College Basketball Starting To Feel Financial Impact Of Shutdowns
Member institutions of the NCAA felt the first impacts of the shutdown of the college basketball season and March Madness on Thursday when it was announced that the Board of Governors voted to slash revenue distribution by 62.5% in the wake of the COVID-19 pandemic.
Sports Illustrated senior writer Pat Forde broke the story late Thursday shortly after the decision to slash the revenue distribution occurred.
“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,” said Ohio State president Michael Drake, chairman of the NCAA Board of Governors."
“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.
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.
As for the impact on the Southeastern Conference and Vanderbilt, both the conference and individual member institutions will be unphased by the loss, thanks in large part to the massive, and lucrative television packages the conference enjoys.
A quick crunching of the numbers would seem to indicate that the Commodores could expect to lose approximately $1.1 million dollars from the cancelations, which for you and I would be substantial, but will not make much difference to the bottom lines across the conference.
Where the lost revenue will be felt most are in the smaller schools whose budgets are oftentimes funded in large part by revenues received from the NCAA through the tournament.
“Our priority is to ensure that we are able to support student-athletes and continue to provide an opportunity as broadly as possible,” said Division I board chair Eli Capilouto, president at Kentucky.