Money Madness: Analysis shows growing gap in NCAA Tournament payouts

HARTFORD, Conn. – Powered by Ja Morant’s no-look passes and Dylan Windler’s step-back 3s, March Madness has been a bonanza for the Ohio Valley Conference.

The conference placed two teams in the NCAA men’s basketball tournament for the first time in 32 years. Then Morant’s Murray State Racers and Windler’s Belmont Bruins won games during the first week of play, making them darlings for underdog-loving fans everywhere.

That’s over now – both teams lost their second tournament game. But the big payoff for the conference’s 12 schools comes over the next six years, a windfall of at least $6.77 million that starts in 2020 with a $1.1 million payment from the NCAA.

Every year, millions of dollars are distributed to 32 Division I conferences by the NCAA based on what teams get into the tournament and how far they advance. Last year it was $216 million.

The hoops showcase is the centerpiece of the NCAA’s revenue. In recent years, the portion of those funds going to the five most powerful conferences in college sports has increased, according to an AP analysis of more than $3 billion in payments distributed from 1997-2018.

For conferences outside the wealthiest, an upset or elusive at-large bid is like winning the lottery. Already at a huge disadvantage, it is becoming harder for teams in smaller conferences to keep up. Windfalls like the one heading toward the Ohio Valley have become even more important to midmajor hoops.

“We have to take advantage of this moment,” Ohio Valley Conference Commissioner Beth DeBauche said hours before Murray State was eliminated by Florida State on Saturday. “We will start as soon as this tournament run ends, talking about what this means and how we can build upon it.”

It all points to a long-term problem for mid-majors trying to compete as power conferences stockpile wins and at-large invites to the tournament: It takes revenue to build a program that can compete with the big boys. For those with less, it is becoming harder to generate more.

“It is a vicious cycle,” Atlantic Sun Commissioner Ted Gumbart said.

The 2018 tournament brought in $844.3 million in television and marketing rights, the vast majority from a contract with CBS and Turner Sports to televise the games. That deal grows annually, its latest extension worth $8.8 billion over eight years, starting in 2024.

Most of the money flows back to 1,200 members. The schools mostly reinvest in athletics, from scholarships for athletes in all sports – though not salaries – to coaching salaries, training facilities, stadiums, ballparks and arenas.

From 1997-2018, the Big Ten Conference has been paid the most at $340 million, while the Southwestern Athletic Conference has earned $25 million, nearly the minimum it can earn given that all leagues make money from their teams that qualify automatically.

Since massive realignment among college conference in 2012-2014, Power Five schools from the Atlantic Coast, Southeastern, Big Ten, Big 12 and Pac-12 has earned even more under the system of “units,” the term used by the NCAA to tally the performance payouts.

How it works: Each distribution year is assigned a value for a single unit, which is then applied to bids and most wins earned by conferences over the previous six tournaments. The NCAA last paid $273,500 per unit for tournament results from 2012-17.

The Power Five conferences earned 47.5 percent of NCAA Tournament units from 2002-13. From 2014-18, those same conferences – which also rake in billions from media rights deals, conference networks and postseason football – earned 55.3 percent of NCAA Tournament units.

Some of that has come at the expense of the Big East, which was picked apart during realignment and reconfigured from 16 teams to 10. Still, with a 12-year, $500 million television contract with Fox and no major college football to support, the Big East is in much better shape than others outside the Power Five.

Units earned by the 26 other Division I conferences have fallen from 39.4 percent from 2002-13 to 36.4 percent since. The decline tracks with a falling number of at-large bids going to conferences outside the Power Five and Big East.

“It’s discouraging because the challenges are increasing on a year-to-year basis,” said Doug Elgin, who has been commissioner of the Missouri Valley Conference for 31 years.

“The gap in resources between the high majors and everyone else is accelerating at an alarming rate.”

The NCAA began its current system in 1991. It provided The Associated Press with unit values dating back to 1997, the earliest year for which it had reliable data. The AP calculated NCAA distributions, confirming figures since 2008 with detailed payouts provided by the NCAA and applying unit values to tournament results from earlier years. The AP also used formulas where provided by conferences to estimate how money was shared by schools, before expenses.

Conferences are more concerned about occasionally landing an extra at-large bid, and not just hoping to spring a major upset to earn a bigger piece of the pie.

“If that window of opportunity is shrinking for all of us …. it really becomes an elevated concern more than it probably has been in the past,” America East Commissioner Amy Huchthausen said.