Buffett backs $1 billion NCAA bracket contest
By Chris Isidore | 1/21/2014, 12:26 p.m.
Warren Buffett might be the epitome of the cautious investor, but he's betting $1 billion on this year's NCAA tournament.
Quicken Loans is offering a $1 billion prize to the basketball fan who submits the perfect NCAA bracket for this year's tournament. And the prize, if there is one, will be paid out by Buffett's Berkshire Hathaway,
The prize would be doled out over 40 years in annual payments of $25 million, or a lump-sum payment of $500 million. If there is more than one perfect bracket submitted, the winning entries will split the prizes.
Buffett would not disclose the premium that Quicken Loans is paying to Berkshire to cover the potential payout.
"Dan [Gilbert] says it is too much and I say it's too little," he told CNN's Poppy Harlow.
He added that if there is a contestant who has a chance for the prize when the final game is held on April 7 in Arlington, Texas, he plans on attending the game.
"I will invite him or her to be my guest at the final game and be there with a check in my pocket, but I will not be cheering for him or her to win," he said, jokingly. "I may even give them a little investment advice."
Entry in the pool is free.
There are more than 9 quintillion possible ways to fill out the 64-team bracket, according to the math and science site Orgtheory.net. That's 9 billion-trillion, or 9 followed by 18 zeros. That makes it a far longer shot than the one in 259 million odds of winning the grand prize in MegaMillions or the one in 175 million odds of winning Powerball's top prize.
But Buffett said that because winners in the tournament are not random, there's no real accurate way to calculate the actual odds of the perfect bracket.
"There is no perfect math...There are no true odds, no one really knows. I made a calculation," he said.
Quicken is also paying out $100,000 prizes to each of the 20 contestants who do the best in the brackets. And it is donating $1 million to inner-city Detroit and Cleveland non-profit organizations that are dedicated to improving the education of young residents. Buffett said he came up with the idea while getting a tour of Detroit from Gilbert in November and Gilbert quickly signed on to the idea.
Buffett backed a similar $1 billion prize from PepsiCo 11 years ago that involved numbers printed in the bottle caps of Pepsi products, and a monkey drawing the final numbers to see if anyone would collect the $1 billion prize. But, as is likely with this offer, no one ended up collecting that prize.
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