Yahoo Finance Coronavirus: NCAA sees $375 million decrease in revenue after cancellation of championships
The impact of the coronavirus pandemic will be felt on college campuses across the country.
The NCAA announced Thursday that it will distribute $225 million to its Division I members in June, down from the projected $600 million budget it mapped out prior to the cancellation of all remaining winter and spring championships, including the men’s basketball tournament.
In its press release Thursday, the NCAA said the 2020 revenue — $50 million of which will come from NCAA reserves — will “specifically focus” on supporting college athletes “during the uncertainty of the current environment.”
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“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 Ohio State president Michael V. Drake, the chair of the NCAA’s Board of Governors. “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.”
A significant chunk of NCAA revenue comes from March Madness, namely its massive $8.8 billion television rights agreement with CBS and Turner. In its 2018-19 financial statements, the NCAA estimated that it would receive $827 million from television broadcast revenue and licensing rights for the men’s basketball tournament in 2020. The NCAA said its decision on revenue distribution will allow it to “work with its contractual partners.”
Drake said the NCAA, which has a $270 million event cancellation insurance policy, has prepared for a “financial catastrophic event” and will begin “a variety of cost-cutting budget measures” in the coming weeks.
“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,” Drake said.
Of the $225 million, $53.6 million will be split equally among Division I basketball playing conferences “that meet athletic and academic standards to play in the men’s basketball tournament.” The way the rest of the money will be distributed was not specified.
The effects of the coronavirus will also be heavily felt at lower levels of the NCAA. Division II will receive approximately $13.9 million in revenue, a drop-off of $30 million from last year. Things are worse at the Division III level, which will receive a projected $10.7 million. That’s $22 million less than last year.
Division II and Division III are set to receive 4.37 percent and 3.18 percent of NCAA revenue, respectively.
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