Warren Buffett's $1M March Madness bracket challenge, explained

Billionaire investor Warren Buffett’s annual March Madness bracket challenge is back this year, offering $1 million a year for life  to any Berkshire Hathaway employee who can correctly predict every team that earns a spot in the "Sweet 16" at the NCAA men’s basketball tournament.

The long-running challenge is only open to Berkshire Hathaway’s roughly 400,000 employees. While roughly 100,000 employees have participated in past years, signups for the free-to-enter event are up significantly this March, a company representative told FOX Business.

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The odds of correctly predicting the entire "Sweet 16" field are extremely long. Last year, none of the 17.3 million brackets submitted to ESPN’s Tournament Challenge got all 16 teams right, the network said.

To make up for the long odds, Buffett offers a $100,000 consolation prize to the employee with the top-performing bracket through the tournament’s first two rounds. Eight Berkshire Hathaway employees split the $100,000 prize last year, according to the Omaha World-Herald.

Buffett’s NCAA tournament challenge may seem like potential distraction in the workplace, but career services expert Andrew Challenge of the firm Challenger, Gray and Christmas told FOX Business last year that the office pool is a great way to motivate employees.

"Obviously, many employers do not have the financial resources of Warren Buffett, but recognizing March Madness and the fun surrounding the tournament is an excellent way to foster comradery and morale among colleagues," Challenger said. "Additionally, many companies are scrambling to find skilled workers right now, and the way a company embraces March Madness could be a way to attract talent."

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The NCAA men’s basketball tournament’s round of 64 begins on Thursday.