🏀 The (Hidden) Business Behind March Madness

These next few days have to be some of the best on the entire sports calendar.

It’s the only time of year when you’re not expected to work, but you also don’t have to take any vacation days (or so I’m told, I just make TikToks for a living).

Anyways, today we’re diving deep into the business behind March Madness:

🗞 The Big Story: Laying Wood

📉 Biggest Loser: Worst Take in Sports?

🏆 Winner’s Circle: The Best Bet in March

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🗞 The Big Story

One random town of 300 people has made every March Madness court for the last 18 years, and today we’re going to look at how they do it.

A Quick Geography & History Lesson: Amasa is an old mining town in the Upper Peninsula of Michigan, and it's home to one of college basketball’s most important partners.

That’s because, for decades, the courts for March Madness didn’t change from what the host school already had.

Then, in an attempt to remind everyone who’s really hosting the tournament, the NCAA slapped a generic design on every court from the play-in game to the Elite Eight.

But then in 2016, the NCAA decided that every game from the First Four to the National Championship would have a custom court to give each tournament a distinct look.

Now don’t get me wrong, I love it when sporting events do this.

(Even though it seems like we might be losing the Final Four logo to the same corporate standardization that overtook the Super Bowl logo.)

Nevertheless, the NCAA is relying on this rural mill town of 300 people to:

• Cut

• Build

• Paint

• Ship

• Assemble

12 new courts every single year between the men’s and women’s tournaments.

But Connor Sports has been up for the challenge every year since 2006, and their process for pulling all of this off in time is insane:

• October: First-grade northern hard maple trees from Michigan’s Upper Peninsula are cut and built into pallet-sized pieces.

• January: Eight guys start putting the finish on the wood, and then another four do the custom paint jobs over the next 2 months.

• March: The cut, finished and painted pieces are shipped across the country to each arena.

Once on location, they’re assembled like puzzle pieces by teams of ten which usually takes around four hours.

By The Numbers: Just the Final Four court alone is comprised of 381 panels, weighing 160 pounds each. But across all the courts for both tournaments?

• 56,000 pounds per court

• x12 courts Connor Sports has to make

• = 672,000 pounds of wood that are cut, painted, and assembled

Postmortem: But what happens to these courts after they’re done being used?

Option 1: The winning schools can buy the courts from the championship and Final Four to either repaint and use at their own gyms or to hang as decoration.

Option 2: Some schools buy the championship court and chop it up to sell it to their fans.

The rest of the courts will get disassembled and shipped back to a storage facility until they’re sold to cash-strapped athletic departments for around $90,000 a piece, a $15,000 savings on a court that’s only been used a few times.

Next year’s goal: Take a trip to Amasa and see this process for myself.

📉 Biggest Loser

This is the dumbest take in sports, and it could cost teams millions.

Clock-Work: Around this time every year, people start complaining about the play-in game for March Madness.

TL;DR: It’s unfair that the four teams who won an automatic bid by winning their conference tournament have to play an extra “play-in” game.

And, for a while, I thought they were right, but then I saw a video that completely changed my perspective.

Distribution Basics: Every year the NCAA sets aside hundreds of millions of dollars to pay the teams that make the tournament.

This year that total “basketball fund” will likely be over $170 million and the money that gets paid out is distributed to a team’s entire conference.

But not every conference gets an equal share of the pie.

Because the total distribution is based on how many games a team plays in March Madness, and the final payouts can be staggering.

Why It Matters: For starters, the 68 teams that simply make the tournament get paid “one unit,” and this year one unit is estimated to be $2 million.

But here’s the best part:

The conferences get paid that amount every year for the next six years.

Meaning any team that makes the tournament this year will be paid $2 million per year until 2030. That’s over $12 million for just making March Madness once.

And for a lot of smaller schools and conferences, that’s program-changing money, but it gets even better.

Because for every game that a team plays (minus the championship), they get to add another unit to their annual payout.

This means a team that goes from the play-in game to the Final Four would get paid the maximum 6 units per year for the next 6 years for a total likely worth over $72 million.

Harsh Reality: But let’s be realistic because a 16-seed in the play-in game isn’t going to reach the national championship.

In fact, until 2018 a 16-seed had never beaten a 1-seed… and that’s the point.

The best way to give these small-conference, 16 seeds a chance to win as much money as possible is to give them an extra game against another 16-seed.

This creates a winnable game that could earn teams and conferences that really need it an extra $12 million over the next 6 years.

Plus, it’s a stand-alone game for schools that never get to see the limelight. What’s not to love?

🏆 Winner’s Circle

This man just placed the only bet on March Madness that’s impossible to lose, and he’s going to make at least $7.5 million because of it.

Genius Promotion: Jim McIngvale is the owner of the Gallery Furniture retail chain in Texas and every year he runs a promotion that guarantees he wins big no matter what he bets.

But his plan is actually pretty simple:

Step 1: He starts by picking a team he wants to bet on, in this case, the University of Houston.

Step 2: He’ll then run a promotion at his stores where a customer who buys a mattress worth $4,000 or more will get it for free if Houston wins the championship.

Step 3: Once he sells enough mattresses, Jim places a bet on Houston to cover his potential losses.

• This year, he bet $1 million on the Cougars to win March Madness at +750 odds, which means he would profit $7.5 million if they win it all.

The Best Part:

Outcome 1: If Houston wins and Jim has to refund everyone who bought mattresses, he could refund up to 1,875 mattresses and still break even with the winnings from his Houston bet.

• 1,875 mattresses x $4,000 = $7.5M (winnings from his bet)

Outcome 2: Even if Houston loses, he only needs to sell 250 mattresses at $4,000 a piece to cover his losses on the initial $1 million bet.

• 250 mattresses x $4,000 = $1M (cost of initial bet)

And if he ends up selling more than 250 mattresses, then he’ll actually make money on a losing bet. Not to mention all the free publicity he’s getting.

Veteran Move: It’s a seriously genius move, but it’s not the first time he’s done it.

Jim, aka “Mattress Mack” did this same thing last year when he put $4.1 million on Houston to win the tournament and with the Astros to win the World Series in 2022.

Note: I’m aware revenue and profit are different (University of Minnesota, Carlson School of Management ‘17, not to brag). I just used these nice, round numbers to prove a point.

⏱ In Other News

• How the hell are the Savannah Bananas still in business?

• No more white shorts in women’s soccer (good).

• And the best sports business city in America is…

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👋 Happy Friday, don’t work too hard today.