The only way the network can possibly offset those losses is to have more inventory to sell. So the expansion of the tournament would allow the rights-holder to cut down on the losses.”
On ESPN taking over the tournament: ”They’re the one guy who wouldn’t have to be covered by all of [the conventional network revenues] because of the monthly [cable-share] charge they get from viewers. Obviously, it would be an enormously prestigious property for ESPN to hold. But they have no reason to take CBS off the hook financially.”
On the NCAA and future rights fees: ”The basketball championship generates over 90 percent of the total gross revenue of the NCAA, which has 86 other championships to fund. If they were to take $300 million less for the men’s tournament, how would they afford to pay for those other championships and maintain the reimbursements back to the schools that participate? That’s why tournament expansion is being discussed. This has nothing to do with the betterment of the event.”
Those quotes came from an interview with former CBS college basketball analyst Billy Packer. Now, I personally think that Packer is a first-ballot member of the Douchebag Sportscaster Hall of Fame, but also believe that he’s a straight-shooter and on point here. It suddenly all made sense to me. The NCAA isn’t really expanding the tournament in order to make more money. Instead, the NCAA is expanding the tournament because it’s the only way that it can continue to make the same amount of money that it’s making now. This is all about avoiding a reduction in TV rights fees in the next round of contracts if the NCAA maintains the current 65-team format. Other news stories have noted that the current NCAA/CBS deal is backloaded where there are escalating payments starting this year through 2014. It was also believed from the very beginning of the current contract in 1999 that CBS had wildly overpaid for the rights to the NCAA Tournament. No one can be surprised that CBS is losing a lot of money on the NCAA Tournament, as well. Almost all sporting events on over-the-air networks, even the highest-rated ones such as NFL games, are “loss leaders” where the networks lose money on the games themselves but use them as vehicles to promote other more profitable shows. That’s a huge reason why sports programming continues to move en masse to cable networks like ESPN since they are able to take advantage of the dual revenue stream of cable subscriber fees on top of traditional advertising (as Packer noted in his interview).
So, I’m buying what Packer is arguing: the NCAA knows that CBS is paying way over market price for the tournament and losing a lot of money, meaning that expansion is necessary in order to simply maintain the level of revenue that the NCAA receives now. Such revenue is critical since it funds virtually everything else that the NCAA does. If the NCAA could come out and say that to the public, then I think that sports fans might at least have a better understanding of the situation and not believe that it’s completely about greed. Of course, the NCAA can’t do that because it would compound the very problem that it’s trying to avoid – the last thing that it would want to do is admit that CBS is overpaying for the tournament since that would guarantee that no one else would ever pay anything close to that level in the next contract cycle.
I still don’t like it, but if the NCAA Tournament expands, at least I’ll understand why it had to happen.
(Follow Frank the Tank’s Slant on Twitter @frankthetank111)
(Image from al.com)