I have a hard time believing that if one or several of the "bluebloods" miss the NCAA tournament, that ratings would suffer. Filling out a bracket and watching the tourney has become an American tradition, doesn't matter who's playing. Having an upstart like Butler go deep in the tourney increases interest, it doesn't reduce it.
You make an interesting point so I did a high-level (meaning non-granular) analysis of the NCAA's revenue using the 2017 financials.
https://www.ncaa.org/sites/default/files/2016-17NCAAFin_FinancialStatement_20180129.pdf
rev exp Net
TV $$..............$ 821,386,522.00.......$ 560,368,946.00..........$ 261,017,576.00.....31.78%
Tournament $ $ 129,404,400.00.... $ 167,195,662.00..........$ (37,791,262.00)...-29.20%
TV money, as you said, is set. Actually is set for multiple years so that doesn't change no matter who makes the tournament. The 'exp' above represents the payout to member institutions so they presumably "keep" the $261MM.
The tournament dollars presumably represents ticket sales+ (??). The 'exp' there includes costs for all division tournaments.
So, from a high-level (meaning there are clearly more details which I'm surely leaving out) financial standpoint, where can they maximize their dollars at the end of the day? Not the TV money because that's set. It's in the revenue earned through the tournament.
Having a bunch of mid-majors advancing multiple rounds does not help them because they don't carry the numbers fan-wise that the blue bloods do. Hence, the bias in favor of blue bloods and hence why they're averse to actually punishing them IMHO.
As I've said many times over the years, the more interesting analysis of their total revenue is in when it's all earned. The figure I've heard thrown around is that over 92% of their revenue is earned in MAR-APR.
