NCAA forced to cut budget
The financial belt-tightening in college athletics began Thursday with the NCAA announcing a sharp decline in the amount of money that will be distributed to member schools as a result of cancellation of winter and spring sports, most notably the men’s basketball tournament, due to coronavirus.
The NCAA Board of Governors voted unanimously to distribute $225 million to schools in June, a 60-percent revenue hit from the approximately $600 million that was originally budgeted.
The NCAA directed the money be used specifically on supporting college athletes.
“We are living in unprecedented times not only for higher education, but for the entire nation and around the globe as we face the COVID-19 public health crisis,” Michael V. Drake, chair of the board and president of Ohio State University, said in a statement. “As an association, we must acknowledge the uncertainties of our financial situation and continue to make thoughtful and prudent decisions on how we can assist conferences and campuses in supporting student-athletes now and into the future.”
The NCAA has a $270 million event cancellation insurance policy, and another $50 million will come from reserves.
In an unprecedented and landmark move, the NCAA canceled the NCAA men's and women's basketball tournaments a week before they were set to begin due to concerns over the COVID-19 outbreak.
“The (NCAA) has prepared for a financial catastrophic event like the one we face now,” Drake said. “While we certainly have challenges ahead, we would be in a far worse position had it not been for this long-standing, forward-focused planning.”
As part of the Division I distribution, $53.6 million will go to the Equal Conference Fund, which is split equally among Division I basketball playing conferences that meet athletic and academic standards to play in the men’s basketball tournament, the NCAA said.
Division II will receive $13.9 million, a $30 million decrease from last year, and Division III is projected to receive $10.7 million, a decrease of $22 million.
Schools that compete in the wealthiest conferences, with billion-dollar TV contracts fueled by major college football, might not notice much of a difference in the short term. Schools competing in mid-major conferences are preparing to make sacrifices.
“For us, a million dollars, that’s huge,” Atlantic Sun Commissioner Ted Gumbart said.
Some $53.6 million will be distributed to Division I schools through the Equal Conference Fund, which pays each conference about $1.6 million.
“That’s kind of the lifeblood,” Gumbart said. “That’s what we use to do business. So that is much more important for the A-Sun than it would be for the SEC or a Power Five conference.”
The NCAA pulled in more than $1 billion in revenue last year, including $867.5 million from the television and marketing rights for the Division I men’s basketball tournament. But March Madness was canceled March 19, a week before the first round was scheduled to begin.
The remainder of the $225 million will be proportionally distributed through seven other funds. That’s where the A-Sun and midmajor schools like it will take a hit.
“We were expecting about $5.8 million dollars and we’re going to get less than half of that,” Gumbart said. “It simply limits what we can provide to our schools. It’s going to be a tough recovery year.”
New Mexico State athletic director Mario Moccia said via email that it was too early to tell exactly what impact the smaller NCAA contribution might be but noted “a possible $500,000 reduction with our budget would be extremely significant.”