(Bloomberg) – Twenty five years ago, the NCAA decided something had to be done about March Madness money. The year before, CBS agreed to pay a record $1 billion to broadcast the 1991-1997 tournaments. That was fine with the powerhouse basketball schools that routinely made it into the postseason: Under the rules at the time, they divided most of the revenue based on the number of games they won.
Conference officials feared that without a change, a handful of schools would get rich while others got nothing, and the student athletes competing in the tournament would face increasing financial pressure to win games.
The new plan cut the amount of the payout that’s directly tied to teams’ wins and losses. Most of the tournament’s TV revenue is now earmarked for things like academic programs and financial assistance for student athletes. Even schools that don’t play in the postseason get a cut.