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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?

General view of a March Madness basketball falling through the net during NCAA Tournament First Four Practice at UD Arena.
Rick OsentoskiUSA TODAY Sports via Reuters Con

The concluding phase of the NCAA men’s basketball tournament, popularly referred to as March Madness, is entering its final stage.

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.

March Madness

  • Sixty-eight teams will participate in the 2024 NCAA Division I men’s basketball tournament, which starts with the First Four on Tuesday, 19 March.

  • March Madness has arrived and with that we’re taking a look at the this year’s tournament, who’s in and how the games line up.

  • As a college basketball fan, this is the best time of year. Look at this year’s favorite to win the NCAA’s National Championship.

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 annually broadcasts the tournament. It was extended in 2016 until 2032 for another $8.8 billion. About 90% of the earnings immediately go 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 create 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 more prominent conferences, this payout is a bonus. For the smaller, lesser-known conferences, it can be a major source of revenue. In 2014, the Washington Post reported that smaller conferences can still make around 20-25% of their income 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 divide the money and send it to their member schools. The smaller ones, however, need the money to cover their own expenses and then send what’s left to their member schools.

Besides the Basketball Performance Fund, the NCAA distributes some of the revenue into the Sports Scholarship Fund, allowing colleges to award athletes scholarships. After the 2022 March Madness tournament, the fund received $75.7 million. In addition, the Grants-in-Aid fund received $148 million last year, funding 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, allowing them to capitalize on their popularity.

Now, college athletes can earn money from endorsing local restaurants or big brands. The biggest stars could earn enough from 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 will 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. It still allows student-athletes to profit from their hard work and helps with the high expenses of studying at a university.