March Madness can make or break careers for college basketball players and coaches, but no one has more on the line in these three weeks than the NCAA itself.
The governing body controls neither the College Football Playoff, nor any FBS bowl games, which means the annual men’s basketball tournament is the end-all-be-all financially for the NCAA. The association made a record $1.16 billion in 2021 and more than 85% of that came from March Madness.
The biggest driver is the NCAA’s long-term TV deals with CBS and Turner Sports, which will pay the Indianapolis-based organization up to $19.6 billion over the 22-year term. Payments escalate each year, with the NCAA set to receive $870 million this year should it deliver every game.
That if, once an afterthought, has taken on new meaning in the COVID-19 pandemic. The NCAA canceled the tournament in 2020, and later said it lost more than $800 million in revenue because of the decision. Last year’s tournament was held entirely in Indiana in front of limited fans, which restricted ticket revenue and some sponsorship.
Insurance has helped offset some of those losses. The NCAA collected $270 million from a loss of revenue policy in 2020, and another $81 million last year. Its annual financial report, released in February, said that insurance was no longer available “given the changes to the marketplace due to COVID-19.”
The NCAA distributes about 60% of its annual revenue back to its member schools and conferences. It’s a complex web of payments, but the three biggest buckets are: scholarship grants, payments based on March Madness performance, and championship expenses. 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.