Should we worry March Madness could bring down the US Economy (NYSE:SPY)? Hardly.
A new report by Challenger, Gray & Christmas, Inc. shows businesses will lose ~8.4 million work hours and ~$192 million during this year’s NCAA Men’s Basketball Tournament.
The company uses a very back-of-the-napkin model:
“Challenger estimates that total online viewership during work hours is likely to reach at least 8.4 million hours during this year’s tournament, which begins with special qualifying games on Tuesday, March 15. Multiply that figure by the average hourly earnings of $22.87 among private-sector workers and the financial impact exceeds $192 million.”
The company speculates more viewing options and additional games are the reason this year’s hours will be higher than last years.
The takeaway from all these hours lost makes perfect sense:
“At first glance, 8.4 million hours of lost productivity seems like it would deliver a crushing blow to the economy. However, it is important to remember that there are roughly 108.3 million people on private payrolls, each working an average of 34.2 hours per week, according to the latest Labor Department data. So, the total number of hours worked by the American workforce in one week comes to about 3.7 billion hours,” Challenger explained. “Over the three weeks of the tournament, the nation’s 108 million workers will have logged more than 11 billion hours of work. The 8.4 million hours lost to March Madness is a relative drop in the bucket, accounting for less than one-tenth of one percent (about 0.07 percent) of the total hours American workers will put in over the three weeks of the tournament.”
I’d also add we need to determine how much money March Madness generates for the US Economy. We’ve got tickets to games, travel expenses, more reasons to go out to eat or party, merchandise sales, and obviously the cable contracts and ad sales. If anyone knows what all that cash piles up to, let us know in the comments below and we’ll do a post about it.