The Information Age

The NCAA “Basketball Fund”


Story provided by Bloomberg – 

The Basketball Fund Is Born

So in 1990 the NCAA created the “basketball fund,” a plan intended to more fairly divvy up tournament revenue and parcel it out among the country’s Division I schools.The new plan cut the amount of the payout that’s directly tied to teams’ wins and losses. Most of the tournament’s TV revenue is now earmarked for things like academic programs and financial assistance for student athletes. Even schools that don’t play in the postseason get a cut.The remaining amount makes up the basketball fund—and it’s no small pot. Last year the fund totaled about 28 percent of the tournament’s TV revenue, or about $194 million. These coveted dollars are won or lost on the basketball court, and the battle among schools to claim them accounts for a lot of the Madness each March.

How It Works

Teams earn a “unit” for every tournament game they play up to the championship game. So a team that makes it to the final four will earn five units. Each unit is worth a specific amount each year. Instead of paying schools directly for the units they win, however, the NCAA now gives the units to a team’s conference, and the conference is responsible for distributing the money to its members. A conference can divide up the money however it wants, but the NCAA suggests schools evenly split the payout, and most conferences follow the recommendation.