March Madness is the best-known college sporting event on the calendar. But what does it make in revenue for the NCAA, the participating schools, and TV networks?
Wondering how much money March Madness makes? Well, for fans it’s the center of the college basketball universe.
The regular season has its moments, to be sure. Rivalries, top teams squaring off in non-conference matchups, races for conference titles – they keep fans of the edge of their seats from November to February.
But when March rolls around, the ‘reason for the season’ becomes clear as 68 teams square off in single-elimination fashion for the title of National Champion.
And as much as fans enjoy it, it’s even more pivotal to one entity – the NCAA.
How Much Does the NCAA Make From March Madness?
There’s no two ways about it – March Madness makes or breaks the NCAA.
The figures vary year to year, but the most reliable and recent numbers indicate that in 2021, the NCAA made $1.15 billion in total – and about 86% of that figure came from March Madness.
Sounds like a lot, right? Remember, the NCAA doesn’t control the College Football Playoff or even bowl games. That leaves basketball as – by far – its most profitable sport. Best believe the NCAA makes the most of March Madness.
Where Does the NCAA Makes Its Money?
Where does the money come from? There are a couple main sources:
- Ticket sales
- TV/media rights
- Corporate sponsorships
The biggest piece of the pie is the TV/media rights. Back in 2010, the NCAA signed a 14-year contract with CBS Sports and Turner for $10.8 billion to carry the Tournament. This deal was expanded for an additional eight years and $8.8 billion to keep the Tournament on the networks until 2032.
This means starting in 2025, March Madness will make the NCAA over $1 billion per year on TV rights alone.
Ticket sales generate in the neighborhood of $125 million to $150 million. Corporate sponsorships make up a variable amount based on the size of those sponsorships and how many sell.
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How Much Do TV Networks Make from Ad Revenue?
Each year, a couple of commercials dominate the airwaves during March Madness. The Capital One commercials with Charles Barkley and Samuel L. Jackson are one example. And the past few years, Lily from AT&T has gotten more airtime than Coach K during the month of March.
As you can probably imagine, there’s a good reason for all this as well. With 67 basketball games across four different networks, CBS and Turner have plenty of ad time to sell. The big advertisers buy up the bulk of it.
Last year was a particularly strong one in the March Madness advertising games, as it followed two years of pandemic-affected Tournaments.
The networks sold out their entire inventory of advertisements more than a week in advance of last year’s Tournament. While the ad costs aren’t quite at Super Bowl levels, advertisers shelled out a couple hundred thousand dollars for 30 seconds during the early rounds. This marks up to well over $1 million per ad for the Final Four and championship game.
In total, the 2022 figure added up to a little over $1 billion in ad revenue for the participating TV networks (CBS, TBS, TNT, and TruTV).
There’s no question that the appetite for commercial time will remain strong in the future. Get ready to see your favorite advertisers throughout the month of March!
How Much Do the Schools Make From March Madness?
The NCAA says they reinvest 90% of the money made during March Madness directly into their participating institutions or member schools.
This is done in the form of scholarship funds and sponsorship opportunities “to help fund college sports and pay for scholarships for college athletes”. Additionally, a large portion of the revenue goes to over two dozen other NCAA championships in non-revenue sports.
Let’s face it, not every college sport represents the cash cow March Madness does. The NCAA needs a way to pay for those championships.
But perhaps most interesting is the prize money distribution that results from the… well, results of each year’s March Madness Tournament.
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Known simply as the Basketball Performance Fund, it was the source of about $170 million in payments during 2022. But a couple interesting points about the Fund:
- It’s the only system in college sports that assigns a monetary value to athletic performance.
- It disperses funds to conferences, not teams or universities.
68 teams make the Tournament each year. Each of these teams’ conferences get at least some piece of the money in the fund.
Of course, the majority of conferences get one team and one team only into March Madness, while power conferences like the SEC or Big 10 are routinely placing half-a-dozen (or more) teams into the Tournament each year. So when it comes to the amounts of each conference’s dispersal, one size does not fit all.
How Do College Schools Get Paid During March Madness?
For each game a team plays, its conference gets a payout whose amount is determined by the conference’s performance in March Madness over a six-year rolling period.
Here’s an attempt to make this simple: each game played earns the conference a ‘unit’, which was worth about $337K in the 2022 Tournament. However, these schools were still earning money based on results back as far as 2017 (thanks to the six-year rolling period.)
So let’s take St Peter’s, the darlings of last year’s Tournament. The Peacocks played in four games, earning roughly $1.34 million in ‘units’ for the Metro Atlantic Athletic Conference (MAAC.)
But with the six-year rolling period, the MAAC should get paid for those games through 2028 (in addition to any other games the conference plays in the meantime.) By the time all is said and done, St. Peter’s run will be worth about $8 million to the MAAC.
Does Each Team Share the Money from March Madness?
This is somewhat comical, but the official word is that the NCAA ‘urges’ conferences to divide up the funds between its member schools.
So in the NCAA’s world, when Kansas won last year’s Tournament, each Big 12 school would see an equal cut of the $1.68 million or so that performance means to the conference each year until 2028.
But that’s all they do is ‘urge’ the conferences to do this. And it’s hard to quantify which schools are doing what. Does the Big 12 cut that money evenly? Or does Kansas get a little more as the school that earned the performance bonus?
In addition, different conferences have different budgets based on any number of factors. In other words, if St. Peter’s earns $1.34 million for the MAAC while Michigan earns $1.34 million for the Big 10. You can bet those figures will have vastly differing impacts on the respective conferences’ budgets.
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In a smaller conference like the MAAC, those funds are likely to be used towards covering the conference’s own expenses – including those championships we discussed in non-revenue sports. After that, the member schools get their piece of the pie.
In a conference like the Big 10, with its own $7 billion TV deal… well, we certainly hope all that money goes to the member schools!
Do the Players Get Paid in March Madness?
For decades, the biggest gripe was that the NCAA made all this money from March Madness with none of it going to the athletes.
These days, name, image, and likeness (NIL) rights take care of a piece of that, but it’s not directly tied to March Madness performance.
Of course, the average NIL deal at a school like Duke or Kentucky is probably more valuable due to those schools’ consistently strong March Madness performances, so it all has an impact. But there remains no direct compensation for March Madness players.
March Madness is the NCAA’s biggest event each year, and it pays out as such. The Super Bowl, the World Series… no other event means as much to the bottom line for its operating organization as March Madness does to the NCAA!
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