SBJ/March 11-17, 2013/In Depth

NCAA Tournament turning points

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Dome for a home

The NCAA had experimented with playing the Final Four in a dome. The 1971 championships were held in the Astrodome and the 1982 Final Four was played in the Superdome. But in the 1990s, with the tournament growing and
The RCA Dome in Indianapolis played host to the championship in 1997.
Photo by: Getty Images
tickets becoming more difficult to obtain, the basketball committee began choosing domes exclusively. The 1996 Final Four in Continental Airlines Arena at The Meadowlands was the last played in an arena.

Using a minimum seating capacity of 30,000 as its gauge, the committee effectively eliminated traditional arenas from competing for a Final Four. In 2003, the committee made 40,000 the minimum capacity.

“I remember those discussions vividly. They were lengthy and spirited,” said Tom Jernstedt, the former NCAA executive vice president who for 38 years had oversight of the tournament. “The question was asked over and over: Is this the right thing to do for the tournament? Everyone agreed that playing in an arena is more fun to watch and offers a better atmosphere. That’s a given. … Most say that revenue was the driving factor, and that was a consideration, but it really came down to the number of tickets available. We had a lot of constituents who needed tickets, and too often, the competing schools were getting only 1,000 to 1,500 each. Every [athletic director] who made a Final Four said tickets were the biggest nightmare. We just couldn’t stay in a conventional building.”

During those committee meetings, Jernstedt shared his experiences from New Orleans in 1982, when he walked through sections of the Superdome with the worst seats. The NCAA was so worried about sight lines that the tickets were actually published with the distance from the seat to the court.

“As I talked to people, they said they knew what they were getting when they bought the tickets, so nine out of 10 of
them were OK with the seats,” Jernstedt said.



The power of promotion

One of the turning points in the early days of the NCAA’s corporate sponsor program was the first co-branded promotion by Pizza Hut and Rawlings around 1987. But the deal came with a high degree of risk for Pizza Hut, something its marketing chief, David Novak, wasn’t sure he was ready for. The promotion called for Pizza Hut to buy 2 million basketballs from Rawlings for $2.17 each and re-sell them for $2.99 with the purchase of $10 or more in pizza.

Novak, now the CEO at Yum Brands, had visions of unsold basketballs sitting in Pizza Hut closets all over the country.

Pizza Hut's promo ball from 1991.
With encouragement from Jim Host, who oversaw the NCAA’s marketing at the time, Novak ultimately decided to make the buy, which was the largest order of basketballs Rawlings had ever filled. Host promised that he’d promote the heck out of it.

Each of the balls had the Final Four logo, and marks representing Pizza Hut and the NCAA. They were shipped to a central location and distributed to Pizza Hut restaurants around the country. On that Selection Sunday, Novak called Host with an urgent message. “Stop advertising. We’re sold out of basketballs.”

“That promotion dramatically helped expand the brand of the Final Four,” Host said. “Pizza Hut ran the promotion for the next eight years and it was huge every year. Up to that point, the Final Four wasn’t really recognized that much as a brand. It really spoke to the power of the promotion and helped establish a brand.”

“The promotion made Pizza Hut the largest retailer of basketballs in the country,” said T.J. Nelligan, who worked with Host before starting his own agency, Nelligan Sports Marketing. “It was so successful that sporting goods stores were upset the promotion was destroying their price points and they were losing sales to a pizza restaurant.”



A Coke, a smile and a big check

The genesis of Coca-Cola’s staggering 11-year, $135 million NCAA sponsorship signed in 2002 could be traced to a Pepsi in Jim Host’s refrigerator.

Before Coke won the mega-deal and started its relationship with the NCAA, Pepsi sponsored the soft drink category.
Fans flock to the Big Dance concert series sponsored by Coke Zero in 2010.
Photo by: Getty Images
Host, who managed the organization’s corporate sponsorship program at the time, was loyal first and foremost to his best business partners, and Pepsi was his soft drink of choice.

A year earlier, in 2001, was when Coke positioned itself for the deal. Herbert Allen III entered Host’s office for a friendly visit. Even though Host knew Allen’s father was on the board at Coca-Cola, Host offered a Pepsi from his office fridge. Allen was a bit perturbed.

Host didn’t know it at the time, but he had triggered a bidding war. Only a few hours after Allen had departed, Host received a call from Doug Daft, then the CEO of Coke.

“Doug said, ‘Jim, I want to come talk to you about the NCAA rights,’” Host said. “I told him that Pepsi already had the deal, and he said he wanted to meet with me and start a relationship.”

Weeks later, Daft and longtime Coke executive Scott McCune flew to Lexington, Ky., to meet with Host, which started a relationship that led to Coke’s NCAA deal. Former COO Steve Heyer negotiated the deal and Coke won the rights in 2002, just as CBS was taking over the NCAA’s marketing program.

Until that point, the NCAA’s program was called corporate sponsorship and didn’t include TV advertising. Under the reformed model in 2002, CBS ad units were included in the deals, and the name was changed to corporate champion (the highest level) and corporate partner. Coke has been a corporate champion ever since.

“It was a game-changer because those sponsorships were going for about $1 million to $1.5 million a year back then,” Host said. “Nobody had paid the amount of money that Coke did. It led to a complete reconstruction of the corporate program.”



CBS and Turner team up

When CBS’s Sean McManus phoned Turner Sports’ David Levy to gauge his interest on a joint NCAA bid, Levy’s response was direct.

Photo by: David Holloway / Turner Sports
“I told Sean that if he was simply looking for a place to put games on cable, there’s no need to talk,” Turner’s president told the chairman of CBS Sports. “But if we’re talking about a true partnership, then, yes, I’m definitely interested. That was our first exchange. Taking what CBS had — and it was terrific — and enhancing it by putting all of the games on, has been incredible. Every metric is overachieving.”

Many of the NCAA tournament’s major turning points have been media driven, from the first live broadcast to the first billion-dollar contract and March Madness Live. When CBS and Turner teamed to broadcast every NCAA tournament game live in 2011, that marked another major advancement for the tournament. Early-round games were televised regionally in the past.

“It’s a partnership that’s unique in the world of sports TV and, really, in the world of sports business,” McManus said. “To combine production teams, sales teams, on-air talent, it’s really never been packaged before like this between two major corporations. Without a doubt, it’s groundbreaking.”



Bigger is better

Nothing is more controversial around the NCAA tournament than the topic of bracket expansion. “It’s an evergreen issue and it comes up with every basketball committee,” said Tom Jernstedt, the former NCAA executive vice president.

The turning point that most everyone references was 1985, when the bracket grew to 64 teams. The tournament’s
popularity exploded from there. Another turning point was the expansion that wasn’t made — the proposal to expand to 96 teams in 2010.

Greg Shaheen, then the NCAA’s senior vice president, was charged with negotiating the NCAA’s next TV deal. Among the proposals he floated to potential network partners was a 96-team bracket. The NCAA tournament at the time had 65 teams, plus 32 more that played in the NCAA-owned NIT, for a total of 97. It only made sense, Shaheen reasoned, to explore what a 96-team bracket would look like and how much revenue it might fetch.

That led to a bitter showdown between Shaheen and Washington Post columnist and author John Feinstein in the news conference at the 2010 Final Four. Shaheen said, if he had it to do over again, he would have done a better job explaining the 96-team bracket versus the 65-team bracket.

“The tournament is going to expand,” Feinstein concluded in The Washington Post. Well, he was right. It went to 68 teams.



What others are saying

“I remember when the ratings came in from NBC — a 24.1, a 38 share. We were all thrilled to death. The tournament had hit new highs after the 1979 final between Michigan State and Indiana State — Magic vs. Bird. I remember thinking, ‘Wow, the game has really exploded now.’ There’s no question Bird and Magic were the two principles who drove the great story lines, the drama. They made it all very special. You had the big school against small school. Big conference against smaller conference. You also happened to have a great white player and a great black player. There was marvelous intrigue all around it. That helped make the tournament what it is today.”
— Tom Jernstedt, the NCAA’s longtime executive vice president who oversaw the tournament from 1973 to 2010

“During the 1986 NCAA TV negotiation, CBS faced competition from two networks for the last time until 1999. Peter Lund led the CBS team. We were trying for our third exclusive three-year deal (remember them?). NBC and ABC wanted in badly and would have taken any split possible. CBS wanted exclusivity … and bid $55 million per year, period. We had to submit a sealed envelope bid in the Kansas City hotel on the Saturday night before the Sunday decision. Lund said, ‘Keep the envelope open.’ He reached in his pocket and put in 47 cents in coin (message: we’re tapped!). CBS was called first in the morning. At the end of a long hour, (NCAA Basketball Committee Chairman) Dick Schultz walked to Lund’s end of the table with a closed hand and said, ‘… we agree a deal has to be good for both sides, Peter. Here’s your 47 cents back. You’ve got a deal!’ ”
— Former CBS executive and media consultant Len DeLuca


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