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What conferences subsidize / enable the NCAA
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Wahoowa84 Offline
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What conferences subsidize / enable the NCAA
The discussion about a potential breakaway from the NCAA, begs the question of how to quantify which conferences have the most financial incentive to change the current distribution methodology. In other words, which conferences are most egregiously subsidizing the NCAA’s dysfunctional revenue distribution scheme.

First, I analyzed the results from the last four NCAA Men’s Basketball Tournament (2016, 2017, 2017 & 2018) to determine the 1) Average Annual Earned Units and 2) Distribution of Total Earned Units...

ACC - 21 average earned units (15.9% of total)
BIG - 16 (12.1%)
B12 - 15.3 (11.6%)
SEC - 14.3 (10.8%)
Big East - 11.5 (8.7%)...note that UConn was included within BE In this calculation
PAC - 8.8 (6.6%)
Other - 45.3% (34.3%)

Then, I developed a different revenue distribution method that rewards teams more for advancing further in the tournament. Specifically, doubling the earned units for advancing each round...including advancing to the championship game. Using the last four years results, the distribution of revenue would be:

ACC - 24.2%
B12 - 14.9%
BIG - 13.4%
Big East - 12.0%
SEC - 11.0%
PAC - 5.4%
Other - 19.1%

Under this theoretical distribution change, the conferences with the largest potential windfalls are the ACC (8.3% gain in distribution...from 15.9% to 24.2%), Big East (3.3% gain) and B12 (3.3% gain...on a larger base than the BE). This is not surprising given that Nova (2x), UNC (2x), UVA and Texas Tech have played in recent championship games.
06-02-2020 09:38 PM
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BruceMcF Offline
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RE: What conferences subsidize / enable the NCAA
(06-02-2020 09:38 PM)Wahoowa84 Wrote:  The discussion about a potential breakaway from the NCAA, begs the question of how to quantify which conferences have the most financial incentive to change the current distribution methodology.
Well, it raises the question in any event (It doesn't actually make the conclusions follow directly from the assumptions, with the supposed argument just the means for revealing the built in conclusion.)

Quote: In other words, which conferences are most egregiously subsidizing the NCAA’s dysfunctional revenue distribution scheme.

First, I analyzed the results from the last four NCAA Men’s Basketball Tournament (2016, 2017, 2017 & 2018) to determine the 1) Average Annual Earned Units and 2) Distribution of Total Earned Units...

ACC - 21 average earned units (15.9% of total)
BIG - 16 (12.1%)
B12 - 15.3 (11.6%)
SEC - 14.3 (10.8%)
Big East - 11.5 (8.7%)...note that UConn was included within BE In this calculation
PAC - 8.8 (6.6%)
Other - 45.3% (34.3%)

Now multiply that by 30%, which is the team pool out of the actual money.

ACC - 4.77%
BIG - 3.63%
B12 - 3.48%
SEC - 3.24%
Big East - 2.61% (note that UConn was included within BE In this calculation)
PAC - 2.64%
Other - 10.29%

Compare this to a hypothetical tournament with the same media value but the schools receiving an 80% share:

ACC - 12.72%
BIG - 9.68%
B12 - 9.28%
SEC - 8.64%
Big East - 6.96% {incl. UConn}
PAC - 5.28%
Other - 27.44%

The difference swamps any tinkering with the formula on how to distribute 30% of the media revenue.

Supposing that the contract is $800m, and supposing equal distributions, that is:

B12 - $7.4m/school
ACC - $7.3m/school
BIG - $5.5m/school
Big East - $5.1m/school
SEC - $4.9m/school
PAC - $3.0m/school
06-03-2020 12:54 AM
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Stugray2 Offline
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RE: What conferences subsidize / enable the NCAA
LOL, the P12 was going to get 6 teams in the tourney this year, some said 7, so they would have jumped up a a good $1m per school in your calculations. But COVID hit
06-03-2020 02:40 AM
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Wahoowa84 Offline
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RE: What conferences subsidize / enable the NCAA
These calculations are all conference averages. Where the money actually gets seriously larger is if the individual blue blood schools start doing these analytics. Duke, UNC, Kansas and/or Kentucky can be to college basketball what UGA and OU did in the early 1980s. Currently, the NCAA distributes tournament revenues to the conferences.
06-03-2020 04:44 AM
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BruceMcF Offline
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RE: What conferences subsidize / enable the NCAA
(06-03-2020 04:44 AM)Wahoowa84 Wrote:  These calculations are all conference averages. Where the money actually gets seriously larger is if the individual blue blood schools start doing these analytics. Duke, UNC, Kansas and/or Kentucky can be to college basketball what UGA and OU did in the early 1980s. Currently, the NCAA distributes tournament revenues to the conferences.

That's an average there ... indeed, the P5 could set up whatever arrangement they wanted for the "ACAA" distribution ... it could have some percentage go to the school and some percentage go to the conference, if it wished, in which case the dollar on the above percentages but an 80% share would only be averages, they would not be the per school payouts ... if they split it 50:50, with the conference share bumped by 10% to 40% and set the school share to 40%, that would accumulate to a quite substantial amount to the schools making regular deep runs in the tournament.

Of course, if a conference wanted to make it a condition that the "school" share be tipped into the common pot, that would be up to the conference, it'd be none of the "ACAA's" business.
(This post was last modified: 06-03-2020 10:39 AM by BruceMcF.)
06-03-2020 10:19 AM
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Captain Bearcat Offline
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RE: What conferences subsidize / enable the NCAA
(06-03-2020 12:54 AM)BruceMcF Wrote:  
(06-02-2020 09:38 PM)Wahoowa84 Wrote:  The discussion about a potential breakaway from the NCAA, begs the question of how to quantify which conferences have the most financial incentive to change the current distribution methodology.
Well, it raises the question in any event (It doesn't actually make the conclusions follow directly from the assumptions, with the supposed argument just the means for revealing the built in conclusion.)

Quote: In other words, which conferences are most egregiously subsidizing the NCAA’s dysfunctional revenue distribution scheme.

First, I analyzed the results from the last four NCAA Men’s Basketball Tournament (2016, 2017, 2017 & 2018) to determine the 1) Average Annual Earned Units and 2) Distribution of Total Earned Units...

ACC - 21 average earned units (15.9% of total)
BIG - 16 (12.1%)
B12 - 15.3 (11.6%)
SEC - 14.3 (10.8%)
Big East - 11.5 (8.7%)...note that UConn was included within BE In this calculation
PAC - 8.8 (6.6%)
Other - 45.3% (34.3%)

Now multiply that by 30%, which is the team pool out of the actual money.

ACC - 4.77%
BIG - 3.63%
B12 - 3.48%
SEC - 3.24%
Big East - 2.61% (note that UConn was included within BE In this calculation)
PAC - 2.64%
Other - 10.29%

Compare this to a hypothetical tournament with the same media value but the schools receiving an 80% share:

ACC - 12.72%
BIG - 9.68%
B12 - 9.28%
SEC - 8.64%
Big East - 6.96% {incl. UConn}
PAC - 5.28%
Other - 27.44%

The difference swamps any tinkering with the formula on how to distribute 30% of the media revenue.

Supposing that the contract is $800m, and supposing equal distributions, that is:

B12 - $7.4m/school
ACC - $7.3m/school
BIG - $5.5m/school
Big East - $5.1m/school
SEC - $4.9m/school
PAC - $3.0m/school


This.

So the ACC would get $102 million, which is much bigger than their annual football bowl revenue.

Total ACC revenue in 2017-18 was $464.7 million. About $38 million of that was NCAA tourney credits. So redistribution would boost the ACC by about $64 million

The NCAA tournament alone would be 20% of total ACC conference revenue.

Similarly, for the Big 12, the NCAA tournament would be 17% of their total revenue.

And much like football, the better teams would be more desirable as they earn a dominant share of that pie. So in conference realignment, it would boost the value of Kansas to be greater than Nebraska. It would boost the value of UConn to be greater than West Virginia, Virginia Tech, or Miami.
06-03-2020 12:46 PM
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Scoochpooch1 Offline
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RE: What conferences subsidize / enable the NCAA
(06-03-2020 02:40 AM)Stugray2 Wrote:  LOL, the P12 was going to get 6 teams in the tourney this year, some said 7, so they would have jumped up a a good $1m per school in your calculations. But COVID hit

Though, they would have all lost in the first round anyway.
06-03-2020 01:44 PM
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orangefan Offline
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RE: What conferences subsidize / enable the NCAA
The Basketball Fund is only one of the funds used by the NCAA to distribute money to schools. Only around 30% is distributed based on NCAA tournament performance. The rest is distributed based on variety of metrics, including the number of sports sponsored, the number of scholarships offered, an "equal conference fund", and various others. Some of these give stronger preference to P5 conferences, which tend to offer more scholarships and sponsor more sports than other NCAA members. However, given that the NCAA Tournament is the dominant source of NCAA revenues and the value that the P5 and a select few other conferences contribute to NCAA Tournament viewership and attendance, these factors still likely distribute a disproportionate share of revenues to smaller conferences.

This link shows the pre-Covid NCAA distribution plan for 2020: https://ncaaorg.s3.amazonaws.com/ncaa/fi...stPlan.pdf

There is no question that if the P5 and a small group of strong basketball conferences, the Big East, AAC, MWC and perhaps the A10, WAC and MVC, withdrew from the NCAA, they could increase the payout that they receive from their annual national championship tournament versus their current distributions from the NCAA. This would arguably be a very risky step politically, as it would substantially reduce revenues received by hundreds of colleges, not just in the form of fund distributions, but also support for the cost of running and participating in national championship events. It may place congress in the position of having to choose to help P5 members and hundreds of smaller schools in each of their respective districts.
06-03-2020 02:13 PM
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dbackjon Offline
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RE: What conferences subsidize / enable the NCAA
(06-03-2020 02:13 PM)orangefan Wrote:  The Basketball Fund is only one of the funds used by the NCAA to distribute money to schools. Only around 30% is distributed based on NCAA tournament performance. The rest is distributed based on variety of metrics, including the number of sports sponsored, the number of scholarships offered, an "equal conference fund", and various others. Some of these give stronger preference to P5 conferences, which tend to offer more scholarships and sponsor more sports than other NCAA members. However, given that the NCAA Tournament is the dominant source of NCAA revenues and the value that the P5 and a select few other conferences contribute to NCAA Tournament viewership and attendance, these factors still likely distribute a disproportionate share of revenues to smaller conferences.

This link shows the pre-Covid NCAA distribution plan for 2020: https://ncaaorg.s3.amazonaws.com/ncaa/fi...stPlan.pdf

There is no question that if the P5 and a small group of strong basketball conferences, the Big East, AAC, MWC and perhaps the A10, WAC and MVC, withdrew from the NCAA, they could increase the payout that they receive from their annual national championship tournament versus their current distributions from the NCAA. This would arguably be a very risky step politically, as it would substantially reduce revenues received by hundreds of colleges, not just in the form of fund distributions, but also support for the cost of running and participating in national championship events. It may place congress in the position of having to choose to help P5 members and hundreds of smaller schools in each of their respective districts.


The first part is an important aspect that some seem to ignore - that the P5 derive no benefit or value from the remaining 70% of the income and are basing their projections on the whole 70% being a "gain". Would there be a gain, yes (although I very much question that the tournament value would stay the same) - but you have to account for all the other funds the NCAA distributes to schools and the cost of the other sports DI championships that presumably a new association would have to put on (or, pay dues to another body to put them on).
06-03-2020 02:19 PM
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Wahoowa84 Offline
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RE: What conferences subsidize / enable the NCAA
(06-03-2020 02:19 PM)dbackjon Wrote:  
(06-03-2020 02:13 PM)orangefan Wrote:  There is no question that if the P5 and a small group of strong basketball conferences, the Big East, AAC, MWC and perhaps the A10, WAC and MVC, withdrew from the NCAA, they could increase the payout that they receive from their annual national championship tournament versus their current distributions from the NCAA. This would arguably be a very risky step politically, as it would substantially reduce revenues received by hundreds of colleges, not just in the form of fund distributions, but also support for the cost of running and participating in national championship events. It may place congress in the position of having to choose to help P5 members and hundreds of smaller schools in each of their respective districts.


The first part is an important aspect that some seem to ignore - that the P5 derive no benefit or value from the remaining 70% of the income and are basing their projections on the whole 70% being a "gain". Would there be a gain, yes (although I very much question that the tournament value would stay the same) - but you have to account for all the other funds the NCAA distributes to schools and the cost of the other sports DI championships that presumably a new association would have to put on (or, pay dues to another body to put them on).

Not at all convinced that a breakaway would actually lose value. TV executives should be able to value a breakaway post-season tournament. If the breakaway included the P5 plus Big East plus 15-20 interested mid-majors (e.g., Gonzaga, Memphis, Houston, Temple, et al), then the breakaway group literally includes the overwhelming majority of teams that make the second round of the Tournament. During the past four years, the Tournament has averaged only 3 likely “excluded” programs in the second round per year:

2016: Hawaii, Yale, Northern Iowa and Stephen F Austin
2017: Rhode Island and Middle Tennessee
2018: UMBC, Loyola-Chicago and Marshall
2019: Liberty, Murray State and UC Irvine

The Cinderella story-line may need to be modified. When Nova beat UNC in the 2016 classic, Nova came across as David slaying Goliath. TV may actually be able to create more drama in a breakaway.
06-03-2020 05:11 PM
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