Posted by John Vrooman on Wednesday, March 28, 2018 in NCAA Basketball.

Interview with French financial paper Challenges.

March madness in NCAA college basketball occurs in a natural US sports entertainment vacuum every Spring since the early 1980s. The lack luster NFL free agency period (transfer window) is followed by only a few true US football fanatics, MLB regular season that usually begins after the first of April is gearing up, the NHL and NBA regular seasons are winding down as teams position for playoff spots and amateur draft selection status.

After 90 percent of the NBA regular season has been played by mid-March, the top NBA players rest (do not play) in preparation for the long NBA playoff season that extends into Summer and the lower NBA clubs tank (lose on purpose) to improve their reverse order draft chances for the top amateur players. The NBA regular season outcome is virtually pre-determined by mid-February.

The NBA’s player resting at the top and team tanking at the bottom have become so epidemic as to threaten the credibility of the League’s bargaining power for TV rights fees after the current nine-year (2016-25) $2.6 billion (E 2.08 billion) annual contract expires in 2025. By comparison, the NCAA annual revenues (from all sources) are about $1 billion (E 800 million) including about $800 million (E 640 million) from TV rights fees for only 67 games in the NCAA Tournament (2011-34)

The NCAA Final Four basketball tournament has blown open the March sports window with a post-season tournament that mimics the excitement of interregional inter-conference top matches of UEFA Champions league in Europe. The early seeded matches are usually predictable David v. Goliath games with extreme interest (casual and professional gaming) in the emergence of an unknown underdog. By the final four weekend the usual Goliaths remain with at least one lower seeded surprise. My high confidence scientific logit projection of tournament was in shambles after the first round of the NCAA Tournament, being unceremoniously surpassed and outperformed by the random picks of casual basketball fans.

This year’s Cinderella is small conference Loyola of Chicago (Jesuit Catholic University) with the blessings of their 98 year old chaplain Sister Jean.

Almost everyone wagers at some level on the NCAA Final Four because anything can happen in the early stages. The tournament unites the US across political, cultural and regional schisms. In the early rounds of the scientifically seeded tournament, small state or private schools usually upset overconfident large universities. For the first time in history in this year’s tournament a 16^th seeded team (University of Maryland Baltimore County) defeated the overall top seeded and heavily favored team (University of Virginia). One UMBC alumni bettor won $16000 on a 20/1 long-shot bet.

Bettors know the historical probabilities of seeded matchup upsets but they don’t know where and when the upsets will occur. In a very similar manner to handicapping UEFA champions league bettors will favor relatively dependable defensive teams over flamboyant offensive clubs because of the importance of low variance in one and done knock out tournaments. But one thing is a sure thing: upsets will occur in the first round of 64.

Many bettors proudly favor their alma mater or regional conference teams in emotional wagers that challenge scientific rationality. The probability of NBA player success has little or no importance for betting but the player’s NBA future suddenly becomes a hot topic once the his college team is eliminated from the Big Show.

Published estimates of lost productivity are biased upward because they ignore the positive collegiality effect of the tournament on the work environment. (Wallet Hub study is probably not scientific). Ironically the positive intangible synergy created by the NCAA’s “water cooler effect” may be the only real net economic impact of college basketball in the irrational Final Four March madness window.

According to what is left of my logit projection model, the clear favorite for the National Championship has been Villanova from the start, but the recurring real world gut feeling of this tournament is also becoming clear: Do not bet against Sister Jean.

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Vroomdaddy Logit Model