Since the cancellation of March Madness and other NCAA winter and spring championships, due to the coronavirus, conferences and schools are bracing for what the economic impact could be.
The NCAA gave a painful first glimpse Thursday, announcing that its Board of Governors had voted unanimously to distribute $225 million in June, $375 million less than the $600 million it had originally budgeted for distribution in April.
For many athletic departments, the eventual disbursement will be a reality check on a murky financial future that likely won’t clear up anytime soon.
The NCAA Board of Governors stressed to members the importance of “planning carefully with less revenue.”
“We are living in unprecedented times, not only for higher education, but for the entire nation and the entire world, as we face the COVID-19 public health crisis“said Michael V. Drake, chairman of the board and president of Ohio State, in a statement. “As an association, we must recognize the uncertainties of our financial situation and continue to make thoughtful and prudent decisions about how we can help conferences and campuses support student-athletes, now and in the future.”
The NCAA gets most of its revenue from its March Madness television rights deal with CBS and Turner, which pays the association nearly $800 million a year.
Of the $225 million distributed, $50 million will come from NCAA reserves, the release said. The NCAA said it also has a $270 million event cancellation insurance policy that will be used to pay off a line of credit that will cover the remaining distribution within a year.
“The Association has prepared for a catastrophic financial event like the one we are currently facing,” Drake said. “While we certainly have challenges ahead, we would be in a much worse situation without this long-standing forward planning. »
The level of reliance on the NCAA’s annual distribution will vary by conference and school.
“Given the cancellation of the NCAA basketball tournament and other events related to the COVID-19 pandemic, today’s announcement by the NCAA regarding a reduction in distribution is not unexpected,” UCLA said in a statement. “It is too early to say how much money each campus will receive, so it would be premature to comment on the specific ramifications for UCLA.
“The financial impact of this pandemic is not unique to college athletics and is just one of many factors that will need to be considered as we collectively make decisions about how to move forward.
USC athletic director Mike Bohn, speaking Monday on the school’s “Trojans Live” show, said he expected a 70 percent cut in NCAA distribution. It ultimately rose to 62.5%.
“We’ve been fortunate to have a lot of our donors and fans say, ‘How can we help? What can we do to help these student-athletes?” Which is certainly comforting,” Bohn said. “I know the NCAA is working on insurance pieces, working on lines of credit, working on all kinds of solutions to help us manage (less revenue) at the campus level. Again, these are in play and still really undefined at this point. “
The NCAA said Division II is expected to receive $13.9 million, a $30 million decrease from last year. Division III is expected to receive $10.7 million, a decrease of $22 million from last year.
Times writers Ben Bolch and Ryan Kartje contributed to this report.
