NCAA's March Madness Registers Ad Spikes

BasketballAs Americans are filling out their NCAA tournament brackets, a new report says advertisers are filling out March Madness with healthy price bumps over a year ago. Wall Street analyst David Joyce says CBS and Turner are landing increases in the mid-single-digit percentage range, while spots in the title game are going for $1.5 million.

For the second year in a row, CBS will carry the Final Four and championship game, while sharing earlier-round games with TNT, TBS and truTV. CBS has the four regional finals, where ads are going for $600,000-$700,000, Miller Tabak + Co.’s Joyce writes, citing industry sources. 

Overall, the tournament is about 95% sold out. The opening round games shared by the four networks are attracting prices of $90,000. 



Including online viewing, where there is a dual-revenue stream with a $3.99 subscription, Joyce estimates CBS and Turner will generate $760 million in revenue for the tournament. The online portion includes top-line sponsors AT&T, Buick, Capital One, Coke, Infiniti and LG. 

Under a 14-year deal, CBS and Turner are paying an average of about $771 million a year in rights fees.

CBS and Turner (part of Time Warner) share evenly in advertising and sponsorship revenue, as well as production expenses. 

Under the deal, if rights fees and expenses are greater than advertising and sponsorship dollars in a year, Turner ensures CBS’ annual losses are limited to between $30 million and $90 million. CBS benefited from the “loss cap” provision last year, according to Time Warner’s annual report. 

On one level, the $1.5 million for a title-game spot could be considered exceedingly steep. Last year’s game drew about 20.1 million viewers. Last month’s Oscars drew almost double the number of viewers, yet ad prices were only about 13% more.

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