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Gannon University Professor, Dr. Eric Brownlee, Discusses the Economic Impact of Hosting March Madness

Published: 03/07/2023

Dahlkemper School of Business March Madness Bracket Challenge Trophies

Dahlkemper School of Business March Madness Bracket Challenge Trophies

Ask the Experts: March Madness Musings

Who are your Final Four picks?

My final four picks are Alabama, Purdue, Kansas, and Baylor and I have been impressed with Alabama all season so far.

In your opinion, is hosting March Madness 2023 an opportunity or a challenge? 

Hosting March Madness is definitely an opportunity for smaller cities like Dayton that host the first few rounds and larger cities like Houston that host the Final Four. Regardless of economic impact, March Madness is a great opportunity for cities to welcome sports fans and showcase what they have to offer. Sports tourism is an excellent way for host cities to increase awareness and highlight recent accomplishments. A well-organized mega sports event brings attention to a city, state, and region and can be a great tool for local government to recruit potential new residents, visitors, and businesses.

How do you characterize the NCAA tournament’s economic impact on its host cities? 

The research on the economic impact of mega sports events like March Madness is mixed and while some of these events can be highly profitable for the host area, there are significant costs associated with these types of events and it is best to minimize public investment in hosting if possible. For instance, the increase in outside visitors for an event such as March Madness might be somewhat offset by the lost revenue from local residents. I noticed this while working at the Super Bowl in Phoenix this year and several streets and businesses were closed near the convention center in Phoenix and State Farm Stadium in Glendale during Super Bowl Week. Some businesses make the conscious decision to close during mega sports events as there is not always a perfect fit and the business may actually receive less business during this time. For example, a gym like LA Fitness near a sports stadium/arena might close during the time of a mega sports event as its members might not be able to access the facility due to closed streets and lack of parking. Additionally, the ROI of hosting a major sports event is also impacted by all the costs for the city such as additional security, event requirements such as hotel rooms for event staff and players, and a secure perimeter that limits access to businesses for local residents. With that being said, there is typically an increase in spending by visiting sports fans and if this new direct and indirect spending is higher than the cost of hosting the event it can be relatively profitable. Many variables influence the potential ROI for hosting a mega sports event and some cities are better suited for hosting events as they already have the infrastructure in place and they have previous event hosting experience so they can minimize costs and maximize revenue.

Where do you stand on the issue of paying college athletes? 

In regards to paying student-athletes above and beyond a scholarship, I like the NIL model and letting students earn money by marketing themselves and their own personal brand. However, I worry about inequity related to NIL based on the reputation, location, and size of a school. I do not believe that direct payments to athletes from boosters or other sources are a good business practice and could eventually ruin college athletics as we know it today.

What are the biggest issues facing the NCAA today?

The biggest issue facing the NCAA today is conference realignment and I am very concerned that we will soon be left with only a few huge, “Power” conferences. Most of these moves are very football centric and they are already changing the landscape of college athletics. For example, USC going to the Big Ten will not only have a major effect on football but will influence all of the other non-revenue sports, and rivalries and matchups will be forever changed. I also worry about some schools being left behind and more conferences dying as this conference realignment continues. The second biggest issue for the NCAA is how to appropriately pay student-athletes without changing the entire college sports model. The NCAA resisted this change for a little bit too long and now they are reactively trying to deal with this issue and I expect additional rule changes and new revenue/payment models soon.

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