NCAA revenue falls by $600M
Canceling March Madness especially costly; association intends to bring it back
The coronavirus pandemic fueled a $600 million plunge in the NCAA’s revenues during its most recent fiscal year, a staggering indication of how the virus forced a financial reckoning throughout a college sports industry that was already under scrutiny from lawmakers and regulators across the country.
The decision in March to cancel the men’s national basketball tournament cost the association $702 million in television and marketing rights, NCAA board members were told during a video call this month. And although the NCAA recouped some $270 million through insurance and spent about $473 million less, the association still posted a loss of nearly $56 million during the fiscal year that ended in August, meeting minutes show.
The NCAA had planned to distribute $600 million to its Division I conferences last year but ultimately paid out less than half of that.
In an interview this month with the New York Times, Mark Emmert, the association’s president, referred to a range of financial backstops, including reserves and lines of credit, and budget cuts that had the NCAA operating with a staff roughly one-quarter smaller than it did a year ago.
Although NCAA officials are bracing for a continuing decrease in championship revenues, they are moving ahead with plans for the men’s basketball tournament, the group’s financial lifeblood.
Organizers have repeatedly and forcefully defended last year’s cancellation, which auditors said had cost the NCAA more than $800 million when ticket sales are included. There is also insurance in place for the 2021 tournament. But executives are aware missing another year of tournament revenues would substantially add to the association’s problems.
In a bid to make the tournament happen in some form, officials have scrapped the coast-to-coast games that spread the tournament across the country each March and announced that the entire competition would be held in Indiana in March and April. Players, coaches, officials and others crucial to the tournament will be required to test negative for the virus on seven consecutive days before arriving in Indianapolis, and masks will be mandatory for people unless they are eating, practicing or playing, or are alone in their hotel rooms.
The NCAA said last week that the tournament’s start would be delayed until March 18, two days later than initially planned.