The viewership for this game was, comparatively speaking, terrible. Why didn’t that matter to advertisers? (USA Today)

This week USA Today followed in Kyle Whelliston’s venerable footsteps and termed college sports a “bubble” that’s sure to pop sooner or later. Something strange happened in between the piece’s inception and publication, however, because the final product turns out to consist of a labored and rather convoluted lede placed atop the latest iteration of what has long been an excellent and even invaluable set of data.

For starters the nominal news hook presented by the numbers — most athletic departments operate at what they are pleased to term deficits — would seem to be something of an awkward fit for our traditional stock of “bubble” iconography. Maybe it’s me, but I always assumed that tulip merchants in 1637, the South Sea Company in 1720, Webvan.com in 1999, and subprime lenders in 2006 instead showed astronomic operating surpluses. In fact I rather thought this was precisely the red flag in those cases.

Nor is it clear why a bubble would aptly describe a revenue model now entering its sixth decade of “Seriously! Any day now!” impending legal doom. Finally, fretting about those darned young people and their cord-cutting in a piece based in no small measure on a brand new TV deal whose lead signatory is a legacy broadcaster founded in 1927 qualifies as still another curious ratiocinative choice, surely.

Far from being an “unstable situation,” college sports in general, college basketball more especially, and the NCAA tournament in particular instead present a series of successively smaller and progressively more advantageously situated concentric circles characterized by an unusual degree of hardiness solely as media properties. There are variables in play, naturally, and it’s not too much to term the threat of legal exposure “existential” — with regard to the NCAA. I don’t know who or what will be governing the sport in 2032, and I do trust that by then the players will have long since been receiving their fair share of the resulting revenues.

But if we view the essentials of the tournament as nothing more or less than 68 college teams playing 67 games of win-or-go-home basketball over three weeks from mid-March to early April, I’m yet to see anything even remotely persuasive in the way of a Book of Revelation. The essentials are eyeballs and basketballs, and if a tournament that earned record-setting revenues for a decade before, during and after the largest economic calamity since the Great Depression constitutes a bubble, well, put me down as bullish on this particular bubble. 

The crazy network paying these outlandishly bubbly rights fees saw a 54 percent ROI
You can speculate that rights fees form a kind of bubble in their own right, and perhaps they do. But at this historical moment, there’s nothing irrational or even particularly exuberant about what CBS and its Turner partners are paying the NCAA.

In 2015, advertisers spent an estimated $1.19 billion for spots during the tournament. Under the contract that was then in place, the NCAA was receiving an average of $774 million per year for the media rights to the tournament, meaning last year the broadcast partners achieved a fairly incredible (estimated) 54 percent return on their investment. To put it very mildly, the math works for CBS.

Fair enough, maybe CBS and its partners are doing fine and the real bubble’s to be found elsewhere in this food chain. Perhaps it’s really the guileless and benighted sponsors that are being swindled here. Maybe, but if so it’s tough to see how at the moment. Amounts spent per advertiser are going to vary widely, of course, but on average you’re likely looking at an outlay of roughly $12 million per company (again, in 2015 terms).

Certainly $12 million sounds like a lot of money, but judged in terms of the annual revenues for corporate super-giants like AT&T ($147 billion), giants like Enterprise ($19.4 billion), or even a relative mom-and-pop outfit (ha) like Buffalo Wild Wings ($1.8 billion), an outlay of a mere $12 million of even several multiples of that is a no-brainer. Indeed, there’s even a burgeoning vein of inquiry suggesting that Twitter might be wrong (it’s true!), and that the repetition of the same ads that we all complain about ad nauseam each March is actually more effective than we might think. The math works for advertisers.

Why there’s no precedent for a doomsday legal precedent
The problem with forecasting that legal rulings favorable to college athletes will destroy Division I’s revenue model is that, when colleges are at long last compelled to share the lucre with the players on the field and on the court, our institutions of higher learning will at one stroke be reduced to the same Dickensian and pitiable hand-to-mouth existence currently being eked out by all those scruffy and threadbare NFL and NBA owners. Some asteroid.

From Curt Flood and Catfish Hunter to Frank Minnifield and Spencer Haywood, every “adverse” legal ruling suffered by the NFL, MLB or NBA that’s been fought tooth and nail by the leagues and hailed as ushering in a new millennium of fairness for professional sports players has also presaged another escalation in revenues for professional sports owners. Wish fervently, if you’re so inclined, for the balance sheets carried by college athletic departments to be struck by a devastating legal thunderbolt. Personally, I’m not waiting up nights.

True, such an outcome in the courtroom could well mean a realignment of which non-revenue sports for which genders are maintained by which institutions. But, when speaking of college football and men’s college basketball, the fundamentals of the situation will be almost exactly the same even when players are treated with something more closely approximating fairness. Take basketball, and more specifically, consider the NCAA tournament as its own discrete category….

If 2016 didn’t kill the tournament as an audience-aggregation commodity, nothing can
The intrinsic strength of the tournament as a media property was illustrated beautifully this year, as the Madness both started and ended with outcomes that could be termed objectively disastrous if you’re the NCAA or CBS. On Selection Sunday, the bracket leaked just 50 minutes into a newly expanded two-hour show for which CBS had, of course, booked a full complement of paid advertisers. Any spot that aired after about 6:30 Eastern that night was of highly doubtful utility, to say the least.

That seemed like a big deal for a little more than 90 hours. Then Michigan State lost to Middle Tennessee, Paul Jesperson did what Gordon Hayward could not, and one of the greatest comebacks in the history of organized basketball occurred.

Which brought us to the Final Four, and, alas, two exceptionally dull national semifinal games. We know now Saturday night’s tedium was just the preamble for an absolute jewel of a game the following Monday night, but it was a jewel of a game watched by very few people. Why?

The conventional wisdom now sides with the substandard semifinals and resulting lack of “momentum” (plus a conspicuous absence of quote-unquote Great Teams), as opposed to the fact that the game was on cable. In any event, the ratings were surprisingly meager, and the tournament thus ended as it began, with bad news for the NCAA and CBS on the (admittedly narrow and parochial) media front. Cue the advertiser outrage, right?

Well, no, not exactly. It turns out a misbegotten selection show or even really bad ratings for the last of 67 games carried over 20 days aren’t deal-breakers. The tournament’s very structure draws a spectating crowd, and — unless somebody screws something up by expanding the field or inadvertently diluting the college talent pool — it can probably continue to do so long after NCAA-brand mandated amateurism and/or present-day content-delivery pipelines have been consigned to the ash heap of history.

It clearly satisfies our basic sense of fairness to theorize that all those smug college sports machers are about to finally get their comeuppance, whether it’s from the inexorable march of Sisyphean litigation, cord-cutting, player walkouts, etc., etc. The deus ex machina is always just around the corner. To each their own, of course, but for my part I don’t need to see a comeuppance. A mere cessation in hoarding (effectively) all of the revenue from a spectacularly remunerative and preternaturally asteroid-resistant enterprise will do nicely, thanks.