DALLAS In sports and business, there are very few sure things. Here is one:
Sometime soon probably within four years the NCAA will surpass a billion dollars in annual revenue, mainly because of lucrative television rights for its mens basketball tournament.
For March Madness and the Final Four, each a trademarked phrase, ever-growing fan excitement has meant an explosion of money.
As recently as 1973, TV rights for the NCAA tournament generated only about $1 million. Last year, tournament multimedia rights accounted for more than $680 million of the NCAAs nearly $913 million in total revenue.
In 1986, the last time the Final Four came to North Texas, the entire tournament totaled $41 million from television rights, ticket sales and other revenue. This year, its more than $700 million from TV alone.
The NCAA doesnt break out ticket revenue from just the Final Four, but The Dallas Morning News estimates that the games will generate roughly $20 million. Some 80,000 fans or so are expected today and again Monday at AT&T Stadium.
With long-term agreements that dictate ever larger rights payments over the next decade, the tournament should continue to be a major financial success.
Yet, the NCAA remains cautious, precisely because so much of its revenue comes from a single source. In one of the organizations financial filings, it states that a long-term goal is building its investment holdings so that they can support a year of operations and maintain a substantial portion of the NCAAs distributions to its largest members.
Dallas Mavericks owner Mark Cuban recently warned that the NFL, the most valuable pro sports league in the United States, was 10 years from imploding, in part because of potential oversaturation that can lead to declining fan and advertiser interest.
Could the NCAA tournament ever reach that point?
No on NCAA, Cuban wrote in an email. A few weeks of winner take all is fine.
Craig Depken, a sports business expert at the University of North Carolina at Charlotte, said there is always the chance that the TV contracts might outpace interest. However, at the moment I think the contracts are fairly well valued, he said.
The financial windfall for the NCAA, a governing body for collegiate athletics that traces its beginning to 1906, has magnified a decades-long debate over the role of athletics in higher education. The association finds itself increasingly challenged on several fronts, including an antitrust lawsuit filed in March and a National Labor Relations Board decision last week that said football players at Northwestern University have the right to unionize.
Legal expenses appear to be mounting. In the fiscal year that ended Aug. 31, 2012, the most recent numbers available, the association paid $9.45 million in legal fees. Thats more than the previous two years combined.
Through the mens tournament, the NCAA accounts for much of the big money in big-time college sports, but not nearly all. Major conferences make their own TV deals.