Every year, 68 teams are invited to the NCAA Men’s Basketball Tournament with one on-court goal in mind: winning the national championship. But only one team comes out as a winner.
Off the court, there’s another goal for everyone involved in March Madness: making money. In that respect, from the First Four games (played March 14-15 in Dayton, Ohio) to the Final Four (April 1-3 in Phoenix), everybody wins.
College basketball, specifically the fees for the rights paid by the networks to air the NCAA Men’s Basketball Tournament, is where the NCAA gets most of its money. Based on the organization’s financial disclosures, nearly $800 million of its revenue in the 2015-16 academic year came from the March Madness rights fees.
Let’s take a look at how much money March Madness generates and how it’s spent.
March Madness Money
In 2010, CBS Sports and Turner Broadcasting signed a $10.8 billion deal with the NCAA to broadcast the men’s basketball tournament for 14 years, ending in 2024. In 2016, the same parties agreed to an eight-year extension that will last through 2032 and is valued at $8.8 billion.
According to the NCAA, $797.7 million of the $991 million it generated in 2015-16 came from the rights to broadcast and market the men’s basketball tournament. It took in $123.5 million in ticket sales for championship events across all sports, except for college football. The bowl games and Division I College Football Playoff are operated separately outside the NCAA.
The NCAA put $205 million of its revenue last year into what is known as the “basketball fund.” That money is distributed to its conferences based on how well its members fared in the NCAA tourney. Every game played by a member of a conference in the tournament earns a “basketball unit” worth $260,814, which is calculated over a rolling six-year span. No units are awarded for playing in the championship game.
Once tallied up, the money is then sent to the conferences to divvy up among its members. Most conferences distribute the money evenly among their schools, but that’s up to the conferences themselves. For example, Villanova of the Big East won the 2016 national championship, but a spokesman for the conference told CBS News last year that the conference does not split the funds evenly, although every school will receive some money.
In 2016, the Big Ten led all conferences with $25,820,611 from the basketball fund, while the American Athletic Conference was second at $24,516,540. The only other school to receive more than $20 million was the ACC, which earned $20,604,326.
NCAA Tournament Television Totals
All that money spent on the rights does translate to advertising revenue for CBS and Turner Broadcasting. According to Kantar Media, Division 1 March Madness television ad sales were estimated at $1.24 billion in 2016, up 4.7 percent from the previous year. General Motors led the way by spending $93 million on TV ads, followed by AT&T at $80 million.
All three of the Final Four games aired on cable for the first time in 2016, being shown simultaneously on three Turner channels: TBS, TNT and TruTV. The move to cable from a traditional broadcast network appeared to negatively affect the ratings.
The 2015 championship game was a ratings bonanza for CBS. The game, which saw Duke beat Wisconsin to capture the title, garnered a 17.1 Nielson share and a total of 28.3 million viewers, an 18-year high for the event. Last year’s game on cable had a 12.0 rating and averaged 17.8 million viewers, a 37-percent drop from the previous year.
However, the numbers for Turner accounted for the second highest ratings numbers ever for a college basketball game on cable, behind only the 2015 Final Four matchup between Wisconsin and Kentucky, which had a 13.3 rating on TBS.
March Madness Brackets: Fixated Fans
It’s hard to think of a multi-day sporting event that captures the attention of American sports fans more than the NCAA tournament. Since the event begins in the middle of the day during the work week (first-round games will be played Thursday, March 16 and Friday, March 17), it’s natural that many workers will be dividing their attention between their job and keeping an eye on the games.
A 2017 report released by outplacement firm Challenger, Gray & Christmas, Inc., estimated that nearly 50 million workers will use company time to research, fill out and track their NCAA brackets. That works out to be $1.3 billion per hour in lost wages.
Not only will those workers be watching the tournament results because of their rooting interests, many also have a financial stake in the games.
A 2014 survey by Careerbuilder.com said one in five Americans fill out a March Madness bracket for a pool. Broken down by occupations, the survey found 31 percent of financial services employees fill out a bracket, followed closely by those working in sales (30 percent) and IT (29 percent).
According to BetFirm.com, fans spend approximately $3 billion on NCAA bracket pools across the country. The American Gaming Association set the 2016 estimate of total money wagered on March Madness at $9.2 billion, with just $252 million bet legally at Las Vegas casinos.
So go ahead and fill out your brackets and follow along during the games. But try not to totally neglect your work while doing so.