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March madness & the hype machine

Josh Hendrickson of The Everyday Economist refers to an article in USAToday, which cites several estimates of the "economic cost" of March Madness. Josh is of the view that this aspect of the NCAA entertainment juggernaut is overblown. An email exchange between myself and Josh ensued, in which I mused whether these estimates might be due to self-promotion on the part of one or another consulting firm. Yep, said Josh, referring to them as "tongue-in-cheek studies."

Additional criticism worth reading comes from Jared Sandberg's article in Tuesday's WSJ, complete with the same "tongue-in-cheek" description of the "studies":

One of the biggest culprits in the scare is outplacement firm Challenger, Gray & Christmas, which gives estimates of the value of lost productivity due to the tournament. Its latest figure, $1.2 billion, is less than a third of last year's estimate of $3.8 billion, which was four times the $889 million estimated two years ago. The latest swing is due to the firm considering for the first time the number of Americans who have Internet access at work.

Even Challenger, whose figures have been criticized, admits its productivity-loss estimates are unscientific and "tongue-in-cheek," a spokesman says. Calling the productivity hit "disastrous" last year, Challenger concedes this year that 94% of HR executives "do not consider ... the tournament a problem."

I have a calculation for Challenger to consider: the economic cost of "time wasted" by locals following their sports teams. That would be reason #1 NOT to subsidize the local stadium...

Note to reporters: you can't have it both ways!!