BLOOMINGTON, Ind. — The NCAA announced its revenue distribution plans for all Division I member schools, including Indiana University, and the revenues have been slashed considerable after the cancellation of the 2020 NCAA men’s basketball tournament.
The massive cut will hurt all universities hard, including Indiana.
“As is the case with so many other organizations in our community, across the country and around the world, the coronavirus pandemic is having and will continue to have a significant negative financial impact on our department and all of intercollegiate athletics,” said IU Vice President and Director of Intercollegiate Athletic Fred Glass in a statement released by the school.
“In addition to pursuing our number one priority of helping to protect the health and safety of our students, coaches, staff and fans, we have also been working to mitigate the financial impact of the anticipated reductions in the distributions we traditionally receive from the NCAA and the Big Ten.”
The release said that IU Athletics is working closely with the Office of the Vice President and Chief Financial Officer to mitigate problems with this new financial reality. In addition to the University-wide hiring, promotion and bonus freeze, Indiana University Athletics is pursuing a variety of cost-containment measures, including deferring any non-essential building and maintenance projects and purchases.
According to a USA Today report, the original total 2020 distribution was expected to be around $600 million total for all member schools, with the first checks to universities being cut in April. However, the revised payment announced on Thursday has been reduced to $225 million and will be given out entirely in June.
Indiana's distribution from the NCAA last year was about $4.7 million, according to reports.
$50 million will come from NCAA reserves and the association also carries a $270 million event cancellation insurance policy, which will be used to pay off a line of credit that will cover the remaining distribution within 12 months.
Michael Drake, chair of the NCAA Board of Governors and president of Ohio State University had the following comment on the decision.
“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. 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.”
Drake further added that the organization had been prepared for such a disrupting event.
“The Association has prepared for a financial catastrophic event like the one we face now. 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.”
According to Division I board chair Eli Capilouto, president at Kentucky, the decision was made with the best interests of the student-athletes in mind.
“Our priority is to ensure that we are able to support student-athletes and continue to provide opportunity as broadly as possible.”