NCAA Tournament payouts: the ins and outs

Will Stewart, TechSideline.com, on April 4, 2014
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How does the NCAA pay money out to conferences based on NCAA Tournament performances? And how does that compare to bowl game revenue?

How the NCAA calculates Tournament payouts

That answer for NCAA Tournament payouts is actually pretty easy to find, if you know the right search terms to Google. If you hit on the right ones, you’ll be served up a link to the NCAA’s 2013-14 Division 1 Revenue Distribution Plan.

The RDP, as we’ll call it, is a PDF document that is a mere 23 pages long, and unlike the NCAA’s rule books, is written in plain English. Jump forward to page 7, and you’ll find three pages on the “Basketball Fund” and its distribution to member schools.

(Note: Every figure given for Tournament payouts from here on is calculated from the NCAA revenue distribution document linked above.)

Here are the highlights:

  • The basketball fund consists of monetary “units” paid out by the NCAA to conferences, based on the performance of schools in the NCAA Tournament over a six-year rolling period.
  • One unit is awarded to each school participating in each game, except the championship game.
  • Units are retained by the conference in which they are earned.
  • In 2014, each basketball unit will be worth approximately $250,100 (and a total of $193.58 million will be distributed).
  • Payouts for 2014 will occur this month (April) and will cover the six-year period of 2008-2013.

So for example, in 2008, the ACC received four bids, and those teams played in a total of ten games, going 6-4. This earned the ACC ten units for 2008.

In 2009, the ACC received seven bids, and those teams went 9-6, for a total of 15 games played. However, one of those games was UNC appearing in the championship game against Michigan State, so that one doesn’t count for the ACC, and they earned 14 units instead of 15.

And so forth. You total up the units the ACC earned in the six tourneys from 2008-2013, and it comes out to 70 units (per my calculations). This year, the ACC will be paid about $250,100 for each of those 70 units, for a total payout of $17,507,000.

Each year, the value of the individual units increases (so far, anyway). In various Google searches, I found that following unit values for recent years:

NCAA Tournament Money Unit Values and Total Payouts to all Conferences:
2011: $239,664 ($180.5 million)
2012: $242,204 ($184.1 million)
2013: $245,500 ($188.3 million)
2014: $250,100 ($193.6 million)

So the real question everyone who reads this site is asking is … how is the ACC doing versus other conferences?

The answer: meh. Historically, the ACC is viewed as the best basketball conference in the country, whatever that means, but in terms of NCAA Tournament payouts in recent years, not so much.

The ACC compared to other Power 5 conferences

First, a point of clarification: note that “units are retained by the conference in which they are earned.” This means, for example, that although Syracuse is in the ACC now, none of the units they earned while they were in the Big East from 2008-2013 will be paid to the ACC. Those units will be paid to the new Big East and the American Athletic Conference, per whatever agreement those two conferences came to in their recent split-up and realignment. Only units that Syracuse earns from 2014 onward will be paid to the ACC.

This means that in the short term, expansion comes at a price. This year, the ACC is being paid units earned by their 12-team conference from 2008-2013 … but once the check is received, the ACC will split it among 15 teams, now that Syracuse, Pitt and Notre Dame are members. (This assumes the ACC doesn’t have some sort of phase-in plan for new schools.)

The Big 12 is in the opposite situation; some of their tournament units were earned by a 12-team conference. Now those units are being distributed among the current ten members.

And don’t even get me started on the Big East and the A…A…C. That’s a separate article.

In terms of total dollars, the Big East/A…A…C is getting paid monstrous amounts of money, because they had a lot of teams in their conference in recent years, and those teams did well. For example, the Big East earned 11 bids in 2011 and earned a whopping 23 units in one year.

But the Big East and A…A…C are not going to be included in the rest of the discussion, because I’m just going to compare the ACC to the other four conferences in what is now termed the Power 5: the Big 12, BIG, SEC, and PAC-12. Those are the conferences against which the ACC is measuring itself in the current landscape of college athletics.

So, how’s the ACC doing?

Total Payouts

The NCAA hasn’t released 2014 payout figures yet, but you can calculate them, based on historical tourney data from 2008-2013 and the NCAA’s figure of $250,100 per unit this year. Here are the numbers for 2014:

2014 NCAA Tournament Revenue Sharing Figures
ACC
Big 12
B1G
SEC
PAC-12
6-year total units (2008-13)
70
82
91
55
54
Total payout
$17,507,000
$20,508,200
$22,759,100
$13,755,500
$13,505,400
# teams
15
10
12
14
12
Per-team payout
$1,167,133
$2,050,820
$1,896,592
$982,536
$1,125,450
Source for payout information: NCAA 2013-14 Division 1 Revenue Distribution Plan

That’s not great for the ACC. In terms of total payout this year, the ACC is a solid third among the Power 5 conferences. On a per-team basis, the ACC is barely in third, and is far behind the Big 12 and the B1G.

This has been a trend in recent years. The NCAA publishes historical data back to 2008, and when you combine that with my 2014 calculations, you get the total figures for the last seven years:

NCAA Tournament revenue sharing totals, 2008-2014:
Big 12: $127.8 million
B1G: $122.5 million
ACC: $120.7 million
SEC: $106.2 million
PAC-12: $100.9 million

Again, that’s a solid third place for the ACC … but, it’s third, nowhere near first. (The Big East/A…A…C teams, by the way, brought in $170.9 million total over that seven-year period.)

I won’t delve into calculating the per-team average take over that seven-year period, but if I did, it wouldn’t make the ACC look any better. The ACC has been at least a 12-team league, as big or bigger than all those other conferences, and of course, the ACC has expanded to 15 teams this year, larger than any of those other conferences. So the per-team take would be worse, not better.

Comparing NCAA Tournament money to bowl game revenue

Last fall (2013 football season), the ACC netted a record (for the league) $46.6 million from football bowl games. That was boosted to abnormal levels by a record-high number of ACC teams (11) making bowl games, including an extra, at-large BCS Bowl bid for Clemson that brought in an additional $6.3 million to the conference (on top of FSU’s $23.9 million for being the conference champion rep to the BCS).

In the 2012 football season, the ACC brought in $35.6 million. So in the last two years alone, here’s how NCAA Tournament payouts compare to bowl revenue:

2012-13: ACC Bowl revenue $35.6 million, NCAA units $18.2 million
2013-14: ACC Bowl revenue $46.6 million, NCAA units $17.5 million (projected)

Per this article, the Power 5 conferences received $216.9 million in bowl revenue for the 2012 season, while the NCAA money units paid out in 2013 (the same academic year) to the Power 5 conferences was “just” $88.9 million.

So even the NCAA’s cash cow, the Division I Basketball Championship, “March Madness,” is buried by the money brought in by the football postseason.

And that gap is only going to get bigger when the College Football Playoff kicks in this season. ESPN is paying $470 million a year to televise just the College Football Playoff, versus anywhere from $125 million to $155 million for the current BCS Bowls (depending upon which source you cite).

Total revenue for the Playoff will average over $500 million per year, per estimates, when other sources of revenue are added to ESPN’s payout. And the Power 5 conferences will reap 71.5% of that revenue, or approximately $357.5 million per year.

That $357.5 million figure dwarfs the $216.9 that the Power 5 conferences received from the old bowl system just one season ago. And remember, the $357.5m figure is just for the College Football Playoff. The other bowl games will add more to that pot.

I could go on crunching numbers and wandering down other rabbit holes, but here are the takeaways: The once-dominant ACC basketball conference is third (among Power 5 conferences) in revenue from NCAA Tournament units, and those Tournament units pale in comparison to football bowl money, which is only going to get bigger with the College Football Playoff next year.


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