A Cinderella run can do more than bust your bracket — it can net hundreds of thousands of dollars to the smallest Division I schools.
Take a look at your bracket. For simplicity’s sake, the one you have right now — your gut reaction from Selection Sunday, without all the cross-outs and second-guessing you’re sure to endure before things really get going on Thursday.
You probably have a few upsets. No. 13 South Dakota State seems primed to take down 4-seed Providence. No. 12 UAB seems to be a popular Sweet 16 pick. Maybe you’re taking someone completely off the radar. After all, you know there’s a team that’s currently an afterthought but will be the talk of the tournament by Friday.
By this point, it’s likely you’ve heard the phrase “NCAA distribution units” and have some idea that this is how the NCAA allocates the revenue it pulls in from the men’s NCAA Tournament each year. You might even know that if South Dakota State does, in fact, beat Providence, and if UAB goes on a run, then the Summit League and Conference USA are going to benefit financially.
But how much? And how is it all determined? Let’s take a look.
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The NCAA Basketball Fund
Football might drive the bus in virtually every key decision that the NCAA, conferences, and institutions make, but March Madness is the organization’s biggest money-maker. In a typical year (so, non-COVID-effected) the NCAA men’s basketball tournament pulls in over $1 billion dollars in revenue. A portion of that money goes back to the Division I conferences to allocate to their member schools. This is the NCAA Basketball Fund. In 2019, the last “normal” NCAA Tournament, that fund was worth $170 million.
Distribution Units
Every Division I conference — and, by extension, every Division I school — received a portion of that $170 million, which was divided into “units” of equal size. Each year, units are doled out through two separate funds within the greater NCAA Basketball Fund:
- Equal Conference Fund: Think of this as the participation trophy of NCAA Tournament teams. By competing in the NCAA Tournament, each school earns one distribution unit for its conference. So a one-bid league will get one unit, and this year the Big Ten, which sent nine teams to The Dance, will get nine through this fund. There are a total of 68 units available in the Equal Conference Fund (one for each team).
- Basketball Performance Fund: In the simplest terms, the remaining units are given based on teams’ performance in the tournament. Each game played, up until the national championship game, earns a team one unit. That unit for this tournament will be paid out to a conference six times, once per year, starting in 2023.
In total, this means the absolute most that a team can earn for its conference is six units: 1 from the ECF and five by playing in the First Four and advancing to the Final Four, like UCLA did last year.
How Much is 1 Unit Worth?
The value of one unit changes each year, and in 2022, it is estimated to be $338,887. That’s up a little bit from 2021, when a unit was worth $337,141.
Here’s how it all plays out, using the Mountain West as an example:
- The Mountain West sent four teams to the NCAA Tournament: Wyoming, San Diego State, Colorado State, and Boise State
- All four of those teams have earned one ECF unit for the Mountain West by making it to the tournament ($338,887 x 4 = $1.36M).
- Let’s say Wyoming beats Indiana in the First Four. By then playing a second game (the First Round), Wyoming gets another unit for the MWC.
- Let’s say Boise State and Colorado State both lose their first games. They’ve earned the ECF unit and nothing else.
- We’ll give San Diego State a win over Creighton and a Second Round loss to Kansas. That’s one more unit from the Aztecs and nothing more.
- Now, let’s let Wyoming go on a miracle run to the national championship game. The Cowboys earn an additional unit for playing in the Second Round, Sweet 16, Elite Eight, and National Semifinal, for a total of six units.
- In total, this gives the Mountain West 10 units from this tournament, to be paid each year for the next six years, resulting in a total of $3.39M given to the Mountain West. That’s $20.34M total, which the conference will pay out to each of its 11 teams. If distributed equally, that’s $308,000 per school, per year, for a total of $1.85M.
The Value of an Upset
Now, let’s look at Georgia State — a 16 seed set to play Gonzaga, the top overall seed, in the First Round. Georgia State is a public school, so its athletic department budget is public information, available to view here via Sportico. The Panthers reported $30.48 million in athletic department revenue in 2020-21. That number sounds big, but compare that to Clemson, which reported $132.13 million in revenue.
Georgia State also reported over $32 million in expenses, but take that with a grain of salt. Schools often massage these numbers to make it look like they aren’t as profitable as they are. Regardless, Georgia State operates at a significant monetary disadvantage compared to the national powers.
Georgia State doesn’t add anything it didn’t already have by making the tournament. Every conference gets an automatic bid, so the Sun Belt was going to get a tournament unit through the ECF regardless.
But let’s say the Panthers do the seemingly impossible and take down Gonzaga to become the second-ever 16 seed to defeat a No. 1 in the men’s tournament. That $338,887 unit Georgia State is already guaranteed doubles to $677,774. Divided evenly among the 12 Sun Belt teams, that’s a difference between $28,240 and $56,481. Over six years, that’s a difference between $169,440 and $338,887.
If you’re wondering the impact that makes, consider this: Georgia State played four “buy games” this year, or games where the university is paid to go on the road and probably lose to a better opponent. That payout, depending on the opponent, can be anywhere between $40,000 and $100,000 or more. So by winning one game in March, Georgia State could earn the equivalent of an extra buy game payout for every team in its conference for the next six years. You think coaches, who hate having to go into a game they know they will lose, wouldn’t appreciate the opportunity to knock one off the schedule? Or, conversely, you think an AD would appreciate getting the extra buy game payment without having to actually play it?
This is just something to keep in mind this week when you’re watching Cinderella blow up your bracket. It might cost you $20 in your pool, but it’s making hundreds of thousands in cash for the little guys.
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