You hear that? It might take the form of arguments happening in the cubicle down the hall, or perhaps a co-worker’s feverous scribbles on a coffee-stained sheet of paper. Either way, that’s the sound of March Madness, the annual single-elimination tournament that pairs 64 of the best NCAA Division 1 college basketball teams against each other. Every year, this half-month-long exhibition captures the attention of fans, gamblers, investors, and advertisers. But they aren’t the only ones: It turns out that researchers, too, have been paying attention, and some of their results concerning this maddening affair are quite interesting.
Anyone who has a vested interest in college basketball—or really who's ever filled out a bracket—knows that calling March Madness a "maddening affair" is no exaggeration. March Madness seems to be the most consistent producer of upsets, where the most dominant teams can have their season grind to a screeching halt in a matter of minutes. Filling out a bracket which correctly guesses each of the 63 games, as is the tradition, is next to impossible (the chances of actually doing that are one in 9.2 quintillion). Might as well just flip a coin then, right? Actually, you should.
Dae Hee Kwak, assistant professor of sport management at the University of Michigan, filled out three brackets in 2012 by relying on the flip of a coin. As the study showed, his average of correct winners was higher than that of his participants, who filled out their bracket using, you know, actual knowledge of college basketball. This led him to conclude: "A grandmother who's never seen a game has a similar chance of doing as well as her grandson who spends eight hours a day watching and researching basketball."
While the chances of filing out a perfect bracket are—let’s be honest—basically zero, the tournament is still one of the most popular annual sporting events in the country. Last year, 184 million unique viewers watched via television, online, or other streaming services. (That's 64 percent of the United States’ population.) While it has been well documented that the annual tournament is a blow to workplace productivity—total revenue lost while employees are filling out brackets, watching games, tweeting, or checking scores is supposed to total $1.9 billion this year—the stock market will still ultimately benefit.
"A grandmother who's never seen a game has a similar chance of doing as well as her grandson who spends eight hours a day watching and researching basketball."
Numbers collected and analyzed by the market data firm Kensho showed that nearly every major stock in the S&P 500—445 of them—has seen a positive return during the tournament for the last 10 years. The tournament and the surge might not be correlated; some loose theories point to March being the end of a quarter, which inevitably results in last-minute stock purchases from investors, and most people are receiving an extra bit of cash via tax refunds this time of year. But a positive growth for 97 percent of S&P 500 companies over the last 10 years is a relationship that’s hard to ignore. And this is to say nothing of the billion dollars it produces in advertising revenue, which is more than the Super Bowl does.
But of course, March Madness is not just about the money it earns, the viewers it attracts, or the brackets is breaks—it’s about the sport of basketball and its college athletes. This past weekend, John Oliver had an expectedly excellent takedown of the NCAA and its refusal to pay student athletes some of the millions of dollars they are generating for their respective institutions of higher learning. The school’s thinking is that the opportunity to play basketball at the collegiate level not only affords them a (nearly) free education, but it lubricates the path to the NBA. But as Oliver pointed out, less than two percent of college athletes progress to play their sport professionally.
An appropriate question to ask on the precipice of the tournament, then, would be whether or not a great performance boosts said college athletes' chance of playing in the NBA. The answer, at least in part: it actually does.
Researchers at Haverford College recently conducted a study that looked at data concerning collegiate and professional basketball players from 1997 to 2010. They discovered that a surprise March Madness performance—on either an individual or team level—does indeed affect NBA draft decisions. Despite the fact that "NBA personnel who are making these draft decisions are certainly not irrationally overweighting this [March Madness] information," the players who produce these unexpectedly good performances "are more likely than those without bumps from March Madness participation to become one of the rare NBA superstars in the league," the researchers wrote. Shining in the national spotlight while in college, it turns out, means players can do it at the professional level as well.
So sit back and make your bets, but just realize that this tournament is a lot more than a well of disappointing brackets.