How Much Does the NCAA Make Off March Madness?

March Madness is big business for the National Collegiate Athletic Association (NCAA), when its most anticipated basketball games tip off and sports fanatics scramble to fill out tournament brackets and place bets in office pools. The NCAA typically pulls in about a billion dollars each year in revenue from media rights fees, ticket sales, corporate sponsorships, and a proliferation of television ads anchored around the three-week-long tournament.1

And the games aren’t just a big business within the collegiate ecosystem. In 2022, 45 million Americans wagered an estimated $3.1 billion on the tournament, according to the American Gaming Association.2 Big brands also take their piece of the profits, but the NCAA conference commissioners and executives see the heftiest cash-out.

KEY TAKEAWAYS

• The NCAA earned $1.14 billion in revenues in 2022, with roughly a billion of these earnings made from March Madness.1
• Despite a large amount of money generated by the NCAA and its member colleges during March Madness, the players have historically received zero compensation.
• Following a Supreme Court ruling, 2022 was the first year players could earn money from endorsement deals and sponsorships.3
• Overall, the money generated during the annual tournament is divided among the various conferences and is dependent upon the performance of schools in their division, not directed by the NCAA.
• Broadcast rights continue to be a good source of income for the NCAA with $873 million generated in 2023; CBS Sports and Turner Broadcasting found their returns profitable enough to extend their contract until 2032.4
  

What Is the Size of the Pot?

Basically, March Madness is the NCAA’s bread and butter. In 2022, the college athletics’ governing body earned $1.14 billion in revenue, with the tournament representing almost 90% of the total. On the surface, that seems like cause for outrage, especially in light of how much the players earn: nothing.5

While players make no money from March Madness, they can now get paid from endorsement deals following a narrow Supreme Court ruling in 2021. This was after the NCAA blocked players from earning money for years.3

For the NCAA, one of the most lucrative contracts connected with the tournament is for broadcasting rights. Across the 2023 tournament, $873 million will be earned from these rights.4 In 2010, the NCAA signed a 14-year, $10.8 billion contract with CBS Sports and Turner Broadcasting, paid over the term. The deal was extended in March 2016 for an additional $8.8 billion that will keep the tournament on the networks until 2032.6

According to the NCAA, about 90% of the money that it collects immediately flows out to the member schools. It’s the only system in place that assigns a monetary value based on athletic performance.5

Fast Fact:

A 2021 rule change allows NCAA athletes to earn money from their names, images, and likenesses, though they're still prohibited from earning a salary to play while in school.7

How Tournament Money Gets Divided

This year, 68 teams got an invitation to play in the tournament. Each of those team’s conferences will get a piece of a pot of money known as the basketball performance fund. The fund was nearly $170 million in 2022.8

For each game that a team plays, its conference gets a payout, which is based on its performance over a six-year rolling period. Conferences get units for their tournament participation. If a team makes it all the way to the championship game, it can earn as many as five units. If a team makes the championship game from the first-four bracket, it could earn a total of six units. In 2022, a unit was worth an estimated $338,887.9

Of course, each conference wants to see as many of its member schools in the tournament as possible, to raise the payout that it receives. For smaller, lesser-known conferences, the basketball fund money that they receive can represent a major portion of their annual income.10

For a surprise team that is virtually unknown and makes it through multiple rounds, the payout can represent a much-needed cash injection for its conference. For larger conferences, however, such as the Atlantic Coast Conference (ACC) or the Big Ten, the basketball fund is more like financial icing on the cake than a major source of revenue.

Fast Fact:

The NCAA’s decision to pull the plug on 2020’s tournament just before it got underway due to the pandemic—the first cancellation in its 81-year history—slashed revenue by more than half for the 2020 fiscal year, to just below $520 million. It ended up posting a net loss of just under $56 million for the fiscal year.11

How Are Earnings Divided Across Conferences?

The NCAA urges conferences to divide the money equally among their member schools. Larger conferences, which have multiple sources of income, routinely divide up most of the money and send it to their member schools’ athletics programs. Smaller conferences, however, count on that money to cover their own expenses. Only the money that’s left over goes to member schools.12

WARNING: Despite the proliferation of bets associated with the March Madness tournament each year, the NCAA’s official policy on sports gambling by athletes is this: “If you put something at risk, such as an entry fee, for an opportunity to win something in return, you violate the NCAA sports wagering bylaws.”13,14

How Much Are the NCAA’s Annual Revenues?

In fiscal year 2022, the NCAA generated $1.14 billion in revenues. March Madness accounts for a majority of its revenues, which come from broadcast rights, ticket sales, corporate sponsorships, and television advertising.

When Was the First NCAA Basketball Tournament?

The first NCAA men’s basketball tournament took place in 1939 with eight teams participating. The University of Oregon played The Ohio State University in the finals, with Oregon winning 46-33.15

How Many Teams Play During March Madness?

A total of 68 teams play in the March Madness tournament. The tournament lasts three weeks.

How Much Does the NCAA Earn in TV Broadcasting Revenues?

In 2023, the NCAA will earn $873 million in broadcasting and license revenues.4

The Bottom Line

There’s plenty of criticism of the funding model used by the NCAA. The colleges see very little, while the players, who actually create the income, see none at all. Still, in the case of the NCAA, the organization isn’t pocketing most of the cash that it takes in. Only what’s left over, according to the NCAA’s financial disclosures, goes to its own operating expenses.16

Article Sources:

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1. National Collegiate Athletic Association. "Consolidated Financial Statements August 31, 2022 and 2021."
2. American Gaming Association. “2022 March Madness Betting Estimates.”
3. Supreme Court of the United States. "National Collegiate Athletic Association v. Alston et al."
4. Statista. "Revenue of the NCAA from Television Broadcast Payments and Licensing Rights from 2012 to 2026."
5. National Collegiate Athletic Association. “Consolidated Financial Statements (2021),” PDF Page 6.
6. National Collegiate Athletic Association. “Consolidated Financial Statements (2021),” PDF Page 20.
7. National Collegiate Athletic Association. "NCAA Adopts Interim Name, Image and Likeness Policy." 
8. National Collegiate Athletic Association. "2022 Division I Revenue Distribution Plan."
9. Los Angeles Times. "How NCAA Units Turn the Pack-12's March Madness Wins Into Big Paydays."
10. Sportico. “March Madness Daily: The NCAA’s Billion-Dollar Empire Is Built on Basketball.”
11. National Collegiate Athletic Association. “Consolidated Financial Statements (2020),” PDF Page 6.
12. National Collegiate Athletic Association. “Where Does the Money Go?” 
13. National Collegiate Athletic Association. “Sports Wagering.”
14. National Collegiate Athletic Association. “Stay Eligible.”
15. History.com “March Madness Crowns Its First Men's NCAA Champion.”
16. National Collegiate Athletic Association. “Finances of Intercollegiate Athletics.”