The Money Behind March Madness

The Money Behind March Madness

March Madness, it’s one of the biggest events in American sports 68 college teams get invited to the big dance by early April. There’s only one left standing. So how big is March Madness? It draws in millions of viewers and breaks in more than 800 million dollars each year from its television deal alone. Which makes up more than 75% of the NCAA’s yearly revenue. Bracketology is also a thing. The tournament creates a frenzy around brackets which fans fill out to predict the outcome of every single game. In 2014, Warren Buffett and Quicken Loans even offered a prize of $1 billion to anyone predicting a perfect bracket. The odds of doing that were 1 in 9.2 quintillion. March Madness is about upsets, underdogs and up lifting narratives. But it’s also about the money. Here’s how the Big Dance became a big business. The NCAA’s Division one Men’s Basketball Tournament is the official name of March Madness. It got its start back in 1939 and back then there are only eight teams that participated. As the years went on, the tournament invited more and more teams. The “March Madness” nickname didn’t start until 1982 when CBS announcer Brent Musburger coined the phrase. At the time, there are only 48 teams competing in the tournament. The modern format featuring 64 teams began a few years later in 1985 and by 2011 there are 68 teams competing in the tournament. March Madness has since become a staple sports with its historical championship games featuring players like Michael Jordan, Patrick Ewing and Michigan’s “Fab Five.” But March Madness has turned into an economic powerhouse for the NCAA. Revenue from the tournament helps fund less popular or less TV friendly college sports across the U.S. Most of the NCAA’s revenue comes directly from March Madness. Specifically from the NCAA’s lucrative deal with CBS and Turner Broadcasting. The TV deal brought an eight hundred fifty seven million dollars in 2018. Back in April 2010, the NCAA, CBS and Turner reached a deal for exclusive television, internet and other broadcasting rights for 14 years ending in 2024. The deal included more than $10 billion over the course of the 14-year contract. The deal was revisited back in 2016 and extended the original agreement. Instead of the deal ending in 2024, it was extended another eight years through 2032. Under this new agreement, CBS and Turner would pay an additional $425 million between 2018 and 2024. The remaining $8.3 eight billion would be paid out between 2025 and 2032. These media right are massive deal for CBS and Turner. In 2018, March Madness has brought in more than 97 million viewers and was watching more than 180 countries. March Madness also hit $1.32 billion in TV ad spending in 2018. Compare that to other sports his postseason, March Madness beat out the NBA, MLB and college football. Only the NFL generate more ad spending. You’ll notice for March Madness there are a ton of big corporate sponsors and there’s a main reason why. They’re getting that hard-to-reach demographic young college-educated Males who are actually watching TV. So many advertisers, they struggle to reach those people. They’re hard to find. They’re hard to actually get on TV. But this tournament actually collects them and puts it in front of those screens. Then, there’s the money that comes from March Madness and it’s adjacent tournament, the NIT. The NIT tournament is essentially a consolation tournament for teams that did again from March Madness. Together March Madness and NIT helped contribute to more than $132 million in ticket sales for the NCAA in 2018. And that’s including revenue from championships and other sports. Even though college football’s national championship grabs higher TV ratings than its counterpart in basketball, the NCAA doesn’t receive any revenue from bowl games or the college football playoff. In college football, athletic conference’s negotiate individual TV deals. Out of the 90 championships at the NCAA hosts each year, only five generate at least as much money as it costs to run them. The NCAA brought in revenue more than $1 billion in 2018. But more than $972 million came directly from the March Madness TV deal and the NCAA’s ticket sales. Where does all this money go? The NCAA redistributes the money it makes from March Madness to over a thousand schools across 24 sports in three divisions. Nearly half a million student athletes currently compete in college sports. While their funding comes from individual schools, the NCAA divvy up the revenue for March Madness for Student athletes and the programs that help them. In 2018, over a $164 million went to the NCAA’s D1 Basketball Performance Fund. That cash is distributed to conferences and independent schools based on their performance during March Madness over a six year period. The NCAA isn’t the only one making money. The coaches get paid too. If a team gets a March Madness playoff berth, then the school’s head coach receives a bonus. John Calipari is the head coach of the Men’s Basketball team for the University of Kentucky He’s set to earn $8 million during the most recent season. His base salary from the University of Kentucky is $400,000. But the media and endorsement compensation clocks in at $5 million dollars. The remaining $2.6 million dollars is Calipari retainer. John Calipari doesn’t just rank as one of the highest-paid coaches in college sports, He also technically ranks as one the highest paid public employees in the country. His salary is more than Kentucky’s governor Matt Bevin who makes over $145,000 a year. Calipari even makes more than a U.S. President who makes about $400,000 a year The relationship between why players don’t get paid?
But why coaches do? They see all this money coming into the NCAA because of March Madness, because of college basketball, and they say look it’s because of the players. They need to get a cut of that revenue. They are the product. Why are they not getting paid? But the schools will say look they are getting paid. They’re getting a free full ride scholarship that’s worth hundreds of thousands of dollars. And some people will say look you’re getting a lot more exposure when you’re playing college basketball. Zion Williamson is much more famous because he plays for Duke. If he was playing in the G League right now, if he was a rookie somewhere, internationally, or maybe it on an NBA team, not in a big market, maybe we don’t hear as much about him. So he may be making himself more money because he’s getting that national exposure. But there’s even more money behind March Madness. Back in 2018, the American Gaming Association estimated that Americans would wager about $10 billion on March Madness and only 3 percent would be legal. Some of these illegal bets were the direct result of die hard and casual sports fans participating in March Madness polls with their friends and around the office. These polls are a collection of people trying to predict the outcome of every single game between 68 teams in their March Madness Brackets. At the time, Nevada was the only state where Americans could legally wager on sporting events. But in May of 2018, the U.S. Supreme Court voided the Professional and Amateur Sports Protection Act, which has been in place since 1992. The law banned sports betting in states that didn’t have a law on sports betting already. While not every state has lifted its own provisions on sports betting as of yet, states like New Jersey open its doors to betting on both professional and amateur sports. So I’ve said that I’m gonna place two $20 bets. I’m gonna walk back and make those two bets, the first two legal sports bets in the history of this state. It will not be on the Boston Red Sox. You’ve got the handle number. That’s how much money is being spent. But most of that money goes to the winners. The actual money that goes to the casinos isn’t very small. Maybe 5% of what’s actually getting taxed. And then the amount that’s being taxed on that, the amount that the governments make is an even smaller percentage of that. So when you’re hearing billions of dollars that are being bet, just a couple million dollars are actually going into these state tax coffers. So it’s much smaller than you think. March Madness alone is close to $1 billion business for the NCAA and it doesn’t appear to be slowing down anytime soon. Viewership for March man was its highest-ever in 2018. And the league’s lucrative TV deal will be in place until 2032. That’s 13 more years of big money for the big dance.

100 thoughts on “The Money Behind March Madness

  1. The NCAA brought in $857 million in 2018 from its March Madness TV deal. Should student athletes receive a cut of the profits?

  2. The things that hurt me the most back in the day is a lot of these black players could never go to these colleges support your black colleges

  3. I agree with guys taking money from boosters and under the table or whoever cause the NCAA care nothing about these athletes and half that money need to go to the players of whatever sport that brought the revenue in.

  4. CBS, explain why a college basketball player cannot make any money off of their own name while playing for a college?

  5. It's a weird system… In most countries academics and atheletics are separated. What does basketball have to do with academics?

    In europe athletes go to Sport clubs junior teams to practice and play and possibly go pro around high school/college age

  6. Bhutan is probably the country that is least expected to watch march madness considering how isolated the country is. But me and my buddies watch every march madness. This year my betting opponent is Lyonpo Lekey Dorji, former Economic Minister of Bhutan. He rooted for Kansas Jayhawks while I am still rooting for Gonzaga. If march madness is popular in country like Bhutan, no wonder its being watched in 180 different countries.

  7. “But…bruh… this is just like slavery.”

    No it’s isn’t. You actually have a choice not to play basketball (or any other sport) in college.

    You don’t have a choice on whether or not you become a slave.

  8. Brent Musberger used the phrase March Madness from Illinois High School Basketball State Tournament. IHSA has called its Tournament March Madness for years before 1982.

  9. Look up the salaries for employees at the NCAA headquarters. These people are getting perks, travel deals, hotel accommodations, free rentals, and paid meals. This is not even touching their personal salary. Paying out scholarships for an entire season don't even equal the amount of the assistant coach yearly salary. Unfortunately not enough people are willing to break this flawed system down to pay the athletes, I mean student-athletes. 😒

  10. If a coach can make EIGHT MILLION DOLLAS annually, then at least 1/4 of that salary can be stipend to the players on that team…

    Yes, Zion Williams has gained exposure through the NCAA MARKETING THE HELL OUT OF HIM FOR TICKET & APPAREL SALES, VIEWERSHIP AND RATINGS 🤪😫🤬!!!

  11. Look at ALLL THIS MONEY the players can't get.

    Their schools can though!

    But screw the players. They don't get anything but a chance at a scholarship. Lol

  12. The idea that Zion Williamson is ~less~ famous because he wasn’t allowed to go straight to the tournament…y’all are crazy

  13. Trump only makes 1$ a year because the state has to pay him a salary but he doesn't want to accept a big sum… idk where you get the number of 400k from….

  14. The whole reason it’s fun to watch is because it isn’t spoiled millionaires lmao people are gonna be turned off when the kids start getting paid overtly and not under the table

  15. NCAA athletes are like people who leave college and get hired for an unpaid internship to get experience in their field, both are predatory and should be abolished.

  16. The players don’t get a crumb of that money. “Oh but they getting a free education” yeah when they’re playing basketball which is why they have the scholarship in the first place. U don’t play, u gotta pay.

  17. Old white men Pimpin young black dudes. The History of the United States. The old white man has a history of wanting in Free Labor. The cycle continues. As long as the old white Caucasian man is in power he will always have his boot on minority's.

  18. The education you get as your compensation is completely worthless, there is no way to be a competent student athlete and get a degree worth the value of the ink on the page.

  19. You are aware that the odds are not 1 in 9 quintillion…that would be assuming there is a 50-50 chance each team wins. You really think there was a 50-50 chance duke would win against ND state? Are you stupid? Who makes this? Third graders?

  20. I have an issue with them touting "national exposure" a bonus. If the NCAA didn't have a monopoly on players entering their professional athletic careers, the highly talented would still be gaining recognition in whatever arena they were playing in. But because they've asserted their supremacy as the source for "elite" talent in America, they can boast that their participants become stars before they ever sign a professional contract.
    I hope that this changes in years to come. Mandating that all players looking to enter the NBA or NFL must go through the same process, earning bogus scholarships for diplomas they'll never use, in the name of the unassailable "student athlete," is just propagating a system that benefits an elite few – namely the rich alumni classes of prestigious colleges, tv executives, and NCAA officials.
    They don't care about the students, unless they're winning titles. And even then, there's no guarantee that they'll go on to become successful professionals at the next level. It's criminal that these young men and women are giving up everything in their prime years for the promise of "national recognition," all while someone else profits off the name on the back of your jersey.

  21. The NCAA makes Billions off these kids while they are not allowed to receive any money.

    Man i should try and slave kids sounds profitable

  22. Listen to the guy's explanation whether Zion could've went overseas got paid a million to play one year and earned a massive fan base overseas, oh and haven't you heard of YouTube. We would definitely watch him dunk on people in Europe or Asia

  23. Did that guy said Zion wouldn’t have as much exposure if he didn’t go to Duke? What the hell? Zion was already Zion before Duke. Wherever he went would’ve been exposure. Smh

  24. This fool said most of the money bet goes back to the winners and the casino's and taxes get a small percent….FUCOUTTAHEERWITDATBULLSHT!

  25. Wow can't believe how much revenue they received from March Madness only 2nd to the NFL. The sad thing the players gets peanuts. The real winners here the NCAA and the coaches. Most def

  26. You know what's crazy yeah white people who make more money not playing basketball then some athletes who just coaches managers and agent

  27. What is the percentage of players who are African-American who paid for these colleges what is the average percentage that each individual African-American athlete gross revenue for the colleges didn't go look at these white colleges and see how much money they donate back to the black institutions within the black community this is why I say I believe in segregation because that money could it be going into the black community which we know it only benefits the White communities facts

  28. Check out , Stephen Darby : the jacked us, on YouTube and Dana Stevens : white church most wake up your enslaving god chosen, on YouTube this is a white man telling truth ⏳

  29. The player's aren't getting paid in free education because they spend all their time at practice or the games dumb ass…to help their school win a championship. And who's to say they'll go pro.

  30. Title 9 is the reason why these guys arent paid. If you pay the men, you have to pay the women. Most college womens sports dont make enough money to support themselves and are funded by mens football and basketball.

  31. i dont think they should pay players but i feel like they should allow them to get sponsorships and sign agents or maybe let them be able to make paid appearances at places. cause TBH where would you draw the line of who gets paid and who doesn't cause there isn't enough money for everyone

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