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19.6 Billion EdTech Lessons From the NCAA March Madness TV Contract

Why higher ed technology people should care about the economics of big-time college sports.

March 20, 2017
 
 

I love March. Why? College basketball. March Madness.  

Can those of us in higher ed technology learn anything from March Madness?

Are there any lessons we can take from all these hours of passive viewing that we can actively apply to our day jobs?

Definitely. In fact, there are approximately 19.6 billion lessons.  

$19.6 billion is the size of the NCAA contract with CBS and TNT for TV rights to the Division 1 Men’s Basketball Championship from 2010 to 2032. In 2016 the NCAA signed an $8.8 billion dollar contract extension with CBS and Turner that goes from 2025 to 2032. This contract extension was on top of the existing $10.8 billion that the networks agreed to pay the NCAA for the TV rights to the tournament from 2010 to 2024.

This means that starting in 2025 the NCAA will get $1.1 billion dollars per year for tournament TV and streaming rights.  

Where does this money go? According to the NCAA, "...more than 90 percent of the revenue generated from this extension will be used to benefit college athletes through programs, services or direct distribution to member conferences and schools.”  

I’ll venture a couple edtech lessons from this $1.1 billion dollar annual contract:

Lesson 1 -  Higher Ed Is Big Business:

Okay, this lesson comes as zero surprise to anybody who has halfway been paying attention.  I don’t really want to get into the debate about should elite level college athletes be paid. (See an argument for paying March Madness basketball players here).  

Rather, the lesson I draw from this contract is that higher ed finances are interesting, complex, and operate at a very big scale.

How much do those of us in educational technology really know and understand about higher ed finances? We should be doing everything we can to educate ourselves about everything having to do with postsecondary economics - beyond and above our expertise in financial and budget areas related to technology and learning.  

If technology leaders are going to transition into higher ed leaders (albeit leaders who know lots about technology), then we will have to become knowledgeable about all areas of postsecondary education. This includes the business side of higher ed, and within this area the economics of college athletics.

Lesson 2 - Scarcities Are Relative and Unequally Distributed:

Everyone that I know who works in higher ed is operating under a permanent regime of scarcity.  There is not enough resources to meet all the demands.  Not enough people to do all the work. Many of us in higher ed technology agonize about the larger economic trends impacting our industry. The decline in state funding, and the growing adjunctification of our faculty.  We worry about the rising price of tuition and fees, and the resulting increases in student debt.  

It is therefore difficult to get one’s head around this $19.6 billion dollar contract.  Have you ever wondered why a few college basketball coaches make so much money? The answer is this CBS / TNT contract.  

I’m not making an argument that top level college coaches are overpaid. My guess is that if you figured out how much money and attention that a top-level basketball program brings to a university that one would conclude that the salary of main of the top coaches is a relative bargain.

The point is that these astronomical revenue and compensation numbers are part of an increasingly stratified and unequal system, one where students struggle to pay tuition and too many educators work for low-wages and with insecure working conditions.

What I don’t know, and what I’m curious about, is the impact of big-time college sports on the economics of the core teaching, research, and service missions higher education.  Do revenue sources such as the March Madness TV contract enlarge the pie - enabling dollars to be both attracted for and spent on education and knowledge creation?  

As an edtech person, I feel that I should have an informed opinion on the meaning and impact of big-time college sports for the larger story of higher ed finances.

Can you recommend any books or other resources to help me make sense of this story?

Just for fun, let’s look at the highest-paid college basketball coaches.  They are:

#10. Kevin Ollie, Connecticut

Total pay: $3,100,000

Max bonus: $336,665

#9. Gregg Marshall, Wichita State

Total pay: $3,130,000

Max bonus: $838,000

#8. Tom Crean, Indiana

Total pay: $3,152,867

Max bonus: $740,000

#7. Jamie Dixon, TCU

Total pay: $3,234,437

Max bonus: N/A

#6. Bob Huggins, West Virginia

Total pay: $3,340,000

Max bonus: $690,000

#5. Tom Izzo, Michigan State

Total pay: $4,150,359

Max bonus: $350,000

#4. Bill Self, Kansas

Total pay: $4,943,776

Max bonus: $525,000

#3. Sean Miller, Arizona

Total pay: $4,945,664

Max bonus: $1,260,000

#2. John Calipari, Kentucky

Total pay: $6,875,376

Max bonus: $50,000

#1. Mike Krzyzewski, Duke

Total pay: $7,299,666

Max bonus: N/A

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