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Friday Fun With Numbers: How The NCAA Divvies Up Your March Madness Dollars

CBS-Turner March Madness LogoSome college basketball fans don’t get it when someone says they’re “rooting for conference” in the NCAA Tournament. After all, if you’re a Indiana fan, why would you ever want to see Purdue win a game?

The reason some fans cheer on every school in their conference is that the NCAA doesn’t pay schools individually for tournament success. Instead, it pays conferences based on their schools’ performances, and most of those conferences split the money evenly among all their schools. So in the Big Dance(TM), Purdue victories benefit Indiana, UCLA victories benefit USC, and Duke victories benefit North Carolina and N.C. State.

Last year, this Forbes article by Chris Smith detailed how the NCAA distributed revenue to conferences for their schools’ performance in the NCAA Tournament. It’s a fairly complex system that takes into account every school’s performance in the tournament over the course of six years, but the main takeaway is that the NCAA sets aside 40% of its total distribution as prize money — a/k/a “The Basketball Fund” — and that gets split among the conferences. Last year, the total distribution was $503 million, and the Basketball Fund was $202 million.

Of course, last year was also the second year of the NCAA’s 14-year, $10.8 billion deal with CBS and Turner Sports. That adds up to roughly $771.4 million per year. While the exact split between the two media giants has never been published, we do know that Turner is footing more than half the bill. (The split on this site’s front-page app is a rough estimate.) From this, we can deduce that the entire Basketball Fund comes from cable and satellite TV subscribers who get TNT, TBS, and TruTV in their channel packages. So if you’re among the 99 million or so people that pay for those Turner channels, we can figure out how much you’ll pay each conference this year through this contract.

(Yes, we’re assuming that the CBS money from this contract all goes to noble things like Grants-in-Aid and “Student Assistance”, but let’s just play along, shall we?)

The Basketball Fund is split into “game units”. Each school gets one unit for every game it plays in the tournament, starting with the round of 64. The number of units earned by schools over six seasons is added up, and the conferences receive the unit price multiplied by the number of units their schools have earned. For example, if a conference’s schools have earned 50 units over the course of the last 6 years, and a unit is worth $200,000, then the conference earns $10 million that year, which is then distributed to the colleges. (Usually, it’s an even split after travel costs are reimbursed, though a few conferences reward winners.)

According to Smith, one game unit is worth $245,514 this year. Based on that number, here’s how much the six “power conferences” will receive this year, along with how much you as a pay TV subscriber will give those power conferences for their successes over the last six years:

Units Earned
Total Winnings
What You’re Paying
Big East
Big Ten
Big 12

You can see the table I slapped together to determine those unit numbers here. That table also includes the Atlantic Sun Conference, which gave us the high-flying Florida Gulf Coast University Eagles. Thanks to their efforts, the Atlantic Sun will receive at least eight units for the next six years, rather than the six they’ve been getting. That will bring the conference an additional $491,028 this year and at least $3 million over the next six years.

Not that this prize money is all that FGCU gets for their success, of course…

Meanwhile, as colleges started changing conferences in search of bigger TV dollars, the NCAA instituted this policy:

If an institution leaves a conference and realigns with another and its original conference remains in operation, the units it earned remain with the conference that it left.

If a conference disbands, each institution retains the units it earned in the basketball fund.

That means units that Missouri and Texas A&M earned before they left the Big 12 for the SEC remain with the Big 12. On the other hand, since the old Big East is disbanding after this season, the 28 units earned by all the Catholic schools will follow them to the new Big East next season, while the new American Athletic Conference keeps the rest. (Butler’s units, however, will remain with the Horizon League and the Atlantic 10.)

So that’s at least another 7 cents of your money that the new Big East will receive next season, on top of the 48 cents you’ll give the new conference through Fox Sports 1. It doesn’t seem like much when you break it down individually, but cable and satellite TV finds its strength in numbers — and for Turner and Fox, those numbers are quite large.


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