Assessing financial impact of ACC's landmark NCAA tournament

Assessing financial impact of ACC's landmark NCAA tournament


"o school gets rich off the NCAA’s basketball fund. Reach the Final Four like Duke and Kentucky? Exit the first weekend like Virginia, Hampton and VCU? Just miss qualifying like Old Dominion and Richmond?
Given the NCAA’s distributions to conferences, and subsequent trickle-down to the schools, even the largest windfalls are modest.

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That said, a league-record 15 tournament victories this postseason, and counting, plus the end of an unprecedented Final Four drought, are welcome competitive and financial developments for the ACC.
Duke’s Final Four appearance is the conference’s first since the Blue Devils’ 2010 national championship, the ACC’s longest gap since its 1953-54 debut. Talk about spoiled, ey?

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Pending Duke’s Saturday semifinal versus Michigan State and a possible title game Monday against Kentucky or Wisconsin, ACC teams are 15-5 in the tournament -- each of its six NCAA teams advanced one round, and all except Virginia won twice. The league’s previous high for wins: 14-5 in 1990 and ’93, and 14-6 in 2004 -- the Big East’s record 18 wins in 1985 continues to stand.
Here’s how such success translates financially:
Thanks to its television contracts with CBS and Turner, the NCAA shares more than $200 million annually with 32 Division I conferences, rewarding the leagues for their tournament performance over a six-season period that starts the year following a specific tournament.
Conferences earn one unit for each tournament game a member school plays through the national semifinals – the title game does not count. So last year’s grim 6-6 tournament performance earned the ACC 12 units, while this year’s netted 21 units – the total available is 132, and the Big East seized a record 24 in 2009.

Next year’s units are valued at $260,525, with incremental annual increases that put the six-year worth at approximately $1.67 million. So the ACC’s 21 units will earn the league about $35.1 million over six years.
Since the conference divides such revenue evenly among its 15 basketball-playing members, everyone will earn approximately $2.34 million, or about $390,000 annually for six years, thanks to this month’s collective excellence.
With major athletic department budgets approaching and exceeding $100 million, that’s hardly cause for a kegger in accounting. But it’s sure better than in previous years.
Another way to examine the basketball fund’s impact is to measure it as a percentage of the conference’s revenue. Based on its federal tax returns, here is the ACC’s total revenue and NCAA basketball revenue for the 2007-08 through 2012-13 fiscal years – 2012-13 is the latest available tax filing:
FISCAL YEAR       TOTAL   HOOPS %
2007-08                $162.8   $15.1     9.3
2008-09                $172.7   $15.9     9.2
2009-10                $158.2   $18.2     11.5
2010-11                $167.2   $18.2     10.9
2011-12                $223.6   $17.7     7.9
2012-13                $232.4   $18.2     7.8
As you can see, as ACC revenue increased markedly in the wake of football-fueled television contracts, basketball tournament payouts remained flat, becoming an even smaller slice of the budget.
The NCAA will announce 2013-14 basketball fund distributions next month, but it’s easy to calculate what the ACC will receive not only then but in 2014-15 and 2015-16 as well.
With 70 accrued units from 2008-13, the league will net about $17.5 million. The following two years will be approximately $19.3 million and $21.5 million, respectively. Remember, that money is divided among 15 schools.
All those numbers pale to the $146.6 million the ACC from television and $36.7 million from football bowl games in 2012-13.
The College Football Playoff further dwarfs basketball money. With Florida State qualifying for last season’s inaugural CFP, the ACC received about $56 million.
One final comparison, that among the five power conferences. The NCAA’s 2013-14 Revenue Distribution Plan details payouts to leagues from 2008-09 to 2012-13, and the ACC ranked second among the five in basketball fund receipts over those five years.
The Big 12 led at $91.6 million, followed by the ACC’s $88.2 million, Big Ten’s $86.1 million, Southeastern Conference’s $77.8 million and Pacific 12’s $74.8 million."