Louisville’s Rick Pitino was perhaps the biggest winner in this year’s NCAA Men’s Div. I Basketball Tournament, becoming the first head coach to win a National Championship at two different schools. But CBS Corp. and Time Warner Inc. investors could also claim victory when March Madness had run its course.
From March 1 to April 9 (the day after Louisville defeated Michigan in the title game), CBS’ share price rose 5 percent. Heading into the Regional Finals (aka the Elite Eight), CBS shares hit the $46.69 mark, securing the company’s second-highest stock price of 2013.
Boosted by its Turner Broadcasting cable networks (TNT, TBS and truTV share March Madness media rights with CBS), TWX stock jumped nearly 10 percent over the same period, topping out at $58.80 per share.
This marks the third straight year both media companies put together a solid March rally, and it’s hard not to credit college hoops. While some observers feared that the lack of a definitive favorite would sap the ratings, this year’s tourney was the most-watched in 19 years, averaging 10.7 million viewers per game, up 11 percent versus last year’s 9.6 million.
Monday night’s capper also put up huge numbers. Louisville’s 82-76 win over the Wolverines drew 23.4 million total viewers, up 12 percent from Kansas-Kentucky in 2012. The Big East’s last hurrah also posted a 14.0 household rating, an improvement of 14 percent from the year-ago 12.3, and lifted its deliveries of adults 18-49 11 percent to an 8.4 rating.
Those results suggest that marketers looking to lace up for the 2014 tourney can expect to pay a premium for airtime. While the networks did not comment on pricing, sources said that first- and second-round games fetched around $250,000 per spot, with costs escalating as the tournament progressed. On average, a :30 in CBS’ Final Four coverage commanded as much as $1.1 million.
A 30-second unit in the Louisville-Michigan game went for as much as $1.6 million—up 10 percent versus last year’s going rate of $1.45 million a pop.
While there’s little doubt that CBS and Turner make a killing on the tournament, media buyers have expressed skepticism over Kantar Media’s estimates that the partners in 2012 shared $1 billion in ad sales revenue.
Insiders suggest that last year’s March Madness tourney took in around $775 million in ad sales revenue—shy of 10 figures, but certainly not chicken feed. Given the relative price increases this time around, sources said that overall sales added up to as much as $875 million.
Thanks to its coverage of Super Bowl XLVII, the Grammy Awards and March Madness (not to mention a stable of high-rated original series such as NCIS, The Big Bang Theory and the recently renewed Elementary), CBS is assured of knocking Fox off the 18-49 throne. With mere weeks to go before the 2012-13 season comes to a close, CBS is tops among total viewers—with an average prime-time delivery of 12.2 million viewers, the Tiffany Network boasts a 4.3 million-viewer advantage over runner-up ABC—and in the 18-49 demo (3.0).
Analyst consensus has CBS once again leading the charge in the upfront, securing CPM increases of between 6.5 percent and 7 percent. Barclays Research projections see CBS securing a record $2.93 billion in advance commitments, an improvement of 11 percent from last year’s $2.65 billion.