The economics of March Madness

For every win in the tournament until the Final Four, a team earns its conference ~$2m.

March Madness begins today. While the nation collectively cheers for an upset of the Duke men’s basketball team in the 1st round, here are 5 data points that explain the economics of the NCAA Tournament:

  1. $613m: Total NCAA payouts to the conferences of men’s tournament participants in 2021, out of ~$800m in NCAA revenue from hosting the tournament.
  2. $2m: The approximate payout for a men’s team that made the tournament in 2021, a payout made to each team’s conference in ~$337k increments over 6 years. For every win in the tournament until the Final Four, a team earns its conference another ~$2m. A Final Four team makes ~$10m, paid over 6 years.
  3. $35m: The gap in spending on the NCAA Tournament between the men’s and women’s tournaments in 2019. In a viral video, the University of Oregon’s Sedona Prince shamed the NCAA into providing more resources for women’s players, though the NCAA declined to specify how much they have closed the financial gap this year.
  4. $3B: The expected sum of legal bets on this year’s men’s tournament, per gambling news source PlayUSA.
  5. Priceless? What is it worth to have an Australian movie star on your side? The University of Iowa is about to find out because, for some random connection to the school’s coach, Hugh Jackman made a video telling the Iowa basketball team to “crush it.”

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