Basically, the almost-guaranteed-to-lose school benefits by having a big name show up at their arena, thus drawing thousands of extra fans to witness a brutal beating. The larger school benefits because the smaller school is paying them for this privilege. So, everybody wins! Well, except for the fact that, as always ...
The Student-Athlete Gets The Short End of The Stick
Student-athletes that compete at the tournament level are basically working a high-stress, strenuous full-time job. As noted in the 2013 documentary Schooled: The Price of College Sports, their situation is not that dissimilar to indentured servitude. They meet all the criteria to be considered employees of their schools, and while other students performing work for the school receive a paycheck, the athletes get none.
In addition, unlike the coaches with their built in golden parachutes, most student-athletes have no guarantees they can keep their scholarships beyond a single year. While the NCAA finally started allowing multiple-year scholarships back in 2011, schools are not required to award them and it's still not a popular practice. This means most student athletes can be booted for disappointing "participation expectations" on the playing field to make room for a better player. They also better not get injured or they might be out the cost of the medical expenses as well.