How Much Does the NCAA Make Off the Tournament?
For the NCAA, college sports’ governing body, Christmas comes in March. In fact, just call the 12 game days of the men’s NCAA Tournament the 12 days of Christmas.
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That’s because it’s the season that keeps on giving for the NCAA, a billion-dollar organization that counts on the tournament, particularly its massive television contract, to pay the bills throughout the calendar year.
In the 2022 fiscal year, the organization took in revenues of $1.14 billion, according to USA Today, which reviewed the NCAA’s financial statement. That was down a touch from the record $1.16 billion in revenues in 2021, as reported Sportico. Of that amount, according to the business website, the NCAA can attribute more than 85% of that income to March Madness.
See more about the money behind March Madness.
TV Money Rules
The NCAA is a 67-game tournament featuring 68 teams from across the United States, from power conferences to small ones. Each game is televised, and the entire country gets to see all of the twists and turns, last-second miracle shots and, on occasion, David beating Goliath.
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It’s high drama, and broadcasters pay big money for the right to televise the games — and sell advertising to companies willing to dole out millions to spread their messages and share their products with fans.
In 2016, CBS and Turner Sports — the latter now a part of Warner Bros. Discovery — extended their contract to televise the tournament for another eight years. At the time, the existing contract had eight years remaining on it, meaning the broadcasters have locked up the television rights through 2032.
The existing contract — a 14-year deal signed in 2010 — pays the NCAA an average of about $770 million a year. When the new deal kicks in, that will rise to an average of $1.1 billion, the Associated Press reported.
Forty years ago, the TV revenue hit $16 million, Sportico reported. Adjusted for inflation, that’s $48.3 million in today’s money.
Other Tournament Revenue Streams
While TV rights fees for the NCAA Tournament are the cash cow, the organization also makes money through ticket sales from its 90 championship events across all sports and all levels, as well as corporate partnerships.
The NCAA has outsourced the exclusive rights to license “NCAA marks, tickets and taglines in commercial promotions” for its championships to CBS Sports and Turner Sports. Any business interested in becoming a corporate partner of the NCAA will negotiate with CBS and Turner. The two entities also can answer questions about advertising on NCAA.com and other digital platforms, according to the NCAA.
How Does the NCAA Spend the Tournament Money?
Since the tournament money makes up the bulk of the NCAA’s income, it pays to keep the organization’s share of college sports running, sharing the wealth across the Division I, II and III levels. The NCAA dishes out its revenues to support member schools, conferences and student-athletes at all levels.
About 60% goes back the member schools, Sportico reported.
The NCAA distributes its money this way:
Sports sponsorship and scholarship funds
Division I basketball performance fund
Division I championships
Student assistance fund
Student-athlete services and championship support
Division I equal conference fund
Academic enhancement and performance fund
Division II programs and services
Membership support services
Division III programs and services
Division I conference grants
Education programs
Supplemental Division I distribution
Funds also are put toward administrative costs, as well as other NCAA expenses, such as legal services and insurance.
The NCAA holds 90 championship events annually, and only five of them (all in Division I) generate enough money to pay the costs of the event: men’s basketball, men’s ice hockey, men’s lacrosse, wrestling and baseball.
Where’s the Football Money?
Surprisingly, the NCAA budget is built on basketball, not football. That’s because the College Football Playoff, which operates independently from the NCAA, negotiates the television contract for the college football semifinals and final.
While the current College Football Playoff involves four teams, it’s expanding to 12 teams by 2026. And Front Office Sports estimated the television package for the enhanced playoff could dwarf the NCAA Tournament contract and reach more than $2 billion per year.
Now, the College Football Playoff deal with ESPN is a reported $470 million a year. A bidding war between networks undoubtedly looms.
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This article originally appeared on GOBankingRates.com: How Much Does the NCAA Make Off the Tournament?
