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How much does the NCAA make from March Madness? Where does the money go?

The college sports governing body generates and keeps almost all of its revenue from the annual Division I Men’s Basketball Tournament.

If you are a college basketball fan, you probably look forward to watching March Madness, the NCAA tournament, nicknamed the Big Dance.

The NCAA March Madness basketball tournament is responsible for most of the organization’s revenue. The governing body of college sports in the US pockets just under ten figures each year from the competition. Because the NCAA doesn’t control the College Football Playoff and the FBS bowls, they must rely strongly on what the D1 tournament can bring.

Most of the NCAA’s revenue comes from selling its TV rights and ticket sales. Unfortunately, when the COVID pandemic hit, they had to cancel the tournament, resulting in a revenue loss of around $800 million that year.

How much revenue does March Madness make for the NCAA?

In 2010, the NCAA signed a 14-year, $10.8bn TV rights deal with CBS Sports and Turner Broadcasting System. In 2016, that agreement was extended to 2032, with the networks committing to paying a further $8.8bn for the eight years added to the contract.

In 2021, the association made $1.16 billion, setting a record earning year; 85% of that came from March Madness.

Does the NCAA distribute the money back to the college programs?

The organization claims it distributes around 60% of its revenue back into college sports. Their distribution is made up of four parts.

  • Scholarship grants
  • March Madness performance payments
  • Championship expenses
  • Grants

The NCAA’s published accounts for 2019 and 2021 do not offer a breakdown of exactly how this revenue is shared out, but in 2016 the organization said the three chief areas money was distributed to were:

  • sponsorship and scholarship funds “to help fund NCAA sports and provide scholarships for college athletes”: $222m
  • a basketball performance fund consisting of prize money distributed to each Division I conference based on its’ teams’ results in March Madness over six years: $168.8m
  • general financial support for the 26 men’s and women’s championships in Division I across 24 sports: $153.8m

The NCAA said $924.1m was spent on prize money and financial assistance in 2016, with just over $100m used for “other association-wide expenses” and “general and administrative expenses.”

It’s worth noting that, as a registered non-profit organization, the NCAA is exempt from federal income taxes.