Revenue Insights from FY21

Approximately 90% of the NCAA's total income is derived from March Madness, which includes revenue from television broadcasting rights, marketing deals, and ticket sales for championships.

A significant component of this revenue comes from a 14-year broadcasting agreement valued at $10.8 billion, established in 2010 with CBS Sports and Turner Broadcasting. This contract was extended in April 2016, adding another $8.8 billion, ensuring coverage of the tournament on these networks until 2032.

Among the 90 NCAA championships held annually, only five are financially self-sustaining: men's basketball, men's ice hockey, men's lacrosse, wrestling, and baseball.

The funds generated from these tournaments are redistributed to NCAA member institutions and student-athletes.

• 60% of NCAA revenue is allocated to Division 1 schools.
• 4.37% goes to Division 2 schools.
• 3.18% is distributed to Division 3 schools.

Financial Allocation to Different Divisions

Most of the budget for Division 2 and 3 primarily focuses on hosting their championships.

A significant 27% of the revenue returned to Division 1 schools comes from the Basketball Performance Fund, which is linked to a school's performance in March Madness.

For every game played, a conference earns a 'unit', and reaching the championship game can yield up to five 'units'. In 2021, each 'unit' was valued at $337,141, making it a substantial financial boon for smaller schools experiencing unexpected success, often referred to as 'Cinderella runs'.

For instance, St. Peter's, a small Jesuit institution in Jersey City with around 3,000 students, has emerged as an impressive underdog, achieving victories over Kentucky, Murray State, and Purdue.

Interestingly, St. Peter's has a total endowment of $37 million, which is less than the value of Kentucky coach John Calipari's contract, estimated at $86 million.

With a basketball budget of under $250,000 and having earned three 'units' thus far, the financial implications for St. Peter's are remarkable, regardless of their future in the tournament.

However, the NCAA prompts conferences to share these earnings equally among member institutions. Larger conferences like the Big Ten, with multiple income streams, can distribute the funds efficiently among their schools.

Conversely, smaller conferences, such as the one St. Peter's belongs to (MAAC), rely heavily on this payout to manage their own expenses, meaning only residual funds are allocated to member schools.

As reported by ABC, "For a league like the MAAC, which lacks the revenue of major football conferences, a run like this is transformative. The MAAC hasn't received more than one unit in the NCAA tournament since 2009."

Ultimately, the exact financial outcome for St. Peter's due to their historic performance remains uncertain.

The Allocation of NCAA Funds

While discussions about the absence of direct payment to college athletes continue (even though there are alternatives available), it's important to note that the NCAA funds its operational expenses from the remaining revenue after distributions.

Go Peacocks!

I hope this article has provided both entertainment and valuable insights. Thank you for reading!