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NCAA college basketball fans everywhere are eagerly anticipating this year’s March Madness tournament. While the tournament will certainly provide its share of sports fun and excitement, it also means big business for a number of top U.S. companies.
Back in 2010, the NCAA, CBS Corporation (NYSE: CBS), and Time Warner Inc’s (NYSE: TWX) Turner Sports inked a massive 14-year $10.8 billion deal for joint broadcasting rights to March Madness. This year, live games will be aired on CBS, TNT, TBS and TruTV.
Why would the networks shell out such a staggering amount of money to get rights to the tournament? In 2015, the tournament averaged 11.3 million total viewers, its highest ratings in 22 years.
With all those eyes on the big games, it’s no wonder that March Madness now generates more than $1.1 billion in advertising revenue per year.
With all that advertising money flying around, plenty of brands are betting big by being official sponsors of March Madness. However, other brands piggy-back on the tournament’s visibility as well. Even though it wasn’t an official sponsor of the tournament, a study found that McDonald’s Corporation (NYSE: MCD) gained the most exposure of any brand during last year’s tournament due to its presence on popular tournament-related online, mobile and social media sites.
McDonald’s also sponsors the All American high school basketball honors, which is an excellent way to get its brand on-air during rundowns of the top college players. According to the same study, Nike Inc (NYSE: NKE) and PepsiCo, Inc. (NYSE: PEP)’s Gatorade also gained significant brand exposure last year even without being an official sponsor of the tournament.
While many people don’t consider a $5 or $20 work bracket pool to be “sports gambling” in the typical sense, an estimated $9 billion was wagered in one form or another on last year’s tournament.
As much as $7 billion of those bets were made illegally, but Las Vegas casinos still pocketed around $100 million in profits from legal tournament bets last year. Vegas casino operators Las Vegas Sands Corp. (NYSE: LVS), Wynn Resorts, Limited (NASDAQ: WYNN), MGM Resorts International (NYSE: MGM) and Caesars Entertainment Corp (NASDAQ: CZR) are hoping that this year will be another big year for legal tournament betting.
The companies mentioned above are just a handful of the hundreds of names that are involved in the big business of March Madness. The college athletes are competing for the glory of a championship, but the tournament scoreboard for these companies will be counting in dollars and cents.
Disclosure: the author is long WYNN.
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