[lbo-talk] Challenger quantifies the loss from March Madness, down to one decimal point!

Doug Henwood dhenwood at panix.com
Thu Mar 10 07:07:05 PST 2005


[and offers suggestions on how to co-opt!!]

CHALLENGER, GRAY & CHRISTMAS, INC. March 10, 2005

For Release At 10:00 A.M. EST March 10, 2005

March Madness aka NCAA Men's Basketball

Office Productivity Loss Could Surge To $889 Million

NEW YORK - Starting next Tuesday, productivity in offices and plants across the nation could take a stronger hit than in past years as a result of the NCAA men's basketball tournament, better known as March Madness. Reason: For the first time, three websites (cstv.com; cbssportsline.com; ncaasports.com) will provide real time Internet broadcasts through the round of 16 surviving teams. A new analysis by global outplacement firm Challenger, Gray & Christmas, Inc., conservatively estimates that the impact on the bottom lines of American companies could reach $889.6 million over the 16 business days of the tournament.

For the nation's employers, the onset of March Madness amounts to an instant productivity drain, as workers, including college basketball fanatics and participants in office betting pools, spend an inordinate amount of time monitoring their favorite teams.

The tournament is played in basketball arenas throughout the country from Tuesday through the nationally broadcast (CBS) championship game on Monday night, April 4, in St. Louis.

In 2003, Internet monitoring software maker Websense Inc. estimated that college hoops fans spend about 90 minutes per week on college basketball web sites during March Madness.

"That figure has the potential to jump significantly this year as workers have the opportunity to watch games right from their desks. Unlike most major sporting events that occur on the weekend or in the evening, the first four rounds of the NCAA men's basketball tournament feature games that begin as early as 11:00 A.M. during the workday," said John A. Challenger, chief executive officer of Challenger, Gray & Christmas.

Even if employees spend just 90 minutes per week checking basketball websites instead of working, the cost to employers is significant. Based on that conservative figure, Challenger calculated that workers will spend 13 minutes per business day surfing college hoops websites.

Each 13 minutes of unproductive work time costs employers $3.89 per worker, based on the current average hourly wage of $17.96 for all workers nationwide. That $3.89 might not sound like much, but if one multiplies it across the population of working college basketball fans, the toll is huge.

According to the NCAA, 22.9 million people consider themselves big college basketball fans. Based on the latest employment to population ratio of 62.3 percent, 14.3 million of these "big fans" are employed. The cumulative cost to employers, if each of these 14.3 million individuals spent just 13 minutes focusing on March Madness instead of work, could reach $55.6 million.

If you spread this $55.6 million over the 16 business days of the tournament (assuming that employees will start filling out their brackets on March 14), the total cost to employers could reach $889.6 million.

Employers have good reason to be worried. Offices have become a center for NCAA Tournament betting pools. According to the Federal Bureau of Investigation, of the estimated $3.5 billion that will be gambled on the Tournament, 52 percent will come from the millions of office pools across the country.

"During March Madness, even the most casual basketball fans can become obsessed with following the teams they have picked in their brackets. Everyone probably knows at least one person who may not watch a single college basketball game all season, but suddenly starts checking scores on the Internet every 30 minutes during the Tournament because they bet $5 in the office pool," observed Challenger.

Does this mean that employers should clamp down on such office pools? "Not at all," says Challenger. "In fact, companies should try to find a way to take advantage of employees' excitement over the tournament. This may not only help build morale, but it may also help the company control the amount of productivity lost.

"Companies may want to expand their Internet blockers to include college basketball sites and they may want to encourage workers to refrain from watching entire games at their desks. However, there is no reason a company cannot institute a companywide pool, which employees can enter for free and winners receive some type of gift, such as an extra day off or a restaurant gift certificate," Challenger suggested.

Challenger offered some additional ideas on ways companies can co-opt March Madness excitement to build a loyal and more productive workforce.

# # #

CHALLENGER, GRAY & CHRISTMAS, INC.

March 10, 2005

MARCH MADNESS WORKPLACE MORALE BOOSTERS 1. Organize a company pool. Employees can enter for free and the winner is given a gift certificate to a restaurant or store.

2. Offer flexible schedules. On the four days when tournament games are played during work hours, allow workers the opportunity to arrive early so they can work a full shift and still leave in time to see the games.

3. Keep television in breakroom tuned to coverage.

4. Team sweatshirt day. Relax the dress code (for employees not meeting with customers) for the first Friday of the tournament so that fans can wear the sweatshirt of their favorite college team (even if the team did not qualify for this year's tourney).

5. Pick 64 MVPs. Symbolizing the 64 teams initially in the tournament, companies could bestow Most Valuable Player honors on exceptional workers chosen ahead of time by supervisors. For companies with fewer than 64 employees, MVPs could be designated for the Sweet 16, Elite Eight, or Final Four.

6. Keep a bracket posted. For employers without companywide Internet access, keep a large, updated tournament bracket in a common area so workers can check their teams' progress.

7. Offer anti-tourney prizes. Give the non-basketball fanatics in the office a chance to win. Those who aren't interested in the tournament can enter their names in a special raffle drawing for an afternoon off or a special gift from an area retailer.



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