The Business of the March Madness Tournament
It might not be the Super Bowl, but the NCAA Division I Men’s Basketball Tournament–you know it better as March Madness–is one of the most popularity sports events of the year. And with that popularity comes a lot of money. From the fans to the players, there is money changing hands… and a whole lot of it, too. While it might be impossible to track all the far-reaching financials of this larger-than-life industries, we can take a look at the bigger numbers March Madness produces.
Let’s start with a figure that’s going to be at least a little familiar to diehard college basketball fans: ticket prices. Fans who want to see their teams play in-person are in luck, as tickets average out at a bit more than $300. That’s not cheap, but when compared to other big sporting events, isn’t really too much of a surprise. Overall, however, those tickets add up to a nice chunk of revenue, and while total March Madness ticket revenues aren’t readily available, sales do contribute to the NCAA’s whopping $1 billion revenue.
A big part of that $1 billion revenue? The network fees. It’s an open secret that the NCAA tournament has seen a decline in viewership over the years, but TV networks are still willing to shell out the big bucks to have the privilege of airing the games. To give you an idea of the kind of money we’re talking about, CBS and Time Warner, the current and long-time homes of March Madness, recently inked a nearly $9 billion deal with the NCAA to keep the games airing on their stations for the next 15 years.
That’s a lot of money going in, so how does it get dispersed? It’s a little complicated, but it basically boils down to each conference getting a share of pool money that’s based on how many times a team represents it during the tournament. It’s up to the conferences to split the money among their teams, but the NCAA recommends that they split them evenly among the teams. In terms of real numbers, a conference can earn anywhere from about $2 million to $8 million.\
Again, it’s up to the conferences to split the money, but how they do so depends on the size of the conference. You may not know it, but basketball programs aren’t especially profitable, and smaller conferences usually need much of the money they earn during the tournament to cover costs. On the other side of the spectrum, however, top-earning colleges can earn tens of millions of dollars.
After everything, what about the real talent of the show – the players? Those who don’t follow March Madness too closely may be shocked to know that the players don’t get paid to play, due to NCAA rules. That said, there are other financial perks of being a star college basketball player, such as scholarships, free tickets, and health care benefits that aren’t accessible to other students. Still, if you play ball and want the real money, you’ll probably have to wait until you make it to the NBA.