What would you do for $1 billion?
Would you leave your family and friends behind forever and dedicate your life to starting an internationally successful company? Would you strive to be the greatest athlete ever at a sport of your choosing and then reinvest all the money you earn into various enterprises? How about just watching the NCAA Men’s Division 1 Basketball Championship, or, as it’s more commonly known, March Madness? If you chose the last option you’re in luck. There’s no guaranteed way to make it to a billion dollars, no matter how successful of an entrepreneur you think you can be. This year though, thanks to a man you may have heard of, Warren Buffett, it’ll be possible to add a nice little billion to your bank account just by watching basketball. Buffett has put forward the ultimate sports bet of our generation; if anyone can successfully predict the winner of all 64 games during the March Madness tournament, a perfect bracket, he will personally write them a check for $1 billion. Again, in the words of Walter White, that’s billion with a B.
First off, for those who aren’t familiar with the man, who is this insane billionaire, hell bent on throwing away his fortune? Warren Buffett is the head of Berkshire Hathaway, a multinational holding company based in Omaha. Buffett is responsible for turning Berkshire Hathaway from a failing textile company into an insurance and investment operation that is the 9th largest publicly traded company in the world. The man has lots of cash to splash, and even losing a billion won’t really put a dent into his bank account. The 83-year-old billionaire is also a self-confessed huge fan of basketball, which takes us full circle to this extraordinary bet. Unbelievably, Buffett himself has orchestrated all of this. He approached Dan Gilbert, the owner of the Cleveland Cavaliers and the founder of Quicken Loans which is a privately owned mortgage lending business. Buffett wanted to collaborate with Quicken to run the contest, putting his own money on the line as long as they handled all the operational questions involved in setting up. Buffett also received an undisclosed premium to sweeten the deal. He must have been feeling dangerous or that the odds are in his favor, since a few days ago both parties went public with the information on the wager. In addition to the possibility of a $1 billion grand prize, the 20 most accurate brackets will be given $100,000 to spend towards the purchase, refinancing or remodeling of a home.
In order to win the bracket, you have to select the correct winners in all 64 games of the NCAA Men’s Division 1 Basketball Championship. The ‘March Madness’ tournament is composed of 68 teams from colleges across the entire NCAA, which are then organized into four divisions and ranked and seeded according to their performance in the regular season. Teams that win move through the bracket at predetermined points and face other teams which have gone through the bracket in the same way. It’s structured in a single-elimination format, meaning that each team gets one chance to move through each round. If a team loses a game at any point during the tournament, they’re out. Unlike other tournaments in sports where the teams are all re-drawn after each round, the path to the championship is stable and relatively clear for teams competing in the tournament.
The tourney first took place in 1939 and has become more prestigious year after year. The boom in popularity of American college sports in the 21st century has definitely been an asset for the NCAA, as it’s allowed them to market the sport successfully to mainstream America and has scored them lucrative television deals on CBS and TBS. Last year’s champions were the Louisville Cardinals, who defeated the Michigan Wolverines 82-76 at the Georgia Dome in Atlanta. It marked the 75th anniversary of the NCAA Men’s Division 1 Championship Tournament, and although last season may have history on its side, this season has significantly more cash at stake to the fans at home. The competition begins on March 18th, 2014, and will conclude with the final two teams playing the championship game on April 7th, 2014 in Arlington, Texas. Even President Barack Obama got in on the fun last year, and his attempt at the bracket is pictured below.
This isn’t the first time Buffet has put up his own money in a grand gamble. In 2003 he backed a Pepsi contest that involved the winning numbers on the inside of bottle caps, and when the time came for the winning number to be revealed, no one stepped forward. There was no winner, since the odds had been so astronomically stacked against the possibility of a winning number in the first place. Buffett kept his money and pocketed whatever premium Pepsi had paid him to come forward and participate in the first place.
A warning to anyone thinking that watching college basketball is going to be their path to riches: mathematically speaking, chances are this ‘March Madness’ bet is going to end up just like the Buffett-sponsored Pepsi contest. The odds of predicting a perfect bracket are approximately, according to the contest rules, 1 in 4,294,967,296. To put that into perspective, the odds of being struck by lightning in the United States are approximately 1 in 1,107,143. To his credit, Buffett does seem serious about writing the check if it comes down to it. “This will be the most fun. Just imagine if there’s one person left at the last game,” Buffett said. “I will go to that final game with him or her and I’ll have a check in my pocket…. I think we’ll be rooting for different teams.” The entire contest is great publicity for the NCAA, Quicken Loans, and Buffett himself, but the chances of someone guessing correctly all the way up until the final game is also, in itself, infinitesimally small. That being said, I know I’ll be filling a bracket out on the official site, as will many other people who have probably never watched an NCAA basketball game in their life. Be quick about it though, the contest is capped at 10 million participants, and registration opens on March 3rd.