Monday, March 29

It's All About The Units

Without a doubt the biggest winners of the college basketball weekend were the Final Four teams, but that is just in the competitive side of the sport. As we have all learned when it comes to college sports the money is the most influential element. That is why more people than just the quartet of teams have cause to celebrate about the way the tournament has unfolded. The NCAA has run an ad campaign this year about the amount of money being put back into their membership programs; in the commercial they claim it is 97% and while some may be dubious upon that amount it is roughly accurate. As people often need reminding the NCAA is an organization that is comprised of the member colleges and those colleges dictate the rules by which the organization operates. In the NCAA tournament, more than school pride is at stake for the teams and their conferences. There is a lot of money to be won.

While we know that college football is king when it comes to the ability to generate revenue through the bowl system, that is not an NCAA sponsored enterprise. Like the NCAA though the bowls enjoy tax exempt status but that is a story for another day. The bowl payouts are distributed to the conferences which almost all spread it evenly among their membership institutions. When it comes to the basketball tournament each team begins with a reward and those that advance earn extra rewards. Read rewards as cash. The more a team wins, the more money it gets for its conference which earns them extra money in turn. While the players and coaches are focused on winning in the hopes of raising the trophy at the end, everyone is essentially playing for money.

This money comes in the forms of units. Each team earns its conference a unit for appearing in the tournament. The worth of a unit changes each year depending on the total revenue but it is divided equally amongst the participants. This year a unit is worth $222,502. That means every team participating in this year's tournament, all 65 started off earning that. Yes those cringes and hung heads on Selection Sunday were not just from coaches and players, but school administrators as well. For each additional win, a school earns its conference another unit.

In this economy(!) even the big conferences view this as more than just a drop in the bucket, especially since they have multiple bids. The units are paid out based how many have been accrued on a rolling six year schedule. So if a conference makes a deep run or has multiple bids, a school can add a nice source of income over the next six years.

The smaller schools typically can expect 1 unit each year, 2 if their team manages to win their first round game. Look at Arkansas Pine-Bluff; many would think they would be upset to get into opening round game since some people consider it the play-in game. However, APB got a unit for appearing in that game AND another won for winning it and facing Duke. For one of the lowest rated teams in the tournament, they earned the SWAC $445,004 this year and those units are added to whatever they accrue for the next six years. For the next 5 years, any units the SWAC generates will be added to this year's total and paid out each year.

That is why the Horizon League had to be doing summersaults on Saturday. While Butler has earned the Horizon League a fair amount of units in the past, this year marked the first time they advance to an Elite 8 and Final Four. The Bulldogs have already earned 5 units out of a possible 6 (there is no extra unit if you win, but there is the thrill of being national champions) and reached the Final Four in their hometown of Indianapolis. Did I mention that they and the Horizon League are the official hosts of the Final Four?

Thanks to Butler, the Horizon league added $1,112,510 to the pot. They could add another unit if they beat Michigan State on Saturday. If the Horizon League evenly distributes their money, that is $111,251 per school. If you were to imagine a Horizon League team bowing out in the first round, say if Butler lost to UTEP like many (/covers face) they would get just $22,250.20 for each school in the league.

Now of course we come to the big leagues. According to this, the Big Ten earned 69 units in the previous pay cycle. That earned each school in the conference $1,395,692. They earned $1,863,000 in football bowl money this year as well. Obviously we can see the big 6 conferences have extra incentive to get as many bids as possible. The Big East's success in the tourney is debatable; West Virginia made the Final Four (3rd year in a row for the conference), only they got past the Sweet 16, the 1 seed Syracuse was upset, Villanova got lucky against Robert Morris and then bowed out in the 2nd round. What is not debatable is the Big East racking up huge money from the tournament the last few years. Granted the Big East is a huge 16 team behemoth. The conference entered the tournament with 8 teams. That is $1,780,016 for the conference without taking a dribble. Even with teams struggling and leaving in the first round, some unceremoniously (Georgetown), they still managed 8 more units which doubles their money. So far in this year's tournament alone the Big East has netted $3,560,032.

So whether the money received is a drop in the bucket for a conference and their respective athletic departments or a big payday for smaller programs, there is a lot more money to be won in the NCAA tournament than eternal glory. Memphis recently felt the sting of playing the 2008 tournament with an ineligible player. For the SAT-Derrick Rose situation, not only was the school forced to vacate the wins that led them to the title game where they lost in overtime to Kansas, but they had to return all their tournament revenue from that year. It totaled approximately $615,000 so it is no wonder the school is suing Calipari to get his $350,000 worht of bonuses back. With the possibility of expansion and changing networks, the revenues may change in the coming years, but it is likely the system will remain the same.

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