The national college level basketball tournament has spread “March Madness” from shore to shore. The National Collegiate Athletic Association (NCAA) Men's Division I Basketball Tournament has gained popularity of the past decade and is now the biggest modern sporting event in the U.S. Goes without saying; the championship is also a money-spinner for media networks (TV, digital and social media) and advertisers, attracting billions of revenues in three weeks.

Media on the Roll

The two TV media conglomerates – CBS Corporation (CBS - Analyst Report) and Turner Broadcasting System, a subsidiary of Time Warner (TWX - Analyst Report) – collectively scored highest revenues from this event in the past and are expected to keep the trend this year by broadcasting through four different networks – CBS, TNT, TBS, and truTV (see: All the Consumer Discretionary ETFs here).

As per Kantar Media, the NCAA championship generated about $7.5 billion in total advertising revenues from television since 2005. Last year, annual revenues from the event came at $1.5 billion, up 1.5% from 2013 and 136.8% over the 14-year period.

Several radio and online channels, such as, cbssports.com, ncaa.com, espn.com, and si.com, will also broadcast the Big Dance. Apart from these, NCAA March Madness Live offers online streaming videos on an online HDTV channel and mobile apps. Dish Network (DISH - Analyst Report) recently launched a new online streaming service, Sling TV, which bundles live programming, sports with ESPN, and news with CNN for $20 per month.

Further, social media sites like Facebook (FB - Analyst Report), You Tube (GOOGL), Twitter (TWTR - Analyst Report), and Snapchat are attracting fans to their respective platforms via media deals with the NCAA or Turner Sports.

How to Play

As the tournament is a high-seeded top-line driver for media and networking players, investors can basket some gains with a diversified approach to ETFs. Any of the products mentioned below could make for an exciting March Madness play given that these have a favorable Zacks Rank of 3 or ‘Hold’ rating and have exposure to fan frenzy.

PowerShares Dynamic Media Portfolio (PBS - ETF report)

This fund tracks the Dynamic Media Intellidex Index and seeks to offer capital appreciation by investing in the companies that are selected on a variety of investment merit criteria, including price momentum, earnings momentum, quality, management action and value. This approach results in a small basket of 30 media stocks, which are somewhat concentrated on its top 10 firms with nearly half of the portfolio. TWX, FB and DISH are among the top 10 holdings and make up for nearly 5% share each (read: Follow Billionaire Investing Strategies with These ETFs).

Within the media sector, about one-fourth of the portfolio is allotted to cable & satellite while publishing, Internet & mobile applications and movies & entertainments round off the next three spots with double-digit exposure each. The product has amassed $144.5 million in its asset base while trades in solid volume of about 73,000 shares a day. The ETF charges 62 bps in annual fees and added nearly 2% over the past five days.

Global X Social Media Index ETF (SOCL - ETF report)

This fund provides exposure to the companies involved in the social media industry, including social networking, file sharing, and other Web-based media applications by tracking the Solactive Social Media Index. It holds 31 securities in its basket with double-digit concentration on the top three firms – Linkedin (LNKD), Tencent Holdings (TCEHY) and Facebook. Other firms hold less than 5.75% share (read: Should You Buy Social Media ETF on Solid LNKD,TWTR Earnings?).

In terms of country exposure, U.S. firms take more than half of the portfolio, followed by China (27%) and Japan (7%). The fund has $90.6 million in AUM and average daily volume of about 134,000 shares. Expense ratio came in at 0.65%. The ETF gained more nearly 4.6% over the past five trading days.

PowerShares Dynamic Leisure and Entertainment Fund (PEJ - ETF report)

This fund follows the Dynamic Leisure and Entertainment Intellidex Index and holds a small basket of 30 US leisure and entertainment companies. With AUM of $193.9 million, the product is pretty well spread out across various securities as the top 10 holdings account for nearly 46.4% of the total assets.

In terms of industrial exposure, restaurants and airlines take the top two spots with nearly one-third share each while hotels & leisure facilities, and movies & entertainments round off the top four. The fund trades in lower volume of 39,000 shares while charges 63 bps in fees per year from investors. PEJ added 3.1% over the past five sessions.



Bottom Line

The products have been marching higher over the past few days, crushing the broad market fund (SPY - ETF report) by wide margins. This trend is likely to continue given the March Madness frenzy and the huge revenue generation scope for the media and advertisers.