When March Madness gets under way Tuesday, the conferences with the most teams in the NCAA Tournament stand to make the most money thanks to a “unit” system that rewards success.

The NCAA distributes a portion of its revenues to member conferences based on how their schools do in the men’s basketball tournament. Those payments are determined by “units,” which are earned for each game a school plays, not including the National Championship. Each of the 132 units up for grabs are worth about $2 million, according to Sportico. Conferences distribute the money, which is paid out over six years, to their schools.

The NCAA, which brings in about $900 million in annual media rights fees from CBS and Warner Bros. Discovery, allocates payment units to all 32 conferences with teams in the field, with additional units for at-large bids, and any schools advancing to subsequent rounds up until the Final Four, according to Front Office Sports. Presumably, that amounts to $264 million up for grabs — about $128 million based on 64 available units this month and the $136 million already set for the 68 tournament teams.

Conferences want to see as many of their schools in the Big Dance as possible to raise the payout they receive. For smaller, lesser-known conferences, that money can represent a major portion of their annual revenue. When a Cinderella team makes it through multiple rounds, the payout can provide a much-needed infusion of cash to its conference

In 2023, SEC teams played in 17 tournament games and earned the highest estimated payout of $34 million, according to Sportico. Big 12 teams were next, playing in 16 games and earning an estimated $32 million. This year, the SEC and the Big 12 both have eight teams in the tournament.

Money coming our way

Here’s where things stand for conferences this year, per Front Office Sports, based on how many teams they have in the field and the estimated amount of money they are already guaranteed:

• Big 12: 8 bids, $16 million.
• SEC: 8 bids, $16 million.
• Big Ten: 6 bids, $12 million.
• Mountain West: 6 bids, $12 million.
• ACC: 5 bids, $10 million.
• Pac-12: 4 bids, $8 million.
• Big East: 3 bids, $6 million.
• American: 2 bids, $4 million.
• Atlantic 10: 2 bids, $4 million.
• WCC: 2 bids, $4 million.

The remaining 22 conferences are guaranteed $2 million each for their sole tournament bids. The financial stakes are particularly big for mid-major conferences that are able to land additional at-large berths beyond their conference champions. For years, a debate has raged inside college basketball as to whether it’s better to see a lesser-tier team from a Power 5 conference get one of the final tournament slots versus a top-performing one from a mid-major. And with the massive changes in college sports, it’s becoming harder for mid-majors to land a bid, per Front Office Sports.

SEC commissioner Greg Sankey told ESPN last week that he now favors potentially eliminating automatic qualifiers for smaller conferences, particularly in the wake of Power 5 conference expansion.

“We are giving away highly competitive opportunities for automatic qualifiers (from smaller conferences), and I think that pressure is going to rise as we have more competitive basketball leagues at the top end because of expansion,” Sankey said.

How conference realignment impacts payouts

Conference realignment also factors into how much money leagues will take from the NCAA Tournament.

The Pac-12 has four teams in the field but starting in July, only Oregon State and Washington State will be around as members. Those schools control all of the conference’s assets as the result of a settlement in a lawsuit against the conference and its departing members last fall.

Oregon, which is headed to the Big Ten next year, won the final Pac-12 title, earning the league’s automatic qualifier spot. If Oregon advances beyond the first round, every unit it earns will stay with the Pac-12, Front Office Sports reported. Future Big 12 members Arizona and Colorado, two at-large teams, have already earned one unit apiece for their soon-to-be-old conference, and they’ll continue to earn more if they survive and advance. Those payouts will come over the next six years — a timetable that could conceivably stretch beyond the conference’s existence. The Pac-12 can count on units from Washington State, which also made the tournament.