March Madness, as it does every spring, will make or break the NCAA’s fiscal year.
While top-tier college football is both more popular and a much larger commercial entity than college basketball, the NCAA makes virtually no money from its postseason. The governing body controls neither the College Football Playoff, nor any FBS bowl games.
As a result, the annual men’s basketball tournament is everything for the NCAA. Pre-pandemic, the event comprised more than 85% of the NCAA’s roughly $1 billion in annual revenue. The vast majority of that total comes from broadcast deals with CBS and Turner, but it also includes ticket sales and sponsorship.
The NCAA distributes most of that money back to its members. It’s a complex web of payments, but the three biggest buckets are: scholarship grants; payments based on March Madness performance; and championship expenses, such as travel, food and lodging. Those distributions aren’t critical for a $200 million athletic department like Ohio State’s, but they matter a lot more for nearby Wright State.
The cancellation of the 2020 tournament reshaped those funds. The NCAA estimates that it lost $800 million in revenue from the decision, a total partially offset by a $270 million insurance payout. The total member distribution from the canceled tournament went from an expected $600 million to just $225 million.
That explains why the Indianapolis-based NCAA is doing whatever necessary to hold this year’s tournament. The entire 67-game event is being held within Indiana, with strict testing requirements, travel restrictions and replacement teams waiting in the wings. The good news: Despite no ticket sales, the NCAA says the total payout pool will return to normal—$613.2 million this year—if the event is held in its entirety.