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NCAA Distributing 60 Percent Less Revenue To Division One Schools

NCAA Tournament

The depth of the economic impact of COVID-19 on college athletics is starting to become a little more clear.

Thursday, the NCAA announced that it would distribute $225 million to Division One members in June. That’s down by 62.5 percent from the budgeted number of $600 million.

The drop-off is due to the revenue lost when the winter and spring NCAA championships were canceled.

The highest-profile event was the men’s basketball tournament, but other sports such as wrestling, the men’s and women’s hockey tournaments, the women’s basketball tournament, and the College World Series were also called off.

The NCAA is dipping into its coffers to even be able to provide $225 million to Division One schools. The organization said that $50 million of that amount will come out of its reserve funds.

Ohio State president Michael Drake is the chair of the NCAA board. In a statement he called the current crisis, “unprecedented times not only for higher education, but for the entire nation and around the globe.”

You can read the full release from the NCAA below.

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In response to the cancellation of all remaining winter and spring NCAA championships, the Board of Governors voted unanimously to distribute $225 million in June to Division I members to specifically focus on supporting college athletes.

Division I revenue distribution for 2020 previously was budgeted at approximately $600 million, with the first distribution scheduled for April.

The NCAA receives most of its revenue from the Division I Men’s Basketball Championship television and marketing rights, as well as championship ticket sales. The revenue is used to provide distributions to member conferences and schools along with funding championships, national programs and other initiatives to support student-athletes.

In its decision, the Board of Governors stressed the importance of using the distributions to aid college athletes during the uncertainty of the current environment, along with the importance of planning carefully with less revenue. The decision also allows membership to engage in planning while the NCAA continues to work with its contractual partners.

“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,” said Michael V. Drake, chair of the board and president of The Ohio State University. “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.”

Of the $225 million distribution, $50 million will come from NCAA reserves. The NCAA also has a $270 million event cancellation insurance policy, and the proceeds when received will be used to pay off a line of credit that will cover the remaining distribution within 12 months.

To further assist with the reduction in revenue this year, Drake emphasized the NCAA is undertaking a variety of cost-cutting budget measures that will be determined in the upcoming weeks.

“The Association 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.”

The Division I Board of Directors determined how the distribution will be shared among members.

“Our priority is to ensure that we are able to support student-athletes and continue to provide opportunity as broadly as possible,” said Division I board chair Eli Capilouto, president at Kentucky.

For this year’s Division I distribution, $53.6 million will be distributed through 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 remainder will be proportionally distributed through the remainder of all other funds. The funds will be unrestricted to provide latitude to conferences.

Division II will receive 4.37% of actual revenues, currently projected to be $13.9 million for the division, which is a $30 million decrease from last year. Division III will receive 3.18% of actual revenues, currently projected to be $10.7 million for the division, which is a $22 million decrease from last year. These amounts will be used to fund national programs.

One Response

  1. yep… jest a tad ‘less’ when the need is far more…

    and ‘johnny on the spot’ with the quick ‘dis – triubtion’ as well.

    the ncaa… at its usual…setting their example.

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