How much money do colleges make off the NCAA tournament every year?

The NCAA Division I men’s basketball tournament makes a lot of money. In fact, it’s the thing the NCAA — a non-profit organization — points to as pretty much the only thing it does that actually makes money.

Recently, the organization released a financial audit that shows just how much it earns from the tournaments it puts on across all sports, with the lion’s share coming from the gargantuan rights deal with CBS/Turner sports for the men’s basketball tournament.

There are plenty of places all that money goes, but one of them is called the basketball fund, which is a pot of about 30 percent of the tournament TV money. The NCAA keeps some of that money for things like administrative salaries and funding other tournaments.

This system began in 1991, and the fund’s money gets distributed to conferences in what are called “units.” These unit share are allotted for every round in the tournament that a team plays in except for the championship round. The fund represents around 40 percent of the revenue distributed by the NCAA every year. The way teams earn those units for their conferences is not as straightforward as X team makes it to Y round of the tournament, and earns $Z.

The NCAA explains the basketball fund and the unit system like this.

The basketball fund provides for moneys to be distributed to Division I conferences based on their performance in the Division I men’s basketball championship over a six-year rolling period (for the period 2007-2012 for the 2012-13 distribution). Independent institutions receive a full unit share based on its tournament participation over the same rolling six-year period. The basketball fund payments are sent to conferences and independent institutions in mid April each year.

Here’s what the units looked like for the 2013 NCAA tournament, based on the six-year period prior.

For simplicity’s sake, we’ll use the first conference listed there (the America East). From 2007-2011, the America East got its automatic qualifier into the Big Dance, but that team lost in the opener. In 2012, they got to the Round of 32, picking up an extra unit.

A unit’s value rises 3 percent every year. In 2013, a unit was worth $245,500 a season. That number has risen to $264,859 by last year’s tournament. For a league like the ACC, which routinely sends multiple teams the tournament and usually at least one to the Elite Eight or Final Four, it’s easy to cash in. And the six-year rolling time frame can dull the sting of one year’s poor showing by a league.

With its 21 units in 2015, the ACC became the first conference to hit the $30 million mark for one tournament, pulling in a six-year payout cycle of nearly $33 million. Last year the ACC earned 25 units, besting the conference record set by the Big East in 2009 (24), which was the most since the NCAA started the basketball distribution fund in 1991.

Thanks to the fact that six of the ACC’s teams — Duke, Virginia, North Carolina, Syracuse, Notre Dame, and Miami — made the Sweet 16 last year, the six-year payout will equal at least $39.9 million.

Even if you aren’t making deep runs in the tournament, the units are valuable for leagues that aren’t upper echelon. The Washington Post found that smaller conferences can make anywhere from 25-50 percent of their total revenue from NCAA tournament units.

Per the NCAA, conferences are urged to distribute the money equally, but they aren’t required to do so. This is good for a team like Rutgers, which now owns the biggest tourney drought of Power 5 schools, having not made the Big Dance since 1991. Rutgers still earns the money from its Big Ten counterparts’ success in the tournament, but doesn’t directly contribute to it. In this way, the NCAA tournament is almost exactly like college football with even revenue distribution of postseason funds.

But some leagues do get creative with distribution of the funds and buck the NCAA’s urging.

“The standard of living, if you will, is really dependant on the men’s basketball tournament,” said Tom Yeager, commissioner of the Colonial Athletic Association. Yeager’s conference has its own complicated formula for the basketball fund: the conference keeps the money it is guaranteed every year thanks to its automatic bid, and any more money gets split in half, with one half getting split among the 10 schools, and the other half doled out competitively through an “excellence fund.”

This puts independent teams in a bind. Since they’re not in a conference, they can’t rely on other teams to prop them up with units in a down year. This was the case for Notre Dame before it joined a league in the 1990s. From 1991-1995, the Irish missed the tournament and it hurt them in unit payouts. But missing the tourney this year will hurt considerably less in the pocketbook because they’ve got a wad of cash coming from other ACC teams.

There are currently no teams that are independent in Division I basketball, and the unit revenue distribution model is a huge deterrent to leaving a league.

But if you’re a conference’s bell cow, then an even payout structure can feel unjust. Think of Gonzaga, which is now an NCAA tournament mainstay. That’s big money for the West Coast Conference. Gonzaga usually gets the auto-bid to the Big Dance, but the Bulldogs often advance in the tournament and earn extra units. From 1991-2015, Gonzaga earned its league 36 units. The rest of the league combined earned 40 in that same time span. The free ride the Zags earned WCC teams upset coach Mark Few.

“We need to talk long and hard about (NCAA tournament) money distribution that we’re making for the league,” Few said, “and if they’re not spending it on basketball, we don’t need to be sponsoring swimming at those schools or whatever they’ve got going. They’re not all in.”

Gonzaga earns the overwhelming majority of the units for the WCC, but still has to share some of that money with schools that aren’t close to earning any, like Pepperdine or Pacific. Moving to a league that could generate more units, like Wichita State did with the AAC and Davidson and George Mason did with the A-10, could represent a significant financial bump.

While it may be more lucrative for some leagues and teams over others, the NCAA tournament is a big money endeavor for everyone in college basketball’s ecosystem.