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March Madness Beyond the Idiot Box


CBS is expecting a huge payday after jacking up the basketball tournament's presence on the Web

There are nearly 62,000 "haters" of the Duke University Blue Devil basketball team on Facebook. An additional 29,000 would just as soon see the University of North Carolina's blue-and-white-clad Tar Heels fall into the Atlantic. Yes, it's March Madness, and folks at the water cooler are working up the usual lather over which college team will dominate basketball's rite of spring. This year there's a twist. Some of the hottest action is online, where fans will be viewing the games on every available computer screen, cranking up the excitement—and the profits.

For CBS (CBS), which has the rights to NCAA's championship, it's a fast break to the Net. The TV network will stream all 63 games this year—up from 56 last year—to 200 Web sites, making March Madness the biggest expansion beyond the boob tube for any major sports event. Online ads could bring CBS $23million, says Chief Executive Leslie Moonves. That's up from $10 million last year, when the network streamed games only on its own site and on NCAA.com.

TV ads will still make up the bulk of the $545 million Moonves & Co. are expected to reap during the three-week event. A 30-second spot for the Final Four games can run as high as $1.7 million. CBS is also offering its games to DirecTV, which charges $69 for the whole event and will put as many as four games at once on a single TV screen. A lot of the growth will be online, however. About 1.4 million unique users viewed streams of the games last year, and the number could jump by as much as 50% this year, says Jason Kint, senior vice-president and general manager of CBSSports.com, which links its game feeds to the 200 Web sites. And what gets the online faithful fired up? That's where Facebook comes in, even though it doesn't stream the games. Last year 2.6 million fans used a "bracket" service the social-networking site offered. This online equivalent of the old office pool, without actual bets, allows people to select winners for each of the games in the five rounds leading up to the Apr. 7 final in San Antonio—and compare their results with friends. CBS has enhanced the bracket with tons of easy-to-click stats, including how teams have fared against similar opponents in the past. "The last time I checked, about 50 of my friends had already signed up," says A.J. Marino, a Los Angeles-based management consultant and Ohio State University graduate. "Having the opportunity to compete against all of your friends for free is a lot of fun."

"It's bracketology," says Andrew Donchin, director of national broadcast for Carat North America, part of the giant Carat media and marketing conglomerate. "It's like the office pool used to be, except you can do it in real time." Donchin says that Carat's March Madness advertising clients, such as Papa John's Pizza (PZZA), the Outback Steakhouse chain, and Marriott International, have signed on for both online and TV broadcasts. AT&T (T), Coca-Cola (KO), and Pontiac are the so-called Corporate Champion sponsors, whose ads also get placed alongside the Facebook brackets. For that, fans can go to ESPN.com, YouTube, Yahoo! Sports, (YHOO) and members of CBS Audience Network, a collection of sites such as Joost that stream its entertainment shows as well. All told, CBS has signed up more than 30 online sponsors whose ads will show up when you click on the NCAA March Madness feed.

Is this a slam dunk for CBS? Maybe. Its online offerings have already proven a big hit with the mostly younger, tech-savvy set. To pull in more fans, CBS this year scrapped a sign-up requirement. Moonves and his team know that in the world of college basketball, bigger is always a good thing. A couple of high-flying scoring machines in the final game would be even better.

Grover is Los Angeles bureau chief for BusinessWeek.

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