College basketball: Does the NCAA Tourney impact the Utah and national economies?
It’s a storyline that plays itself out every year at this time. As you read this, millions of Americans are pouring over online and printed NCAA Basketball Tournament brackets, attempting to determine which five-seed will be upset by a 12, and which team could make a Cinderella run to the Final Four.
And that’s before the games even begin on Thursday.
Detractors love to predict that this hoops hoopla wreaks havoc on American worker productivity and focus. But is that necessarily true?
And what’s the affect locally in the State of Utah?
The National Impact
Nationally, a few groups have attempted to quantify the impact of the games on worker output.
MSN and Impulse research produced a study recently, wherein 66 percent of respondents who are US workers indicated they would follow March Madness during work hours. And 20 percent indicated they would spend more than two hours doing so.
Another group, Challenger Gray and Christmas, contends that over 3 million American workers will watch games at work, taking one to three hours to do so.
“But, if you ask department managers and corporate IT managers, March Madness will definitely have an impact on the flow of work, particularly during the first week of the Tournament. Starting the day after selection Sunday, people will be organizing office pools, researching teams and planning viewing parties. When the games begin around noon, Eastern time, on Thursday, many companies will probably notice a significant drop in Internet speeds, as employees start streaming games and clogging up the network’s bandwidth,” the report states.
A big issue with these studies is that they tend to measure the impact of the Tournament in terms of hourly wages lost by the company. But they fail to consider the output value lost where those workers were actually producing something.
The Local Impact
So what about here in Utah? Can a monetary value be placed on lost productivity among Beehive-state workers who are tuning into tip-off instead of polishing up a project?
Despite the fact that no local team is participating in the Big Dance this season (for the first time in over a decade) Utah’s sports-minded populous will certainly be tuning in.
Looking at the math, start with the fact that Utah’s annual GDP is just over $100 billion. Then divide that by the number of working days in the year, which in 2013 is 251, and that’s about $400 million produced by Utah workers per day.
Now temper that 66 percent statistic from the MSN study and assume 50 percent of Utah workers spend just one hour of the workweek—for the entire tournament—filling out brackets, watching games, tracking the betting pool and lamenting the flaming wreck their picks are.
Seems like a pretty conservative number.
So take that $400 million Utah GDP per day, divide it by eight to get the average monetary value of productivity for an hour, and it’s about $50 million.
Now, assume half of workers take just one hour during the course of March Madness, and we’ve got a $25 million lost-productivity impact in Utah.
Of course, that assumes workers won’t make up the work later and that they wouldn’t fritter those hours in some other off-hand way anyway.
But the point is, March Madness affects the job-site and its productivity during the week of the NCAA Tournament in a real way.
Making up for lost dollars
The good news for Utah is the fact that Salt Lake City is hosting early-round tournament games, which bring travel and tourism dollars in the front door to compensate for money walking out the back.
And with schools like Gonzaga, New Mexico and Arizona set to play in Energy Solutions Arena, there’s likely to be plenty of local and national interest—and dollars—at the games.
Measuring that impact is a challenge, but after Utah hosted NCAA games in 2010, Jeff Robins of the Utah Sports Commission estimated it provided as much as a $10 million boon to the local economy.
If the $25 million productivity loss is in the ballpark, playing host to Tourney games makes up at least a good chunk of that.
Either way, next time a work associate comes into your office baffled how a 14-seed could upset a three, you can use lost productivity as an excuse to end the conversation before you get sucked in. And don’t forget to turn your own bracket in before you leave the office Wednesday.
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