Warren Buffett is the second-richest man in America and by all accounts an investor whose savvy is both legendary and transcendent.
So would this individual, carrying a net worth of some $60 billion, really risk tossing away a mere billion to a knowledgeable (and incredibly lucky) sports fan?
According to Forbes, he’s likely going to make up the cash in no time, if he hasn’t already.
But before we start strategizing over the motives of Omaha’s most identifiable figure, let’s make one point clear - he really can’t lose.
It’s about as close to impossible as something can be without actually being impossible. And even then, that point’s debatable.
“The odds are absolutely astronomical,” said Daniel Ostrov, a professor of applied mathematics at Santa Clara University who also teaches statistics.
Ostrov does not use the word ‘astronomical’ lightly.
“Say you have a blue penny and you put it into a stack of pennies,” he gently explained. “And that stack of pennies goes from the sun to as far as Pluto gets from the sun, and then the stack comes back to the sun. And then you repeat that 500 times.
The chance that you will pull the blue penny from that gargantuan stack of pennies is actually higher than beating the published odds for the ‘Billion Dollar Bracket Challenge.’”
Feeling a little less optimistic about your chances?
Ostrov adds that if we go back to the formation of the universe - some 13.8 billion years ago - and you filled out one bracket every second from then until present day, you’d have less than a 5 percent chance of actually striking the jackpot.
Aspiring billionaires’ fears were confirmed Friday evening, when Yahoo tweeted that all previously perfect brackets were, in fact, busted (Duke’s upset loss to Mercer probably didn’t help).
But according to one Bay Area branding and business consultant, this contest was never really about the $1 billion giveaway, anyway - certainly not to sponsors and organizers.
“It doesn’t matter if people win,” explained Dr. David Mitroff, a marketing expert who founded Oakland-based Piedmont Avenue Consulting.
“What they’re doing is saying, ‘Hi, would you like to win a billion dollars? Sign up here,’” Mitroff said. “Versus saying, ‘Would you like to buy our stuff?’ That’s not as nice and it’s considered spam. But if I send you an email and say would you like to come to my event, you feel good, and in fact you might even owe me something even if you don’t come.”
Undoubtedly, Billion Dollar Bracket challenge players ended up providing something of value to the corporate sponsors and Mr. Buffett: Information.
Yahoo, who exclusively ran the platform for the contest, signed-up whatever percentage of the 15 million contestants who did not previously have a Yahoo account.
Do you think that might present some financial opportunities for the Sunnyvale company?
“Yahoo is definitely going to gain from this,” Mitroff observed. “They’re going to gain market share, they’re going to get people excited about [the event]. And guess what they’re going to start doing? They’re going to say, ‘Hey, basketball just ended, but baseball’s just starting. You should do baseball!’"
Mitroff also highlighted Yahoo’s potential revenue gain from advertisements appearing on the contest’s pages, targeted specifically to sports fans and highly sought-after demographics.
Quicken Loans, the event’s main sponsor and the fourth-largest mortgage-lender in the U.S., didn’t make it out badly, either.
Anyone who wanted to participate in the challenge answered questions regarding the status of their home and current mortgage, providing the company with a treasure trove of personal data.
“Even if they [Quicken] don’t follow up, they’re starting to get trends in certain markets,” Mitroff said. “They’re starting to collect data, BIG DATA, and with that data they can analyze all kinds of things.”
We contacted Quicken Loans to learn how they plan to use the consumer information they’ve acquired and where their financial liability stands for the challenge.
“We’re still awarding $100,000 to the top 20 most accurate brackets, $2 million total,” said company spokesperson Jordan Fyolenko via email.
He told NBC Bay Area that Quicken will also be making a $1 million donation to education-based charities in Detroit and Cleveland.
“Quicken Loans is not disclosing the terms of the insurance policy it purchased from Berkshire Hathaway,” he added, which now appears irrelevant.
He said the mountain of mortgage-related data “will be used in an aggregate form to provide a clearer picture of the audience for the contest and allow us to tailor fun opportunities like this in the future.”
Yahoo did not respond to our request for an interview.
As for Mr. Buffett (who is now safely off the hook for $1 billion), what’s his incentive?
Mitroff said he’s officially opened the door to a whole new wave of future workers and investors, such as college students and sports fans, who previously didn’t know much about him or his brand.
“Any time he does things like this, people Google him and go, ‘Who is Warren Buffett, why does he have that money?” Mitroff said. “And then they learn about his companies, they get excited and think, maybe I should invest in his companies because he’s fun and he’s exciting.”
After a pause, he smiled and concluded, “I mean, it’s brilliant.”