About The Ncaa Shares...

[MeanGreenBuzz]

Since WKU and USA went to the tournament we get 2 shares. Now that WKU has won that adds 1 more share or do the upper rounds count for more shares of the revenue?

[Spaceraider]

Since WKU and USA went to the tournament we get 2 shares. Now that WKU has won that adds 1 more share or do the upper rounds count for more shares of the revenue?

my understanding is that one game = one unit, right now we're going to see at least three units, 2nd round units are no larger than 1st round units, Championship game unit no larger than sweet sixteen unit, etc...

[MeanGreenBuzz]

my understanding is that one game = one unit, right now we're going to see at least three units, 2nd round units are no larger than 1st round units, Championship game unit no larger than sweet sixteen unit, etc...

cool thanks!

[Arkstfan]

cool thanks!

It is expected that a unit will be worth $190,000 this year.

At the end of the year (fiscal year I think) each conference gets a check based on the number of units earned the past six years.

We would have received $1,140,000 if this had been like every other season of late. Because we were one and done all those years.

USA's at-large bid raised that to $1,330,000.

WKU's win over Drake raised it to $1,520,000.

WKU's win over San Diego raised it to $1,710,000.

So even if WKU loses the next game and we go back to being one and done and the value of units does not increase, the Sun Belt will receive just under $600,000 more per year for six years. Over the next six years, this season's performance will be worth $3.4 million for the Sun Belt.

[GoMeanGreen1999]

It is expected that a unit will be worth $190,000 this year.

At the end of the year (fiscal year I think) each conference gets a check based on the number of units earned the past six years.

We would have received $1,140,000 if this had been like every other season of late. Because we were one and done all those years.

USA's at-large bid raised that to $1,330,000.

WKU's win over Drake raised it to $1,520,000.

WKU's win over San Diego raised it to $1,710,000.

So even if WKU loses the next game and we go back to being one and done and the value of units does not increase, the Sun Belt will receive just under $600,000 more per year for six years. Over the next six years, this season's performance will be worth $3.4 million for the Sun Belt.

Very interesting numbers. Thanks for that work on this post.

[MeanGreenBuzz]

It is expected that a unit will be worth $190,000 this year.

At the end of the year (fiscal year I think) each conference gets a check based on the number of units earned the past six years.

We would have received $1,140,000 if this had been like every other season of late. Because we were one and done all those years.

USA's at-large bid raised that to $1,330,000.

WKU's win over Drake raised it to $1,520,000.

WKU's win over San Diego raised it to $1,710,000.

So even if WKU loses the next game and we go back to being one and done and the value of units does not increase, the Sun Belt will receive just under $600,000 more per year for six years. Over the next six years, this season's performance will be worth $3.4 million for the Sun Belt.

Wow thats a lot of money! Thanks for the figures. I always thought it was just a one year thing and that after the season was over it didn't affect us anymore. GO WKU and USA!

[Arkstfan]

Wow thats a lot of money! Thanks for the figures. I always thought it was just a one year thing and that after the season was over it didn't affect us anymore. GO WKU and USA!

This is one place where the NCAA gets it right.

With the BCS, you get your money but a lot of it is one time money so you can't make long-term plans with it and pretty much just need to spend it now.

With the NCAA, a good year provides benefits for six years making long-term budgeting easier to do.

[FirefightnRick]

This is one place where the NCAA gets it right.

With the BCS, you get your money but a lot of it is one time money so you can't make long-term plans with it and pretty much just need to spend it now.

With the NCAA, a good year provides benefits for six years making long-term budgeting easier to do.

What is the deal with it being over a 6 year period? Just spaced out instead of lump summing it?

Rick

[CMJ]

What is the deal with it being over a 6 year period? Just spaced out instead of lump summing it?

Rick

Here's the way I understand it. Leagues get units for every team in and round they advance to over a 6 year basis. So, for instance the Sunbelt previous to this year was one and done. So that's 5 units.This year with USA and WKU we'll have at least 4 units(USA with 1 and WKU with 3). So that means this year we'll have 9 units of payout. But when next year rolls around(and the 4 after that), because of the rotating nature of the payments those 4 units from this year will also be included, no matter if the Belt is one and done or not.

That's why a conference can really build itself if a school gets deep into the NCAA's continually...the whole conference can reap benefits for 6-7 or more years. I think that's why the WCC has gotten so much more credibility. Gonzaga has made that conference a helluva lot of money in the last 9 years with the deep runs they've had.

Edited March 26, 2008 by CMJ

[Arkstfan]

I don't know why the decision was made to spread it over six years but it brings stability.

If it were done as an annual lump sum, a unit would be worth $1,140,000. If the value of a unit remainded stable (it tends to rise) last year would have gotten that amount and assuming UCLA upsets WKU the conference would get $4,560,000 this year. If we went back to one and done next year that number would fall back to $1.14 million.

Under the current unit system the Sun Belt would have received $1.14 million last year (1 unit per year over six years = 6 units). This year will receive $1,710,000 and if we go back to one and done will receive that figure for a total of six years before the number falls.

My guess is that most conferences would rather have the current system because it makes it easier to budget long-term.

[FirefightnRick]

Ok, so so make it easier we could just think of the payments as "installments" rather than "units"? When you enter the NCAA, regardless of how far you go, the money earned is paid to the conference in 6 installments. One for that year entered, then one for the next 5 years.

Rick

[SCREAMING EAGLE-66]

my understanding is that one game = one unit, right now we're going to see at least three units, 2nd round units are no larger than 1st round units, Championship game unit no larger than sweet sixteen unit, etc...

Looks like four units to me...WKU play their third game this week and SAU played one in first round.

[DeepGreen]

I'm a newbie when it comes to units, etc., so bare with me. The money comes from TV, etc.? Is that correct? If so, the TV boys pay this money to the NCAA each year, lump sum? Yes? The NCAA holds on to tens of millions of dollars at any given time and dowls out some amount to each conference. Yes? So the NCAA reaps the interest, or some form of investment, on the TV money that has not been given to conferences?

[Arkstfan]

I'm a newbie when it comes to units, etc., so bare with me. The money comes from TV, etc.? Is that correct? If so, the TV boys pay this money to the NCAA each year, lump sum? Yes? The NCAA holds on to tens of millions of dollars at any given time and dowls out some amount to each conference. Yes? So the NCAA reaps the interest, or some form of investment, on the TV money that has not been given to conferences?

No.

The NCAA gets part of the money from ticket sales but most from TV and marketing rights.

CBS doesn't pay the NCAA say $300 million that the NCAA doles out one-sixth at a time each year. There isn't $250 million sitting in an account waiting to be sent out in the future.

What happens is that the NCAA pays out the entire amount of money allocated for revenue sharing each year the amount going to a particular conference is based on the number of units owned.

If the NCAA signs more lucrative sponsorship deals for next season, the value of a share rises. If Pontiac and Coke suddenly went bankrupt and didn't pay their sponsorship money, the value of a unit falls.

The current deal the NCAA has with CBS guarantees a minimum amount will be paid every year through 2014 with the minimum payment rising every year. The amount paid can increase because CBS handles the sales of the corporate sponsor deal (corporate champion for the really big players) if the amount brought in is greater than anticipated, the NCAA gets a little extra juice on the deal.

This is one of the positives of the six year payout. Let's say this year's money to the NCAA available for distribution based on basketball is around $136 million. Under a BCS type payout the Sun Belt would get $1.14 million per unit with nothing guaranteed next year except one unit. We potentially would fall from $4.56 million this year to the value of one unit next year.

Here's the beauty of the deal. Under the NCAA system, a unit might very well rise next season from $190,000 to $200,000. If we are one and done next year we would have 9 units (5 one and done and 4 this year). Total payout would be $1.8 million. Under a BCS style arrangement if we were one and done next year we would get $1.2 million.

The unit system buys you into the future growth of the contract. Success today means you get a greater share in the future as the value of the contract grows.

[GrandGreen]

It is great to have this additional money, but it really is not that much when you consider that it is shared by 13 universites.

[CMJ]

It's more than most schools get for Bowl trips after covering expenses and dividing it up between conference members.

[Arkstfan]

It is great to have this additional money, but it really is not that much when you consider that it is shared by 13 universites.

Depends on what you do with it. Feed it back in 13 pieces and it isn't much. Keep it bundled together and it is buying power.

When Troy made the Silicon Valley Bowl the only available teams were a MAC rematch or Troy. When MT made the Motor City they were the only available team left.

In each case there were other opportunities that could have been pursued but the Sun Belt didn't have the money. The MAC ended up paying the Silicon double what the Sun Belt did because they locked their spot up weeks earlier. When the MAC got in the I-Bowlthe payout was $1.2 million. My understanding is that the MAC guaranteed that their team would buy 10,000 tickets at $40 each so that leaves an $800,000 profit before travel expenses right? Wrong. The MAC "hired" the Independence Bowl to "market" the MAC in the Ark-La-Tex region for around $700,000. The trip was a real money loser because they didn't sell tix for jack.

The money from this NCAA run means that the Sun Belt can hold back $200,000 and any time a bowl contract is up for renegotiation (almost all expire in 2009) or if a bowl is short a team and looking for someone to fill in, the Sun Belt can walk in with whatever offer they used to make and up it by 5,000 tickets at $40 each.

My understanding is that the MAC agrees to buy 7,500 tickets for the GMAC at $45 each. That contract expires I think after the 2009 game. So what happens if the Sun Belt members sit down with pen to paper and make the decision that they will offer to buy 8,000 tickets from the GMAC? The school making the game will be on the hook for the first 3,500 tickets at $45 each with the conference guaranteeing the purchase of the next 4,500 tickets. If the school sells all 8,000 tickets, awesome no need to tap into the money. If the school sells 5,000 tickets then the conference writes a check for $135,000 to cover the unsold 3,000.

[Arkstfan]

It's more than most schools get for Bowl trips after covering expenses and dividing it up between conference members.

I was just looking at an article about Bowling Green, it appeared they were going to have to cut a check for nearly $300,000 for unsold GMAC tickets unless there was a late run on tickets.