FORTUNE — Warren Buffett’s love of baseball has been well documented. He sprinkles letters to shareholders with baseball analogies. A glass-encased pitcher’s glove is one of the most prominent items in his spare office. And he’s thrown many a minor league opening pitch in Omaha.
But this season, it’s the legendary investor’s basketball fandom that’s making headlines. Buffett is partnering with Detroit-based Quicken Loans and Yahoo Sports to offer a billion-dollar prize to any contestant who predicts the winners of every game in this year’s NCAA men’s basketball tournament. Buffett has basketball history, too: He attended a game in 2008 with Bill Gates and rapper Ludacris. He befriended NBA star LeBron James, even offering investment advice. He’s horsed around in the Harlem Globetrotters locker room. And earlier this month, he showed up at a Nebraska court sporting temporary face tattoos of Omaha’s Creighton University Bluejays insignia. This year, the team is seeded no. 3.
Chalk it up to characteristic good timing. The Omahan’s billion-dollar basketball bracket happens to kick off in arguably the best college basketball season in Nebraska ever. Both the University of Nebraska and Creighton are in the tournament. “Do whatever you need to do to get to a TV on Friday,” wrote one local sports columnist. “Because glory days don’t last forever. Those days are now.” Not sure what he means? Witness Doug McDermott, the Creighton University senior who earlier this month become the eighth player in Division I history to score more 3,000 points, topping even the legendary Larry Bird.
Buffett won’t comment on the specifics of his bracket, but he did take photos with McDermott after the forward scored a career high of 45 points in a single game. Buffett also told CNBC that he had picked Creighton to go all the way.
The billion-dollar contest closes to new entries on Thursday at 1 a.m. Eastern time (midnight in Omaha). The winner, whomever picks a flawless bracket, will take home $1 billion in $25 million chunks for 40 years, or $500 million all at once. Of course, it’s highly unlikely that there will be a winner (outside of the 20 most accurate brackets which will earn $100,000 each). The official odds of taking home the grand prize are one in 9.2 quintillion. Because brackets are not random, others have pegged them lower than that — around one in 7.4 billion — still not a great bet.
It is, however, a pretty good deal for the companies involved — Yahoo Sports, Berkshire Hathaway and Quicken Loans.
In exchange for putting on the contest and handing out the prize, Quicken Loans is paying Berkshire to insure against the possibility someone wins. Neither party is divulging how much the policy cost, but Buffett has said $10 million was at least in the ballpark. Yahoo is the technology provider. The upside here for Yahoo is that you have to create an account to enter. And the upside for Quicken Loans is that they get to ask millions of people if they would like to speak to an agent about refinancing. The company also gets priceless earned media. Quicken Loans founder Dan Gilbert, who also owns the Cleveland Cavaliers, has made the talk show rounds alongside Buffett in recent days.
The seemingly unlikely partnership between Berkshire Hathaway and Quicken Loans came about when Buffett took a tour of Detroit with Gilbert in November. Gilbert has been an aggressive supporter of Detroit, buying and refurbishing city property by the block. Gilbert signed onto the Buffett-backed Giving Pledge, effectively agreeing to give away half his wealth to charity. (He’ll also donate $1 million as part of the bracket challenge.) Today, the two men are friends. Buffett floated the idea of the bracket just as Gilbert wound down his Detroit tour, which Fortune tagged along for. Gilbert was immediately interested.
“The only condition I’ve got is that I’ve got to have all the entries ahead of time,” Buffett told Gilbert in November. He joked that for security reasons, before the games started, he’d get the entries printed out.
“That’s the only way to do it,” Gilbert replied.
“And I sleep on the printouts,” Buffett said.
Unless someone does manage to effectively cheat the system, and that only seems slightly more likely than someone making a perfect bracket, hosting the contest makes sense for both Buffett and Gilbert. There’s the publicity, the data from entrants, and — for longtime sports fans — the fun. Actually, it makes significantly more sense than picking Creighton as NCAA champion. But then again, there’s always a chance an underdog will beat the odds.