Buffett’s Billions

With all the talk of Peyton Manning yelling Omaha! Omaha! at the line of scrimmage over the past month, it occurs that maybe he was just paying homage to Warren Buffett, who last month offered one billion dollars to the person could pick the perfect bracket in next month’s March Madness.  Warren Buffet has billions upon billions with which to take chances like this, and a fondness for offering up a sucker bet.  In 2000, Buffett insured a bet that no one could randomly pick the same 7 numbers out of 77 that a monkey would randomly grab. In a nod to irony, that contest was inspired by Grab.com.  Basically, he bet people a fortune they couldn’t win at Keno. No shit, nobody wins at Keno that’s why you can insure it.

The math takes 2 to the 32nd power because of the number of possible outcomes from the initial field of 64.  This means the odds of someone picking all of the potential outcomes is so small (1 in 4.3 billion) that Warren Buffet can insure against the probability of payoff. However with a billion dollars at stake, active minds might contemplate ways of massaging the outcomes for more favorable odds.  As I am transplanted in Chicago and immersed in its history, and having seen the movie “Eight Men Out” a few dozen times, I immediately think of the Black Sox scandal of 1919 when the White Sox threw the World Series on behalf of “Boardwalk Empire” character Arnold Rothstein. Rothstein paid just a few players on the Sox $10,000 to affect the outcomes of games. Eddie Cicott was the star pitcher and the focal point of both that movie and the real world investigation by Commissioner Landis.

And so, invoking history merely as a cultural reference point and suspending disbelief, suppose Mr. Rothstein were to pay off just about everyone to take Mr. Buffett’s money.  March Madness starts with 64 teams (Buffett’s offer does not include the entry games) with five starters each, so this suggests 340 players will start the tournament.  Rothstein could pay half the teams’ starting players to lose the first round, or 170 paid players.  He could pay each team’s full 12-man roster, but it’s safe to say that the losing team isn’t going to go to the bench for help.   Each of the 170 could be paid $250,000 to lose, which comes to $42.5 million to eliminate the first round’s losing 32 teams.  To eliminate the next 16, then 8, then 4 then 2 and finally 1 would cost an additional $38.75 million.  So, to control each outcome, which is to have eliminated 63 teams, would cost $81.25 million to give each losing team’s 5 starters $250,000 to lose.

Yeah, yeah. There are assumptive and behavioral holes galore in this ridiculous exercise.  But I wonder how many ways people have considered improving their odds of taking $1 billion from Mr. Buffett’s outstretch hands.

Now I’m a complete moron who did terrible in math (and obviously didn’t take a classes in logic and social behavior) but I know that the law of large numbers in this instance is about criminal motivation.

As for the winning team’s players?  They get a trophy, 7 cutaway pieces of net, and the pride that goes with winning a sure thing.  All other starting players got $250,000.  Rothstein would have netted over $900 million on an $81 million bet.  A lot of people would have won for losing.  Of course, the story would only begin there, Mr. Rothstein.  But your place, like your winnings, would be only magnified in history.