March Madness 2015: Where’s all the Money Going?

Ryan Bhandari |

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As the books close on the first two weeks of the tournament, and the country prepares for the Final Four this Saturday in Indianapolis, fans of college basketball will soon be sad to see the sport end for the next six months. But while the fans may be upset, the NCAA will be delightedly counting the money they’ve earned off of the backs of their free labor (i.e. the hundreds of college basketball players on the 68 teams that participates in the tournament).

There’s almost universal agreement across the spectrum of sports pundits that something has to be done to compensate these student athletes in a more equitable way.

Full tuition is certainly nothing to scoff at, yet as many of these students still have essential living expenses that are well beyond what they’re able to afford, full tuition just isn’t enough. The notion of paying student athletes certainly has some merit, but I believe a better option would be to make a fund that student athletes could withdraw from in the event that they need help with living expenses.

NCAA Revenues

College basketball is the second most lucrative college sport (behind football of course). In 2011, the NCAA signed a 14-year deal with CBS worth more than $10.8 billion. So, on the men’s basketball tournament alone, the NCAA makes $770 million per year. This isn’t even including the money generated from college basketball’s regular season.

So Where Does All the Money Go?

Ninety-six percent of the money generated from the tournament goes back to the Division 1 conferences. The other 4% goes to paying administrative costs and salaries of employees of the NCAA. The money that goes back to the conferences is divided up by conference – each conference does not get an equal amount of money though.

The conference with the most number of units gets the most money and that money is divided up evenly between each school in the conference. For example, all the money the Big 10 schools earn in the tournament gets divided up evenly between every school in the conference. Teams earn units for each game they win in the NCAA tournament. Making the NCAA tournament counts for one unit and each subsequent win thereafter counts as a unit.

Sticking with the Big 10, even though a school like Northwestern hasn’t made the tournament ever, they still receive money every year because of the success of other big ten schools in the tournament. Michigan State, who has made it to the Final Four this year, will in the end get the same amount of money as Northwestern.

What About the Players?

Unfortunately for the players, they don’t see any of this money, which is sad because some of them could really use the funding for amenities as simple as food. For example, former University of Connecticut star player Shabazz Napier claimed that while he was attending UConn and playing basketball for them, he and many of his teammates went to bed hungry because they didn’t have enough money to buy food for themselves.

The ones who are playing and bringing bodies to the stadium and eyeballs to the television screen do not see any of this money.

Instead, the money goes to the universities that claim they need it to cover their expenses. The catch is, though, that universities need to spend or redirect all of the money generated from the NCAA tournament to maintain a nonprofit status. So instead of using this extra money to create a potential fund that players could draw from if they truly needed help, the money is often spent on building new athletic facilities that aren’t really necessary. In fact, schools will spend every excess cent they have to ensure that they can maintain the non-profit status.

In the end, less than half of the schools break even after the NCAA tournament is because of how quickly and unnecessarily they spend the money they get from the tournament. But the fact is, colleges certainly have the money to create a fund that players could draw from if they need the help. 

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