Where Does All the NCAA Tournament Money Go?

With March Madness well underway many assume that money is just given back to athletic departments without question after a big win. While some of that is true, money does in fact go back to the athletic departments, much of it is earmarked for specific types of uses and not simply deposited for general use. In addition, the NCAA keeps a portion to fund its operations. 

A total of $504 million (62 percent) was returned back to the Division 1 conferences and member institutions after the 2011 -12 fiscal year. 

Every year the money made is divided into six primary shares: Academic Enhancement, Basketball, Grant-in-Aid, Student Assistance, Sports Sponsorship and Conference Grant. This is how it’s all broken down: 

Academic Enhancement Fund ($24.6 million): A payment of $68,000 is sent to each Division 1 institution to use for academic support service for student athletes. 

Basketball Fund ($202 million): This is the one category where money goes back into athletic departments with no direction for its use. The NCAA distributes money to the conferences based on how many teams participated in the men’s basketball tournament and how many games each team played. Conferences are encouraged to split the money equally to all schools, but some conferences provide stipends to those who actually participated in the games. The payment amount from the NCAA is determined by each school’s performance in the tournament based on a six-year rolling average. 

In the 2011 – 12 season, each school participating in each game, excluding the championship game, received one unit (payment) of $242,000. No units are awarded for the championship game. 

In 2012 – 13, each basketball unit is worth $245,500. 

Here is how much money one team would make as they advance through the tournament: 

Round 1: $245,500

Round 2: $491,000

Sweet 16: $736,500

Elite 8: $982,000

Final Four: $1,227,500

However, units have six-year lives, so projections by Forbes have a Final Four participant this year earning its conference $7.7 million over the life of the units.

Grant-In-Aid Fund ($134.7 million): Distribution of money to schools is decided based off the number of scholarships given out the previous year. 

Student Athlete Assistance Fund ($66.1 million): This fund is made up of two separate funds: the Student Athlete Opportunity Fund ($51 million) and Special Assistance Fund ($15.1 million). Any athlete can use the Student Athlete Opportunity Fund even after they no longer partaking due to medical reasons or have surpassed eligibility. Students apply to this fund for a variety expenses. For example, they could apply if they need assistance with graduate school application fees or testing fees. 

Sports-Sponsorship Fund ($67.3 million): The schools with more non-revenue sports receive more money. This fund is used to help inspire schools to sponsor more sports. 

Conference Grant ($8.3 million): This grant is used to enhance officiating programs, compliance and enforcement, diversity, and drug and gambling education.

With regards to the Student Athlete Assistance Fund, Maryland recently brought to light an interesting question of whether student athletes are utilizing the resources available to them. Maryland recently used funds from the Student Athlete Opportunity Fund to purchase iPads for all it student athletes. Given that Maryland recently cut sports, many were upset with the move. 

However, Maryland quickly issued a statement saying the funds were from the Student Athlete Opportunity Fund, monies from which cannot be used to fund operating expenses, but instead must be used for educational purposes. 

Curious as to why Maryland had enough money in its fund to buy the iPads, BusinessofCollegeSports.com founder Kristi Dosh held an unofficial Twitter poll asking athletic administrators across the country whether or not student athletes utilize this money. Most of the responses Dosh received indicated that student athletes aren’t applying to use the funds, despite the administrator’s insistence that student athletes know about the fund. A couple inferred that perhaps the paperwork is too much trouble. Only one school, out of about a dozen, indicated its student athletes routinely use up all the money in the fund. 

Are you surprised at how March Madness money is divided up? For more information on just how much conferences take home from the tournament, check out Kristi’s piece from last year on ESPN.com.

Follow Mackenzie on Twitter: @KenzieThirkill