MARCH MADNESS 2023
How much money do schools get for going to the NCAA March Madness tournament?
March Madness brings in billions of dollars in revenue every year and is watched by millions of people. But how much do the schools actually make?
The concluding phase of the NCAA men’s basketball tournament, popularly referred to as March Madness, is into its final stage. Just four teams remain, setting us up with San Diego State vs Florida Atlantic and UConn vs Miami. Few predicted it, but there’s plenty of money behind it all.
This event is the primary cash cow for the NCAA, attracting millions of viewers and generating billions of dollars in revenue annually. In the 2021-22 academic year, the NCAA raked in $1.15 billion in revenue, with the tournament accounting for nearly 90% of the entire amount.
How much of March Madness money goes to universities?
In 2010, the NCAA signed a 14-year, $10.8 billion contract with CBS Sports and Turner Broadcasting, which broadcasts the tournament every year. It was extended in 2016 until 2032 for another $8.8 billion. About 90% of the earnings immediately goes to the universities.
How is the March Madness money divided?
Of the 68 teams that play in the tournament from the start, the respective conferences will have a “Basketball Performance Fund”, which was around $170 million last year. For each game played, each team’s conference will get a payout based on its performance over a six-year rolling period with “units” distributed for its participation. A unit’s value will rise by 3% every year. If a team makes it to the final, they can make as many as five units. According to Sportico, a unit was worth $337,141 in 2021. In 2022, $169.4 million was paid out from the performance fund.
For the bigger conferences, this payout is a bonus. For the smaller, lesser-known conferences, it can account for a major source of their revenue. In 2014, the Washington Post reported that smaller conferences can still make around 20-25% of their total revenue from the March Madness tournament, even if they don’t make a deep run.
The NCAA urges the conference to distribute the earnings equally to the schools, but it is not a requirement. Typically, the bigger conferences will divide the money and send it to its member schools. The smaller ones, however, need the money to cover their own expenses, and then will send what’s left to its member schools.
Besides the Basketball Performance Fund, the NCAA also distributes some of the revenue into the Sports Scholarship Fund, which allows colleges to award scholarships to athletes. After the 2022 March Madness tournament, the fund received $75.7 million. In addition, the Grants-in-Aid fund received $148 million last year, providing funding to student and sports programs. What the NCAA keeps goes to administrative salaries and funding for other sports tournaments.
Do the players make any money from March Madness?
While college athletes have always been forbidden to earn money from playing college sports, in 2022, a rule change allowed players in NCAA sports to sign endorsement deals, which would permit them to capitalize on their popularity.
Now, college athletes can earn money from endorsing local restaurants or big brands. The biggest of the stars could earn enough off of their name, image, and likeness to pay for part of their tuition and other college expenses not covered by scholarships. Of course, not every athlete is going to get rich from this change. In February 2022, the average amount earned by student athletes in Division 1 schools was $561 through the end of the month. Even still, it gives student athletes an opportunity to profit from their hard work and helps out with the high expenses of studying at a university.