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So what is the math on the NCAA bball tourney if no NCAA cut taken?
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Win5002 Online
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Post: #1
So what is the math on the NCAA bball tourney if no NCAA cut taken?
I'm sure football would still be king when it comes to paying the bills on the tv revenue side even if the NCAA didn't take money from the NCAA bball tourney but has anyone seen or calculated what value is lost by them doing this?

I figured if anyone should know it would be ACC schools.
10-11-2017 02:25 PM
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OrangeDude Offline
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RE: So what is the math on the NCAA bball tourney if no NCAA cut taken?
(10-11-2017 02:25 PM)Win5002 Wrote:  I'm sure football would still be king when it comes to paying the bills on the tv revenue side even if the NCAA didn't take money from the NCAA bball tourney but has anyone seen or calculated what value is lost by them doing this?

I figured if anyone should know it would be ACC schools.

Last numbers I recall were from 2015. The NCAA tourney that year brought in over a billion dollars in gross revenue between ad dollars and ticket sales.

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10-11-2017 03:53 PM
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Hallcity Online
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RE: So what is the math on the NCAA bball tourney if no NCAA cut taken?
(10-11-2017 02:25 PM)Win5002 Wrote:  I'm sure football would still be king when it comes to paying the bills on the tv revenue side even if the NCAA didn't take money from the NCAA bball tourney but has anyone seen or calculated what value is lost by them doing this?

I figured if anyone should know it would be ACC schools.

The NCAA has a 14 year $10.8 billion TV deal. There's also the live gate, sponsors, etc on top of that. They're probably bringing in something like a $1 billion total a year. The schools aren't getting that because something like half is being siphoned off to finance the NCAA itself. More is being siphoned off to go to raggedy ass conferences. This is in stark contrast to the football playoffs and bowl games where all of the revenue goes to the participating schools. It's set up so basketball subsidizes football.
10-11-2017 03:56 PM
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georgia_tech_swagger Offline
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RE: So what is the math on the NCAA bball tourney if no NCAA cut taken?
The short answer: The NCAA takes way way WAY more than they could possibly defend, justify, or actually earn.
10-11-2017 11:52 PM
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Hokie Mark Offline
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Post: #5
RE: So what is the math on the NCAA bball tourney if no NCAA cut taken?
The NCAA Tournament TV money alone is worth $771 million per year. Assuming everyone agrees with the current "Units" method of distributing that money (hey, at least it's merit-based!), that works out to approximately $12 million per unit.

Had the units been worth that much last year, its 19 units would've earned the ACC $229 million (instead of the estimated $32 million it will actually receive).
10-12-2017 06:31 AM
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orangefan Offline
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Post: #6
RE: So what is the math on the NCAA bball tourney if no NCAA cut taken?
Taking a looking at the NCAA's Form 990 (IRS filing for tax exempt entities) for the 2014-15 operating year, I offer the following observations.

The NCAA brought in around $900 million in revenue from $777 million in TV rights fees and $120 million from championship events (I assume ticket sales and sponsorships).

The NCAA distributed $588 million as "grants and other assistance." I assume this is the amount distributed to schools and conferences.

The NCAA incurred $116 million in expenses related to running championship events. Among other things, I assume this includes amounts paid to schools for travel related expenses to participate in the championship events.

The remaining $200 million in expenses covers the rest of the NCAA's operating costs, including salaries and benefits ($65 million), outside service providers ($25 million in outside legal fees alone - lawyers got feed their families too), Insurance ($22 million), drug testing ($5 million), and other miscellaneous expenses.

https://projects.propublica.org/nonprofi.../440567264

With respect to how the amount distributed to schools is determined, this article is helpful: http://www.ncaa.org/about/resources/medi...-academics

Of note, the Basketball Fund, which is tied to NCAA tournament results, is being deemphasized. Other funds, including the Sports Sponsorship Fund and Grants-In-Aid Fund are being increased, and a new Academic Achievement Fund has been added.
(This post was last modified: 10-12-2017 07:42 AM by orangefan.)
10-12-2017 07:41 AM
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Hokie Mark Offline
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RE: So what is the math on the NCAA bball tourney if no NCAA cut taken?
(10-12-2017 07:41 AM)orangefan Wrote:  Taking a looking at the NCAA's Form 990 (IRS filing for tax exempt entities) for the 2014-15 operating year, I offer the following observations.

The NCAA brought in around $900 million in revenue from $777 million in TV rights fees and $120 million from championship events (I assume ticket sales and sponsorships).

The NCAA distributed $588 million as "grants and other assistance." I assume this is the amount distributed to schools and conferences.

The NCAA incurred $116 million in expenses related to running championship events. Among other things, I assume this includes amounts paid to schools for travel related expenses to participate in the championship events.

I think this is one of the things being pointed out -- men's basketball is essentially paying for all NCAA sports except football (while football pays for nothing at all).

As the Duke fan says, it's set up so that basketball actually subsidizes football (since basketball funds all other sports AND pays for the NCAA - which then provides services for football).

(10-12-2017 07:41 AM)orangefan Wrote:  The remaining $200 million in expenses covers the rest of the NCAA's operating costs, including salaries and benefits ($65 million), outside service providers ($25 million in outside legal fees alone - lawyers got feed their families too), Insurance ($22 million), drug testing ($5 million), and other miscellaneous expenses.

https://projects.propublica.org/nonprofi.../440567264

With respect to how the amount distributed to schools is determined, this article is helpful: http://www.ncaa.org/about/resources/medi...-academics

Of note, the Basketball Fund, which is tied to NCAA tournament results, is being deemphasized. Other funds, including the Sports Sponsorship Fund and Grants-In-Aid Fund are being increased, and a new Academic Achievement Fund has been added.

So now what you're saying is the situation is going to get worse instead of better.
There will be less and less reward for having a great basketball program, until the sport becomes no more important (from a financial point of view) than baseball.

It stinks because it's artificial and doesn't reflect the true marketplace.

(For all you Economics majors out there, if you haven't figured it out yet there's no such thing as a free market in the real world - they are all tied up in politics to one extent or another).
10-12-2017 08:46 AM
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orangefan Offline
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RE: So what is the math on the NCAA bball tourney if no NCAA cut taken?
(10-12-2017 08:46 AM)Hokie Mark Wrote:  So now what you're saying is the situation is going to get worse instead of better.
There will be less and less reward for having a great basketball program, until the sport becomes no more important (from a financial point of view) than baseball.

It stinks because it's artificial and doesn't reflect the true marketplace.

(For all you Economics majors out there, if you haven't figured it out yet there's no such thing as a free market in the real world - they are all tied up in politics to one extent or another).

Yes and no. The ACC does very well under the Sports Sponsorship Fund and Grants-In-Aid Fund, second only to the Big Ten even on a proportional basis. Of course, it comes with the cost of offering those additional sports and scholarships. I'm sure, however, that the P5 reviewed this new Acacemic Achievement Fund and believe they will do well under it as well.
10-12-2017 10:47 AM
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