Monday Notebook: Where The NCAA Tourney Money Goes And The Myth About That

Villanova v Kansas

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There's a good chance before the first games begin Thursday you will read, be told and watch someone say how the NCAA makes billions on this tournament and players get nothing. The picture painted over the years makes it appear that the big bad evil group that oversees college sports just pockets the money and spends it on 5-star hotels for its rich officers and the real attraction, the players, get nothing.

If it was only true. Don't get me wrong, it's possible the NCAA could set aside money from each tournament to go to players but how much and how would you distribute that? Does everyone get an equal amount? Do we pay players whose team advances in the tournament more? Do you really want a player making or missing a shot that could be worth tens of thousands of dollars? Why are we only paying players on teams who made the tournament? Are we going to pay teams who lost 13 games just because a group of people sitting in a room thought they were worthy of an at-large bid?

Some of you are screaming yes to all those questions and that's fine. There may be a day when players do get money but I don't know how and when that will happen. But I do know and believe that most fans think the NCAA just keeps all the cash from this event and that couldn't be further from the truth.

In 2021, the NCAA made a record $1.6B and more than 85% of that came from the NCAA Tournament. That means about $1.3B came from the men's basketball tournament. 

What about football? What about it? The NCAA has nothing to do with the College Football Playoff and nothing to do with the bowl system. They make no money on those events and every conference has their own media deal. So the NCAA makes no money on the FBS(Football Bowl Subdivision). If you are wondering why this is, it's because of the structure of the sport. The NCAA doesn't sell media rights for football and it was the conferences who created the playoff. While the NCAA sets policies for football, they do not make any money off the sport.

For the men's basketball tournament, the NCAA controls the media rights and negotiates its TV deal. In April of 2016, the NCAA extended its deal to have games air on CBS, TBS, TNT and TruTV through 2032 for $8.8B. That will end up looking like an ACC deal because it will be outdated, if it's not already. This is one reason I think you will see the tournament expand to 80, 90 or 96 teams in the next five years. There is too much money to be made with an expanded tournament and in the end it's always about the money.

In addition, the NCAA makes money off of sponsorships and ticket sales as well- which totals over $250M per year.

But back to the question of where all that money the NCAA makes from. For starters, if you make the NCAA Basketball tournament, the NCAA pays for basically everything- travel, lodging, food and other expenses- for every team in the tournament as long as they play, That means charter flights for every team- even 16th seeds(note: the charter flights for all applies if a team travels 400 miles or more to their regional site. Charleston is 380 miles from Orlando and would be offered expenses for a bus but will pay for the charter to Orlando on their own). Oh, and this one you likely don't know, the NCAA pays for travel, lodging and food and other expenses for teams/players in all sports for their tournaments as well. Yes, that means, soccer, volleyball, track, baseball, softball, gymnastics, lacrosse, field hockey and any other sport the NCAA sanctions a championship in.

But that is a portion of the money spent by the NCAA each year that comes from the Big Dance.

Here are few other places where that money goes: 

--more than $250M per year to help fund sports and scholarships

--more than $180M per year that goes back to participating teams from the tournament

--almost $100M to the athlete assistance fund

--more than $70M in athlete services that include catastrophic insurance, post-graduate scholarship programs, drug testing and other athlete services

--over $60M gets distributed back to conferences

--there also funds set aside annually for Division II and Division III

--and there is a student academic fund that pays schools with good academic standing

And yes, the NCAA takes a portion of the annual money made to cover its operational budget and a legal budget- which has been used a lot in the most recent years.

There are more than 90 NCAA Championships in all divisions and do you know how many actually make more than they cost? You might guess half? How about a third? Well, try guessing less than 10. When you add in the expenses the NCAA covers that we mentioned above very few championships make money. Men's Basketball, men's ice hockey, men's lacrosse, men's wrestling and baseball make a profit when it comes to their championships. Women's softball is getting there because of the huge success in recent years at their World Series but expenses for the entire tournament are high.

But back to the narrative that you will hear this week and how can the NCAA make all this money and the players get nothing. Most people who write about that always leave out where the money goes because it doesn't fit the tale they want to tell. 

We now live in a pay-for-play/Name Image and Likeness world and players can make money during the tournament, and some will. And I say good for them. Gonzaga's Drew Timme came back for another season and he has said his NIL deals were a big reason. Nothing stops Timme from cutting deals for companies as he begins another tournament run.

But why not pay the players? Heck, you could pay 1% of revenue from the tournament to players from all teams. It would be about $10,000 per player. But again, it's not that simple. If we want to have that talk and come up with a system I am all ears.

My point here is to remind people that the NCAA does not pocket the profits and give fat raises to all officers at their headquarters. They spend about 90+% of all revenue on the items I mentioned above. The system is not perfect but they do pay for a lot of things that don't make money. 

So enjoy the tournament, but the next time someone says the NCAA makes billions and the players get nothing, now you have an idea where that money goes...

Final note: Oregon beat Ohio State 46-33 to win the first NCAA Basketball Championship in 1939.

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