Sports Arena

Crunching March Madness

How Duke's elimination may have boosted workplace productivity.

By 3.28.08

Send to Kindle

Employers dread March Madness. Challenger, Gray & Christmas CEO John Challenger's famous annual survey predicts this year's tournament will have cost $1.7 billion, all told, in lost productivity.

The survey has come under fire from some quarters. But, for the moment, let's leave Challenger's $1.7 billion figure unchallenged. That's a lot of money -- a little more than 2 percent of basketball fans' total productivity during the tournament. It's certainly enough to hurt a bottom line.

Of course, not everyone follows the tournament. Television ratings are down 9 percent from last year's Madness. Eight out of nine televisions in use during game time will be tuned elsewhere. Thirty-seven million people will enter an office bracket pool this year, out of a total U.S. workforce of about 153 million.

That means a little less than one half of 1 percent of total productivity during the tournament will be lost to workers filling out brackets and watching games on company time. This year's tournament lasts 16 work days. Over the course of an entire year, that $1.7 billion comes to a little more than one hundredth of 1 percent of GDP.

Not exactly earth-shattering, is it? If economic growth goes negative this quarter, anybody who blames March Madness should be sent to the showers early.

JOHN CHALLENGER protests, "Those who insist there will be no impact are kidding themselves." He's right. But those who assume that his estimate of that impact is accurate are also likely kidding themselves.

The survey makes a leap in logic to get to $1.7 billion that perhaps it shouldn't -- that if people weren't following the tournament, they would otherwise be working. Truth is, workers will waste some of their time whether it's March Madness season or not.

Employers know this. They are not stupid. Down time is already factored into wages. People are paid according to how much they are expected to produce. And it is expected that they will not spend their entire 40 hours on the job actually working.

Nobody knows whether filling out brackets or talking trash to coworkers is additional slacking, or whether it simply substitutes for other forms of slackery. Workers regularly waste time forwarding bad Internet humor to friends and family. They make personal calls on office time. They go to the water cooler to catch up on the latest gossip.

Challenger may even be right about the $1.7 billion in time dedicated to March Madness, but we don't know if it's a net productivity loss or not.

My hunch is that there is a net loss, but it is a lot smaller than $1.7 billion. People probably do reduce their other derelictions of duty, but not enough to compensate for all the time they spend following games.

IT'S ALSO POSSIBLE for the tournament to have some positive effects in the workplace. March Madness can be great for morale, and good morale often translates into to productivity gains.

For instance, Duke -- the hated Yankees of college basketball -- lost to West Virginia on March 22. Their elimination brought joy to perhaps as many as 90 percent of college basketball fans.

There are other morale-boosting benefits besides Duke's early-round elimination. Almost every office has a bracket pool, official or otherwise. The best ones give the last-place finisher his money back, just to rub it in. Besides being good clean, mostly illegal fun, these bracket contests help employees get to know each other a little better, even if only to trade friendly insults. A happy office tends to be a more productive office.

True, brackets come at a cost, and not just the $5 entry fee. They take time to fill out. That time could be spent working -- or forwarding Hello Kitty e-mails. No one knows the exact balance. But the worst possible impact is .01 percent of GDP and more likely it's far, far less. The people might as well have their fun.

Like this Article

Print this Article

Print Article
About the Author

Ryan Young is Fellow in Regulatory Studies at the Competitive Enterprise Institute.