Loyola University Chicago’s unexpected march to college basketball’s Final Four will have financial reverberations well beyond its urban lakeside campus. Nine other schools—including three in Indiana—stand to make money off its Cinderella run.
The Loyola Ramblers’ March Madness success has earned $8.5 million for their 10-team Missouri Valley Conference, to be paid out by the NCAA over the next six years. That amounts to roughly $140,000 per school, per year—more than any of the universities make annually from the conference’s media deal with ESPN.
Among those conference members are Indiana State University, Valparaiso University and the University of Evansville.
The financial boost comes at a time when state budgets across the country are shrinking funding for many public schools and athletic programs at private schools face stiff competition for dollars from academics. That makes tournament money critical in filling the gaps for these teams.
"It’s transformational," said Evansville Athletic Director Mark Spencer, who oversees an $11 million sports budget for the Indiana school. "It’s a revenue stream for us to build our entire budget on, and maybe even make some one-time capital improvements that wouldn’t have been possible without it."
Other schools in the conference are Southern Illinois, Drake, Bradley, Missouri State, Illinois State and Northern Iowa.
The No. 11 seed in the South Region, Loyola became a fan favorite thanks to its late-game heroics and super fan Sister Jean, a 98-year-old nun who’s become a national sensation. The team won its first three tournament games by a combined four points and became the worst seed to reach the Final Four since No. 11 Virginia Commonwealth in 2011. Before the tournament started, the Ramblers had 250-1 odds to win the national title. They’re now at 9-1.
The NCAA has a complex way of rewarding teams for their tournament success. In simple terms, for every tournament game a school plays, not including the championship, the NCAA rewards that team’s conference with about $1.7 million, paid out over six years. Regardless of how well the Ramblers perform in the Final Four this weekend, they’ll have clinched about $8.5 million for their conference.
That’s a drop in the bucket for bigger leagues like the Atlantic Coast Conference, which make $375 million in annual revenue fueled primarily by college football. But for the Missouri Valley, which doesn’t offer top-tier football, it’s a windfall. About 65 percent of the conference’s revenue comes from successes in the NCAA tournament, so winning runs like Loyola’s go a long way toward establishing a steady future for the whole league.
"It gives us confidence in planning long term," said Southern Illinois University Athletic Director Tommy Bell, whose Salukis lost twice to the Ramblers this year. "Knowing we don’t have to go somewhere else to balance the budget, knowing we have this money coming in from Loyola, that gives us a lot more stability."
This is the Missouri Valley’s first season without Wichita State University, the school that’s been its primary money-maker over the past decade. The Shockers joined the American Athletic Conference in July, a departure that left many in college basketball wondering whether the Missouri Valley’s national success might fade. Wichita State and Creighton University, which left for the Big East Conference in 2013, accounted for 20 of the Missouri Valley’s last 24 tournament games.
"This was a critical year, not only for how we’re perceived from the outside looking in, but also how we perceive ourselves," Missouri Valley Conference Commissioner Doug Elgin said. "Loyola has earned $8.5 million for the conference, but the true value can’t be put in dollars and cents. It’s reputation, recognition and national perception."
The Missouri Valley pulls in about $11 million in annual revenue, comprised mainly of March Madness payouts, with other money coming from its conference tournaments, a television deal with ESPN and a multimedia rights deal with sports marketer Learfield. Thanks largely to Wichita State’s past successes, the conference will distribute a record $6.4 million in NCAA tournament monies for 2018. Next year’s total, the first to include Loyola-Chicago’s winnings, will be even higher.
Conferences can choose how to divvy up the money they make from NCAA tournament success. The Missouri Valley chooses to reimburse its tournament representative’s travel costs, then divide the money evenly, meaning Loyola will see roughly the same amount as Missouri State or Southern Illinois. For some in the conference, the annual distribution is equivalent to the revenue it gets from ticket sales, or licensing and sponsorships.
"The way the NCAA tournament pays out, you have to keep replacing your tournament wins," Evansville’s Spencer said. "A down year creates big financial swings across the board. This will help boost us for a sustainable amount of time."