Expanded Basketball Tournaments Will Yield NCAA $50M a Year

The NCAA finalized a decision Thursday to expand both the Division I men’s and women’s basketball tournaments to 76 teams. The new bracket will start this upcoming season.

As part of the agreement, the NCAA will receive additional revenue through its corporate sponsorship deal with CBS and TNT, which sells all sponsorships for NCAA championships in addition to the men’s tournament (for which it also has the media rights). Through this program, CBS and TNT have committed to paying the NCAA $50 million annually between now and 2032. The NCAA has agreed to open up previously restricted categories of sponsorship revenue: beer, wine, spirits, and hard seltzer.

The deal guarantees the NCAA will be able to cover additional operating expenses. It will also help the NCAA continue its “units,” or prize payouts system, which will distribute about $130 million worth of additional revenue over the next six years thanks to the additional revenue from CBS and TNT.

“After accounting for expenses, the projected surplus will primarily be used to continue investing in the basketball tournaments and enhancing the NCAA championship experience for all student-athletes,” the NCAA said in a press release.

The governing body has been exploring expansion for multiple years, but conversations moved slowly in part because of the potential financial implications of the deal. Both the media rights contracts for the men’s and women’s tournament (which is part of a large media package between the NCAA with ESPN) stipulate that networks were not required to pay extra for the additional games if the tournament expanded during the lifetime of these deals (until 2032).

But the corporate sponsorship agreement appears to have been a way for all parties to reach  agreement.

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